On Feb. 14, 2024, the United States sanctioned a network that smuggled U.S. goods and technology from American companies to the Central Bank of Iran and other users in the Islamic Republic. The Central Bank of Iran had previously been sanctioned for providing financial support to the Qods Force, the external operations branch of the Revolutionary Guards, as well as Hezbollah, a Lebanese militia and political party.
Some of the illegally exported items were subject to national security and anti-terrorism controls by the U.S. Department of Commerce’s Bureau of Industry and Security. The Treasury Department named three Iranian men and four companies involved in the smuggling. “The United States will continue to use all available means to disrupt the Iranian regime’s illicit attempts to procure sensitive U.S. technology and critical inputs,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson. The following are statements from the Treasury and State Departments.
Treasury Department
Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a procurement network responsible for facilitating the illegal export of goods and technology from over two dozen U.S. companies to end-users in Iran, including the Central Bank of Iran (CBI), which is designated for its role in providing financial support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah. These designations target three individuals and four entities tied to the procurement of sophisticated U.S. technology for use by CBI in violation of U.S. export restrictions and sanctions. Among the goods and technology acquired by CBI were items classified as information security items subject to national security and anti-terrorism controls by the U.S. Department of Commerce’s Bureau of Industry and Security.
“The Central Bank of Iran has played a critical role in providing financial support to the IRGC-QF and Hizballah, two key actors intent on further destabilizing the Middle East,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States will continue to use all available means to disrupt the Iranian regime’s illicit attempts to procure sensitive U.S. technology and critical inputs.”
Today’s action is being taken pursuant to the counterterrorism authority Executive Order (E.O.) 13224, as amended. The CBI was designated pursuant to E.O. 13224, as amended, on September 20, 2019 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to, the IRGC-QF and Hizballah.
CENTRAL BANK OF IRAN TRANSSHIPMENT NETWORK
Iran-based Informatics Services Corporation (ISC), a subsidiary of CBI and publicly recognized as the technology arm of CBI, oversees Iran’s electronic banking clearance network, Shetab, and is affiliated with Shaparak, Iran’s electronic card payment network. ISC most recently developed the Central Bank Digital Currency platform for the Central Bank of Iran.
UAE-based Advance Banking Solution Trading DMCC (ABS), a front company for ISC, acquired proprietary U.S. goods and technology from over two dozen U.S. companies, both indirectly and through third-party resellers, for onward transfer to CBI. ABS falsely claimed that it was the ultimate end user of the products, concealing their intent to forward the items to Iran from U.S.-based vendors. ISC chief executive officer Seyed Abotaleb Najafi oversaw and approved the illicit acquisition of items acquired by ISC.
ISC also worked with Mohammad Reza Khademi (Khademi), president of UAE-based Freedom Star General Trading Co. (L.L.C.) (Freedom Star), to facilitate the shipment of goods in the UAE to ISC in Iran. Khademi, using Freedom Star, provided falsified End-User Certificates to facilitate these shipments, which stated the goods were going to countries other than Iran.
ISC also maintains an affiliate in Türkiye, Ted Teknoloji Gelistirme Hizmetleri Sanayi Ticaret Anonim Sirketi (Ted), which serves as ISC’s in-country representative and acquired U.S. goods and technology in coordination with ISC front companies. ISC employee Pouria Mirdamadi (Mirdamadi), a dual-national of France and Iran, is involved in Ted’s operations.
Informatics Services Corporation is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support, for, or goods or services to or in support of, the CBI.
Advance Banking Solution Trading DMCC is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, or having acted for or on behalf of, directly or indirectly, Informatics Services Corporation.
Seyed Abotaleb Najafi is being designated pursuant to E.O. 13224, as amended, for having acted for or on behalf of, directly or indirectly, Informatics Services Corporation.
Mohammad Reza Khademi and Freedom Star General Trading Co. (L.L.C.) are being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support, for, or goods or services to or in support of, Informatics Services Corporation.
Ted Teknoloji Gelistirme Hizmetleri Sanayi Ticaret Anonim Sirketi is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, directly or indirectly, Informatics Services Corporation.
Pouria Mirdamadi is being designated pursuant to E.O. 13224, as amended, for having acted for or on behalf of, directly or indirectly, Informatics Services Corporation.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.
In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.
State Department
The United States is today designating four entities and three individuals tied to a network facilitating the illegal export of U.S. goods and technology to end users in Iran, including the Central Bank of Iran. The Central Bank of Iran has played a critical role in providing financial and technological support to the Islamic Revolutionary Guard Corps-Qods Force and Hizballah, both foreign terrorist organizations and key drivers of the ongoing conflict in the Middle East.
Today’s action demonstrates that defying export restrictions and circumventing sanctions against Iran will result in consequences. The United States is steadfast in its commitment to countering terrorist financing and will continue to use all available means to disrupt the illegal procurement of sensitive technology by the Iranian regime.