The sign of the Central Bank of the Islamic Republic of Iran is seen in Tehran, Iran January 25, 2023.

US Announces Sanctions Over Smuggling Tech To Iran’s Central Bank

Thursday, 02/15/2024

The United States has announced a new package of sanctions over a technology procurement network linked to the Central Bank of Iran, which has been finding ways to evade the measures.

The US Treasury said on Wednesday it had imposed sanctions on a subsidiary of the Central Bank of Iran (CBI), along with two entities based in the United Arab Emirates, one in Turkey and on three individuals for smuggling sophisticated US technology from over two dozen American companies to end-users in Iran, including the CBI.

In a statement, the Treasury noted the CBI is itself already under sanction for providing financial support to Iran's Revolutionary Guards’ Quds Force (IRGC-QF), an elite arm which carries out overseas operations, and on Hezbollah, a powerful Iranian-backed armed and political force in Lebanon.

“The Central Bank of Iran has played a critical role in providing financial support to the IRGC-QF and Hezbollah, two key actors intent on further destabilizing the Middle East,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. 

A statue of former Sen. Albert Gallatin stands at the Treasury Department in Washington, US, April 25, 2021.

The Treasury named the entities as Iran-based Informatics Services Corporation (ISC), a subsidiary of CBI; UAE-based Advance Banking Solution Trading DMCC (ABS), an ISC front company; UAE-based Freedom Star General Trading Co (L.L.C.); and Turkey-based Ted Teknoloji Gelistirme Hizmetleri Sanayi Ticaret Anonim Sirketi (Ted). 

It identified the three individuals as ISC Chief Executive Seyed Abotaleb Najafi; Freedom Star President Mohammad Reza Khademi; and ISC employee Pouria Mirdamadi, a dual French and Iranian national involved in Ted's operations.

The sanctions represent Washington's latest efforts to punish Tehran, whose proxies in Iraq, Lebanon, Syria, Yemen and the Gaza Strip have attacked US and Israeli targets since the Gaza war broke out on October 7. According to the Treasury, all property of those sanctioned that is in the United States or falls under the control of US persons is blocked. In general US regulations bar US persons from transactions involving property of those sanctioned.

The punitive measures enacted by the US appear toothless, as the Islamic Republic often asserts, primarily due to the absence of assets held by Iranian individuals and companies within US jurisdiction, making confiscation impractical. 

Moreover, recent disclosures by a hacktivist group further illustrate Iran's extensive arsenal of strategies aimed at shielding designated entities and individuals, facilitating their trade activities, and obscuring their identities and connections from international regulatory scrutiny. 

Additionally, the regime has honed its ability to navigate sanctions over years of grappling with their adverse effects, demonstrating a resilience born of experience in coping with pressure and mitigating associated damages.

In addition to exploiting loopholes and establishing procurement networks to acquire sanctioned technology and equipment, Iran has witnessed a notable surge in oil exports in recent years. From a low point of less than 500,000 barrels per day following the US re-imposition of sanctions in 2019, exports have soared to over 1,500,000 barrels per day. Regime officials attribute this rise to measures aimed at circumventing punitive measures, resulting in an influx of revenue to the regime's proxies across the region.

The rise in oil exports has drawn the attention of US lawmakers, who have repeatedly emphasized to the Biden administration the implications of increased financial support for Iran-backed groups. Earlier this month, a bipartisan group of Senators urged President Joe Biden to tighten enforcement of Iran's oil sanctions in light of the country's exports reaching a five-year high.

"In the wake of the October 7 terror attacks and subsequent assaults by Iran-backed proxies on US forces in the Middle East, we urge you to intensify efforts to halt Iran's channeling of lucrative oil exports to fund terrorism," said 18 Senators in a letter to Biden.

This sentiment echoes a similar call made by over 60 representatives from both sides of the aisle in the House, who advocated for "immediate action" to prevent the Iranian regime from obtaining additional financial resources to sustain its support for terrorism.

 

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