By PAUL O’DONOGHUE, Senior Correspondent
THE US Treasury has warned that illicit oil sales and stablecoins are helping to fund Iran’s Islamic Revolutionary Guard Corps (IRGC).
The alert from FinCEN, the Treasury’s AML unit, warns financial institutions about money laundering and sanctions practises the IRGC commonly uses.
These include:
- Shell companies
- “Shadow banking” networks
- Digital assets, including stablecoins
- Illicit oil sales
The FinCEN alert issued a list of IRGC ‘red flags’ for financial institutions to note. These include:
- Shipping companies with Iranian counterparties
- Efforts to disguise vessel information and ownership, or efforts to disguise oil origins
- Unusual use of exchange houses
- Unusual digital asset payments by petroleum, shipping, trading, or trust companies
- Unregistered P2P exchangers, foreign-located money services businesses, and nested digital asset service providers
Scott Bessent, Secretary of the Treasury, said: “Degraded by Economic Fury, the Iranian military is desperately trying to fund its weapons programs and terrorist proxies.
“Treasury will continue to deny the Islamic Revolutionary Guard Corps access to the financial networks it exploits to fund its terrorist acts.”
FinCEN warning on IRGC illicit activities
FinCEN said the IRGC is “one of the most destabilizing forces in the Middle East and a primary supporter of terrorism in the region and beyond.”
“The IRGC and its subordinate units smuggle oil to international buyers. [They] use the proceeds to fund procurement, domestic weapons development, and terrorist activity abroad,” FinCEN said.
The alert said the IRGC relies on a “shadow fleet” of ageing vessels that operate outside standard maritime rules.
FinCEN said agents often move proceeds through “networks of exchange houses and front companies.”
It added, “The IRGC and other Iranian regime actors rely on multi-jurisdictional ‘shadow banking’ networks.
“[These are] comprised of exchange houses, trading companies, and front companies. [These] sell oil and other commodities abroad, launder the proceeds, and then procure weapons and other materiels.”
FinCEN also warned that “front companies in third-country jurisdictions… are used to establish bank accounts outside of Iran through which sanctioned entities access the international banking system.”
It said this structure allows “sanctioned entities like the IRGC” to conduct transactions “without repatriating funds to Iran.”
FinCEN also warned about that IRGC supporters may use digital assets.
“Like other illicit actors, Iranian facilitators are likely to use stablecoins for this purpose, due to stablecoins’ relative liquidity, ease of settlement, and exchange rate stability,” it said.
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