Washington: Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) has taken significant action to disrupt a financial network supporting Iran’s military activities. The designations include two Iranian financial facilitators and more than a dozen individuals and entities based in Hong Kong and the United Arab Emirates (UAE). These entities have been implicated in coordinating fund transfers, particularly from the sale of Iranian oil, benefiting the IRGC-Qods Force (QF) and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL).
According to U.S. Department of the Treasury, Iranian shadow banking networks exploit the international financial system to launder money through overseas front companies and cryptocurrency, thereby evading sanctions. The IRGC-QF and MODAFL utilize these proceeds to back regional terrorist proxy groups and develop advanced weapons systems, posing threats to U.S. forces and allied security. Under Secretary of the Treasury for Terrorism and Financial Intelligence, John K. Hurley, emphasized the U.S. commitment to disrupting these financial channels, highlighting President Trump’s leadership in applying maximum pressure on Iran.
Today’s actions, pursuant to Executive Order (E.O.) 13224, mark the second round of sanctions targeting Iran’s shadow banking infrastructure following the President’s National Security Presidential Memorandum 2. The IRGC-QF, designated under E.O. 13224 since 2007, and its parent organization, the Islamic Revolutionary Guard Corps (IRGC), designated since 2017, are central to these sanctions. MODAFL, designated in 2019, provides substantial support to the IRGC-QF. Previous actions against similar networks were taken in July and June 2025, targeting entities like the Zarginhalam brothers for laundering billions through exchange houses and front companies.
Notable individuals designated include Alireza Derakhshan and Arash Estaki Alivand for their support to the IRGC-QF. Derakhshan, in particular, manages multiple UAE- and Hong Kong-based front companies, facilitating illicit fund flows for MODAFL and the IRGC. Entities like Alpa Trading – FZCO and Powell International FZE are implicated in these activities, handling significant transactions on behalf of sanctioned Iranian actors.
In terms of sanctions implications, all property and interests in the U.S. linked to these designated persons are blocked. Violations of these sanctions can lead to severe civil or criminal penalties. OFAC’s guidelines emphasize the risks to financial institutions and other entities engaging with blocked persons. Secondary sanctions may also apply to foreign financial institutions facilitating transactions for those designated.
OFAC’s sanctions derive strength from its enforcement abilities and the potential for removal from the Specially Designated Nationals and Blocked Persons List, aiming ultimately to encourage positive behavioral changes rather than punishment. For removal guidance, stakeholders can refer to OFAC’s procedures for petitioning removal from its list.