The Department of the Treasury has set its sights on a shadow banking group’s billions of dollars.
The Treasury’s Office of Foreign Assets Control (OFAC) has been hunting over fifty entities linked to shadow banking to fund and exacerbate terrorist actions.
Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC) are central to the web of hidden banking. The Treasury accuses both entities of using shadow banking to gain access to the international market and financial system to wash billions of dollars.
What is shadow banking?
Shadow banking is a complex and multi-jurisdictional system involving illicit finance systems used to hide the transactions of illicit goods or have ties to terrorist or extremist groups.
In the case of the fifty entities listed by the OFAC, they will all now be the subject of enforcement action. The OFAC has been stern on the outcome of any affiliated entities of terrorist groups and the billions they help wash through hidden transactions.
The Financial Crime Enforcement Network (FinCEN) issued a similar reprieve to multiple trading entities to fund terrorism. The billions they produced came from similar sources, such as billions of dollars worth of petrochemical sales proceeds for the Iranian regime.
Shadow banking a target for U.S. Treasury
According to the Treasury report, both the MODAFL and the IRGC are linked to the sale of Iranian oil and petrochemicals, which are then moved through a cabal of intermediaries. The money gained from this activity then funds the purchase of arms and vehicles, the supply of Yemen’s Houthis, and the transfer of UAVs to Russia for use in the war against Ukraine.
Deputy Secretary of the Treasury Wally Adeyemo said of the crackdown, “We have sanctioned hundreds of targets involved in Iran’s illicit oil and petrochemical-related activity since President Biden took office, and we will continue to pursue those who seek to finance Iran’s destabilizing terrorist activities. We continue to work with allies and partners, as well as the global financial industry, to increase vigilance against the movement of funds supporting terrorism.”
Image: Pixlr.
