Islamic Republic’s Shadow Banking, UAV Networks Sanctioned By US
The United States has sanctioned a network of companies over helping Iran evade sanctions as well as the regime’s international UAV procurement network.
The United States has sanctioned a network of companies over helping Iran evade sanctions as well as the regime’s international UAV procurement network.
US Department of the Treasury’s Office of Foreign Assets Control (OFAC) Thursday announced sanctions on 39 entities, including many based in the United Arab Emirates and Hong Kong, for helping Iran evading sanctions as well as designating a network of five companies and one individual for supporting Iran’s unmanned aerial vehicle (UAV) procurement efforts.
The Biden administration has accelerated its sanctions campaign against Iranian individuals and entities since September for three reasons. First, nuclear talks lasting 18 months reached a deadlock last September, exactly when popular protests erupted in Iran and were met with deadly force by the government. In addition to these factors, Russia began using killer drones provided by Iran, which alarmed the United States and its European allies.
Describing Thursday’s sanctioned entities as a "shadow banking" network that moves billions of dollars, Washington said the companies facilitate the Islamic Republic’s access to the global financial system. It added that those targeted had granted companies previously slapped with Iran-related sanctions, such as Persian Gulf Petrochemical Industry Commercial Co (PGPICC) -- which was sanctioned for aiding Revolutionary Guard’s Khatam al Anbiya construction base in 2019 -- and Triliance Petrochemical Co Ltd, access to the international financial system and helped them hide their trade with foreign customers.
In 2022 alone, PGPICC marketed millions of dollars of high-density polyethylene (HDPE) produced by Mehr Petrochemical Company (Mehr) to third-party buyers for delivery to Turkey and Asia. UAE-based Bavi General Trading CO L.L.C (Bavi General) and Iran-based Kambiz Nabizadeh and Partners Exchange (Nabizadeh Exchange) play a key intermediary role in these transactions. Late last year, a $170 million apparent embezzlement case left Mehr Petrochemicals, which produces the highest-grade polyethylene in the Middle East, in serious trouble.
"Iran cultivates complex sanctions evasion networks where foreign buyers, exchange houses, and dozens of front companies cooperatively help sanctioned Iranian companies to continue to trade," said Deputy Treasury Secretary Wally Adeyemo, adding that the new measures showed the US "ability to disrupt Iran's foreign financial networks, which it uses to launder funds."
Among those designated on Thursday were two Turkey-based entities, as well as Iran-based Mehr Petrochemical Company. Brian O'Toole, a former Treasury Department official, said Thursday's action would put a dent in Iran's ability to keep moving oil and get paid for it. "This is a pretty big deal, because this kind of thing should have an impact on what Iran is able to sell," he said.
The Treasury Department's top sanctions official, Brian Nelson, traveled to the UAE earlier this year, where he planned to warn officials about "poor sanctions compliance", a department spokesperson said at the time.
Also on Thursday, OFAC designated entities for supporting Iran’s UAV procurement efforts. This People’s Republic of China-based network is responsible for the sale and shipment of thousands of aerospace components, including components that can be used for UAV applications, to the Iran Aircraft Manufacturing Industrial Company (HESA), it said. HESA – designated on September 17, 2008, by the US for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and for having provided support to the IRGC -- has been involved in the production of the Shahed-136 UAV model that the Islamic Republic has used to attack oil tankers and has exported to Russia.
“Iran is directly implicated in the Ukrainian civilian casualties that result from Russia’s use of Iranian UAVs in Ukraine,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States will continue to target global Iranian procurement networks that supply Russia with deadly UAVs for use in its illegal war in Ukraine.”
In an interview on Wednesday, the Israeli leader said that he returned to the government primarily to make sure that Iran cannot become a nuclear “threshold power.”
The issue of Iranian regime’s nuclear program is “the quintessential heart of my foreign policy,” he said, adding, “I came back into government precisely to prevent Iran from becoming a nuclear state,” vowing to do “everything possible to prevent it."
Netanyahu indirectly referred to recent confirmation by the International Atomic Energy Agency (IAEA) that it found uranium particles enriched to 84-percent purity, which is very close to the 90-percent enriched fissile material needed for nuclear bombs. He said that Israel will not tolerate a “nuclear threshold” Iran.
This can be seen as a threat to Tehran not to enrich uranium to 90 percent, which can put the country on the threshold of manufacturing a bomb.
He also emphasized that the Islamic Republic wants nuclear weapons “to buy immunity” both in its mischiefs against the world and also as protection from the Iranian people who reject its legitimacy.
However, the Israeli premier expressed optimism that the West has become more cognizant of the dangers the Iranian regime poses to the world, not just to its own people and Israel. He attributed this “miraculous achievement” to the “courage of the Iranian people” who through their recent protests showed “the true nature” of the regime to the world.
