The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated 20 Iran- and Iraq-based front companies, senior officials, and business associates for providing support to, or acting on behalf of, the Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF) and for transferring lethal aid to Iranian-backed terrorist militias in Iraq such as Kata’ib Hizballah (KH) and Asa’ib Ahl al-Haq (AAH). According to Treasury Secretary Steven Mnuchin, “Iran employs a web of front companies to fund terrorist groups across the region, siphoning resources away from the Iranian people and prioritizing terrorist proxies over the basic needs of its people.” OFAC has sanctioned these entities and persons for a multitude of “malign activities”, including: smuggling; money laundering; selling Iranian oil to the Syrian regime; promoting propaganda efforts in Iraq on behalf of the IRGC-QF; intimidating Iraqi politicians; and illicit use of funds and public donations.
Accordingly, 15 individuals and 5 companies have been placed on OFAC’s Specially Designated Nationals (SDN) List. The five companies are:
- Reconstruction Organization of the Holy Shrines in Iraq (ROHSI) – an IRGC-QF-controlled organization based in Iran and Iraq. OFAC states that ROHSI, although ostensibly a religious institution, has transferred millions of dollars to the Iraq-based Bahjat al Kawthar Company for Construction and Trading Ltd.
- Bahjat al Kawthar Company for Construction and Trading Ltd. – also known as Kosar Company, and another Iraq-based entity under the IRGC-QF’s control. OFAC states that the Kosar Company has served as a base for Iranian intelligence activities in Iraq, including the shipment of weapons and ammunition to Iranian-backed terrorist militia groups. Additionally, Kosar Company has received millions of dollars in transfers from the Central Bank of Iran.
- Al Khamael Maritime Services (AKMS) – an Iraq-based company operating out of Umm Qasr port in which the IRGC-QF has a financial interest. OFAC states, inter alia, that AKMS was involved in the sale of Iranian-origin petroleum products in contravention of U.S. sanctions against the Iranian regime.
- Mada’in Novin Traders (MNT) – an Iran- and Iraq-based company associated with multiple IRGC-QF officials, including Vali Gholizadeh. OFAC states that Gholizadeh has worked with Saburinezhad for the benefit of both AKMS and MNT.
- Middle East Saman Chemical Company – an Iran-based company. OFAC states that it maintained an account at Rashed Exchange, an Iran-based exchange house used to convert currency for the IRGC-QF.
As a result of this action, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. Because U.S. persons are generally prohibited from dealing with entities on the SDN List, persons who engage in certain transactions with these designated persons may themselves be exposed to designation. OFAC has indicated that any foreign financial institution that knowingly facilitates a significant financial transaction or provides significant financial services for these persons could be subject to U.S. correspondent account sanctions or payable-through account sanctions.