The Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned nearly 50 entities connected with so-called “shadow banking” networks that help Iran’s military evade U.S. sanctions and to sell the country’s oil and petrochemical products.

The entities sanctioned by OFAC include the Sadaf Exchange in Iran and Golden Stars currency exchange company in Türkiye, both owned by Seyyed Mohammad Mosanna’i Najibi, an Iranian-Turkish money-changer also placed on the sanctions list, OFAC said Tuesday in a press release.

Najibi’s companies used 27 “cover companies” based in Hong Kong, the United Arab Emirates, and the Marshall Islands to conduct shadow banking activity on behalf of Iran’s military, OFAC said. OFAC has sanctioned all of the companies as well.

OFAC also sanctioned two Iranian-based currency exchanges, Omid Sepah Exchange Company and Hekmat Iranian Exchange & Foreign Currency Services Company, both of which are controlled by Bank Sepah, an Iranian bank already under U.S. sanctions, OFAC said.

Other Iranian-based entities sanctioned by OFAC include Iranian money-changer Asadollah Seifi, who controls a number of entities used to conduct transactions on behalf of the Iranian military; Iranian currency exchanger Ramin Jalalian; Siavash Nourian, owner of Iranian exchange house Siavash Nourian & Co. Exchange; and Seyyed Reza Mir Mohammad Ali, CEO and owner of Iran-based Atropars Company.

Companies should examine their direct business connections, as well as their third-party transactions, for any nexus to the newly sanctioned entities.

Financial institutions should ensure that they are not engaging in transactions with sanctioned entities, otherwise they could expose themselves to OFAC sanctions enforcement actions. Financial institutions should add these sanctioned entities to their sanctioned watch lists, and when necessary, report to OFAC and to the Treasury’s Financial Crimes Enforcement Network (FinCEN) of any attempts to access their platforms by sanctioned entities.

In May, FinCEN warned financial institutions about potential attempts by Iran-based terrorist groups to access the world financial system.

In April, OFAC fined Thai-based SCG Chemicals Co. more than $20 million for “egregious” violations of U.S. sanctions against Iran for using U.S.-based correspondent banks to process the sale of $291 million worth of petrochemicals manufactured in Iran.

Aaron Nicodemus covers regulatory policy and compliance trends for Compliance Week. He previously worked as a reporter for Bloomberg Law and as business editor at the Telegram & Gazette in Worcester, Mass.View full Profile

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