China is secretly funneling billions of dollars to Iran through a covert payment system that bypasses US sanctions by swapping oil for infrastructure projects, The Wall Street Journal reported, saying the hidden conduit enabled Tehran to receive up to $8.4 billion last year.
Citing Western officials, the report said the mechanism -- linking state-owned firms, a government insurer, and an unregistered financial intermediary -- has provided a critical lifeline to Iran’s sanctions-hit economy, with state insurer Sinosure and a little-known financial vehicle called “Chuxin” channeling the money to Chinese contractors working in Iran.
Under the system, an Iranian-linked seller books crude sales to a Chinese buyer tied to state trader Zhuhai Zhenrong; the buyer then deposits funds with Chuxin, which pays Chinese firms working on insured projects inside Iran, according to the report.
The crude typically reaches China via ship-to-ship transfers that obscure origin, the officials said.
Beijing’s Foreign Ministry told the WSJ it was “unaware of the arrangement” and “opposes illegal unilateral sanctions.”
Sinosure and Zhuhai Zhenrong did not comment, the paper said, adding neither Sinosure nor Chuxin is under US sanctions.
“Iranian entities rely on shadow banking networks to evade sanctions and move millions,” said John K. Hurley, the US Treasury undersecretary for terrorism and financial intelligence, in a separate statement last month.
Brad Parks of AidData said Sinosure-backed deals typically require that “every creditor and every construction contractor has to come under this umbrella,” likening the Iran setup to documented structures in Iraq.
The conduit has helped sustain Iran’s sanctions-hit economy with US officials estimatingroughly 90% of Iran’s oil exports go to China.
Washington has warned Beijing over such purchases and has tightened measures on the “shadow fleet” moving Iranian crude, the Journal reported.
Hossein Pourfarzaneh, the organization’s chief, said during a ceremony in Tehran that the newly inducted aircraft-- along with one helicopter and five small passenger planes -- would add more than 2,500 seats to the country’s aviation network.
“These projects are aimed at improving service quality and expanding air connectivity across the country, including to the islands and remote provinces,” Pourfarzaneh was quoted as saying by the Tasnim news agency.
He said 13 transportation projects worth about $125 million had been launched to strengthen Iran’s air infrastructure.
According to Pourfarzaneh, Iran has added over 5,100 passenger seats since 2021.
Iran has struggled for decades to modernize its aging fleet due to international sanctions restricting aircraft sales and access to spare parts.
More than half of its estimated 330 commercial planes are grounded, forcing Tehran to rely on leased or secondhand aircraft.
Earlier this year, Iran took delivery of several used Airbus A330s from China under barter deals involving oil, according to domestic media reports.
Late in September, an Iranian lawmaker said Russian MiG-29 fighter jets have arrived in Iran and officials also discussed acquiring additional Russian-built jets, including Sukhoi Su-35s, as part of broader defense and transport cooperation with Moscow.
The remarks came during a meeting with foreign ambassadors in Tehran, where he said the session was held to brief diplomats on developments in New York and the reactivation of UN sanctions.
“Iran had sought a fair and balanced solution, but Western states responded negatively out of greed,” Araghchi said.
“Years of pressure had proven that there is no solution to Iran’s nuclear issue other than diplomacy...The snapback of sanctions, like military attacks, cannot work.”
All UN sanctions suspended under the 2015 deal with Iran snapped back into force on September 27, one month after European powers triggered the snapback mechanism.
The three European countries had weakened their own diplomatic role by resorting to pressure, he said
The Cairo agreement with the IAEA was no longer viable after the snapback, and Iran would redefine its framework for engagement under new conditions, according to the Iranian foreign minister.
Iran had demonstrated goodwill in its dealings with both Western powers and the IAEA, Araghchi said, adding that Tehran had “taken every step it could to reach a negotiated solution.”
“We showed goodwill through our cooperation with the Agency and our fair proposals. The West has no excuse to say Iran avoided talks, nor any justification for triggering the snapback mechanism… Iran’s position is now fully vindicated.”
The United Nations sanctions include restrictions on Iran’s nuclear and military activities, asset freezes on designated entities, and a duty to “exercise vigilance” when doing business with Iran.
France, Germany and the United Kingdom said in a joint statement the reimposition of sanctions was unavoidable after Iran’s breaches of the 2015 nuclear deal, citing enriched uranium stockpiles 48 times above agreed limits.
However, the foreign minister said Iran had proved it seeks only to secure its legitimate rights while remaining open to any fair diplomatic path.
“The last time there was an attack, more than 120 countries condemned it because Iran acted wisely,” Araghchi said. “Once again, Iran has shown it is a smart player that will not surrender its rights.”
Lawmakers passed the measure with 144 votes in favor, 108 against, and three abstentions out of 262 present. The reform amends the Monetary and Banking Law to redefine the rial as equal to 10,000 current rials and introduces a new subunit, the qiran or gheran, worth one hundredth of a rial.
Under the legislation, both old and new rials will circulate for up to three years during a transition period. The Central Bank of Iran (CBI) must establish operational procedures within two years of enactment and publicly announce the start of the change through official media.
According to the new law, after the transition period, all financial obligations denominated in the current rial will be settled using the new unit.
The CBI will also be responsible for managing the withdrawal of old banknotes and coins and for setting foreign exchange rates under the country’s current exchange regime.
The plan -- first proposed by the government in 2019 and discussed across three administrations and parliamentary terms -- has undergone multiple revisions. The latest version retains the rial as Iran’s official currency, dropping earlier proposals to rename it the toman.
Shamseddin Hosseini, head of parliament’s Economic Committee, said the measure’s main purpose was to “make banknotes more functional and facilitate financial transactions.”
He added that the abundance of zeros in the national currency had caused accounting and operational difficulties, adding that similar redenominations had been undertaken by countries such as Turkey in 2003 and 2005.
Hosseini acknowledged that cutting zeros would not directly reduce inflation or address Iran’s underlying economic challenges, but called it “an unavoidable adjustment” given years of high inflation and declining purchasing power.
Iran’s central bank governor Mohammad Reza Farzin said in May that the redenomination would take place this year as part of wider banking reforms.
The change, he added, would align official usage with common practice among Iranians, who already express prices in tomans -- equivalent to 10,000 rials.
The reform comes amid persistent inflation of about40%, a more than 90% loss in the rial’s value since US sanctions were reimposed in 2018, and widespread economic hardship.
Economists say that while the move could have short-term psychological benefits, it is unlikely to solve Iran’s deeper structural issues, including fiscal imbalances, monetary instability, and limited central bank independence.
“This policy is largely cosmetic,” economist Ahmad Alavi told Iran International in August. “Without tackling the roots of inflation -- from liquidity growth to systemic inefficiencies -- removing zeros will not restore the rial’s value.”
Iran has debated currency reform for decades, with earlier efforts raised under the administrations of Hashemi Rafsanjani, Mahmoud Ahmadinejad, and Hassan Rouhani. The current legislation, delayed several times by the Guardian Council, now returns to the body for final review before becoming law.