Taking Actions Against Iran's Shadow Banking Network

The United States has sanctioned over 35 individuals and entities with ties to a network involved in money laundering on behalf of the Iranian regime.

This network has laundered billions of dollars through Iranian exchange houses and foreign front companies to sustain Tehran’s campaigns of terror that undermine international peace and security and line the pockets of regime elites. As part of this network, the Zarringhalam brothers and their associates use numerous United Arab Emirate- and Hong Kong-based front companies to help designated Iranian persons generate revenue from the sale of petroleum and other commodities subject to U.S. sanctions.

The system operates as a parallel banking system in which settlements are brokered through Iran-based exchange houses that use front companies outside of Iran to make or receive payments on behalf of sanctioned persons in Iran. To justify payments for sanctioned goods, shadow banking brokers may generate fictitious invoices. Front companies are created in jurisdictions with lower levels of regulatory supervision so that they can avoid scrutiny of their business practices. The shadow banking system negatively impacts the Iranian people as well; Iranian whistleblowers have highlighted instances of Iranian government agents embezzling billions of dollars and other acts of corruption through this banking network.

At the same time, the Treasury Department’s Financial Crimes Enforcement Network updated an Advisory to help U.S. and international financial institutions identify and report suspicious activities related to Iranian illicit financial activities. This includes red flags associated with Iranian oil smuggling, shadow banking, and procurement of weapons and dual-use components.

“The United States will continue to deny Iran access to financial networks and the global banking system as long as Iran continues its destabilizing activities,” said State Department spokesperson Tammy Bruce in a statement. “We will promote accountability for those who seek to undermine international peace and security.”

“Iran’s shadow banking system is a critical lifeline for the regime through which it accesses the proceeds from its oil sales, moves money, and funds its destabilizing activities,” said Secretary of the Treasury Scott Bessent. “Treasury will continue to leverage all available tools to target the critical nodes in this network and disrupt its operations, which enrich the regime’s elite and encourage corruption at the expense of the people of Iran.”