“There is a moral imperative and a security imperative,” to stand up to the regime and take action, including “crippling” sanctions on the Revolutionary Guard (IRGC) and a “credible” military option to send a clear message to Tehran.
In recent months, the Biden administration has also warned that it will not tolerate a nuclear Iran and has boosted military coordination with Israel.
Regarding possible European sanctions on IRGC, Netanyahu said the “terrorist organization” has self-designated itself and “you don’t need special intelligence” to know that they are a terror group.
Netanyahu’s 25-minute interview was broadcast by Iran International TV into Iran Thursday evening local time with Persian dubbing. Netanyahu was asked if he has a message for Iranians and he said, “We stand with you, I stand with you, most of the world stands with you…don’t lose heart, be strong.”
He also praised Iran’s civilization and the talents and abilities of its people to achieve successes once the Islamic regime is gone. He voiced certainty that Israel and a free Iran can have solid relations.
He repeated a few times that the Islamic regime is “the common enemy” of the Iranian people, Israel and the world, arguing that the protesters “have unmasked” the regime, which is terrified.
“For such a regime to have nuclear weapons when it is committed openly to the destruction of not merely my own country but to the subjugation of the world…and chants death to Israel, death to America and everyone else in between,” is a dangerous proposition, Netanyahu said.
Addressing Western leaders he said, “History will change if Iran gets nuclear weapons.” If Iran is not stopped the world “will face a war and potentially a horrible nuclear war.”
He was asked if he could be effective in implementing his policies toward Iran’s nuclear program when he faces political challenges at home. “I never lose focus on the danger from the Islamic regime – never,” Netanyahu, whose policies and coalition government face strong popular opposition, replied.
Asked if we are close to a military conflict, the Israeli prime minister said, “It depends on Iran.” But he took issue with a recent remark by the IAEA Director General Rafael Grossi who during his recent trip to Tehran had said that any attack on any nuclear facility violates international law.
“I think he said something totally wrong and inappropriate…There is nothing more legitimate than preventing a regime that openly calls for your destruction from having the weapons to achieve that goal.”
Amid a deep economic crisis, commentaries about the impact of foreign policy, meaning isolation and sanctions, on the country’s well-being have become more frequent.
Mohammad Hossein Adeli told Ham-Mihan Daily that by using these networks, Iran circumvents US sanctions. "As long as we are doing this, our situation is not normal. This is a costly way that entails high inflation for Iran."
Adeli who was the governor of Iran's Central Bank under President Akbar Hashemi Rafsanjani and the country's ambassador to several key countries under the reformist government of President Mohammad Khatami, said Iran is a country that cannot remain isolated.
He maintained that although some “revolutionaries” advocate isolation as a way of growth, they need to know that even China owes its growth to foreign investment and a $760 billion per annum trade with the United States. Adeli added that "isolation will drag Iran into collapse and instability and its economic development depends on national power and stable and intelligent interaction with the world. That is how China, India, Indonesia, Brazil, South Africa and Vietnam have successfully survived and their economies grew."
Adeli further stressed that economic sanctions cause a bigger loss for Iran than any war. He added that Iran is under the pressure of a series of deep and complicated sanctions. The added cost of domestic and international trade under sanctions disrupts Iran's economy and increases the cost of everything.
"People are in trouble for their everyday livelihood and the country cannot develop. When there is no prospect for future, people lose their hope. As a result, law breaking becomes a norm and social relations are disrupted. That, eventually causes revolt in the country," Adeli said.
Meanwhile, a commentary in the moderate news website Faraz daily maintained that IAEA Director General Rafael Grossi's visit to Tehran quickly helped Iran’s currency to rise after the media quoted a few lines from his statement about agreement over cooperation. The commentary asked whether this would bring the government in Tehran to its senses and encourage it to recognize the link between foreign policy and people's livelihood.
According to Faraz Daily, this development clearly highlighted the importance of foreign policy on the country's economy, while Iranian officials have been insisting that their isolationist foreign policy has no impact on the people's livelihood.
At the same time, the commentary observed, that not interacting with the world during several years of economic sanctions has led to a crisis for Iran's people and government.
There are indications that at least some politicians in Iran who are usually trusted by Supreme Leader Ali Khamenei are encouraging the government, and in fact Khamenei, who single-handedly makes all decisions on all matters including the economy and foreign policy, to be more flexible in their interactions with the West and particularly the United States.
Iran's former nuclear chief Ali Akbar Salehi said on Tuesday that Iran should show flexibility in its negotiations with the West in order to end its international isolation.
Salehi said during a speech at the Iranian Foreign Ministry, "Resistance should come along with prudence. When we face serious obstacles, we need to show intelligent flexibility in order to end our isolation." This, Salehi said, is a wise reaction. He also warned Iranian diplomats, "not to create political or diplomatic deadlocks."