In recent weeks the U.S. government has taken two notable steps to further sanction and pressure the Islamic Republic of Iran. On March 26, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against 25 individuals and entities by placing them on the Specially Designated Nationals (SDN) List. This list includes a network of front companies based in Iran, the United Arab Emirates and Turkey that OFAC stated has transferred over a billion dollars and euros to the Islamic Revolutionary Guard Corps (IRGC) and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). As a result of this action, all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons are now blocked and must be reported to OFAC. In addition, U.S. persons are now prohibited from engaging in activities that involve any property or interests in property of these blocked or designated persons. Persons that engage in certain transactions with these individuals and entities may themselves be exposed to sanctions or subject to an OFAC enforcement action. Unless an exception applies, any foreign financial institution that knowingly facilitates a significant transaction for any of these individuals or entities could be subject to secondary U.S. sanctions.

Treasury Secretary Steven Mnuchin stated, “We are targeting a vast network of front companies and individuals … to disrupt a scheme the Iranian regime has used to illicitly move more than a billion dollars in funds …. The IRGC, MODAFL, and other malign actors in Iran continue to exploit the international financial system to evade sanctions, while the regime funds terrorism and other destabilizing activities across the region.” In particular, OFAC stated that Ansar Bank used its Iran-based foreign currency arm, Ansar Exchange, and its network, to convert Iranian rials ultimately to hundreds of millions of dollars and euros. To provide this funding to Ansar Bank, MODAFL and the IRGC, Ansar Exchange relied upon a network of front companies and agents in Turkey and the UAE. OFAC provided a detailed chart describing Ansar Bank’s sanctions evasion scheme.

On April 8, 2019, the White House and Department of State announced that as of April 15, the United States will designate as a Foreign Terrorist Organization (FTO) the Islamic Revolutionary Guard Corps (IRGC) in its entirety, including the Qods Force. The FTO list includes 67 other terrorist organizations including Hizballah, Hamas, Palestinian Islamic Jihad, Kata’ib Hizballah and al-Ashtar Brigades. This designation is the first time that the United States has designated a part of another government as an FTO. According to a State Department spokesperson, the IRGC “has been directly involved in terrorist plotting; its support for terrorism is foundational and institutional, and it has killed U.S. citizens. It is also responsible for taking hostages and wrongfully detaining numerous U.S. persons, several of whom remain in captivity in Iran today.” This designation builds upon previous sanctions, including the sanctioning of more than 900 Iran-related individuals, entities, aircraft and vessels by the Trump administration for human right abuses, censorship, ballistic missile program, malign cyber activities, support to terrorism or associations with the Iranian government.

Both of these actions are intended, per the White House statement, “to increase financial pressure and raise the costs on the Iranian regime for its support of terrorist activity until it abandons its malign and outlaw behavior.”