U.S. Treasury Imposes Sanctions on Entities in Iran and Venezuela

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has announced a series of sanctions targeting individuals and entities across Iran and Venezuela. These actions address various areas, including alleged human rights abuses and the financing of security forces in Iran, the operation of shadow banking networks, the use of digital asset exchanges for sanctions evasion, and involvement in Venezuela's oil sector.

Sanctions Related to Iran

OFAC designated numerous Iranian officials and entities under several Executive Orders, citing their roles in internal security, human rights, and financial activities linked to the Iranian government and the Islamic Revolutionary Guard Corps (IRGC).

U.S. Secretary of the Treasury Scott Bessent stated that these sanctions were intended to address activities concerning human rights and to support the Iranian populace.

Several senior Iranian officials were designated pursuant to Executive Order (E.O.) 13553 (concerning human rights abuses) and E.O. 13876 (targeting the Supreme Leader and affiliates). Their designations cited involvement in or oversight of security forces implicated in the repression of protests.

• Ali Larijani: Secretary of the Supreme Council for National Security (SCNS), designated under E.O. 13876, with the designation citing that he called for force against protestors.
• Eskandar Momeni Kalagari: Iran’s Minister of the Interior, who oversees the Law Enforcement Forces (LEF). The LEF was identified in the designation as responsible for actions cited to include mass killings, arrests, and forced disappearances during protests.
• Majid Khademi: Head of the IRGC Intelligence Organization, whose role was cited for suppressing protests through alleged violence, arbitrary detentions, and intimidation.
• Mohammad Reza Hashemifar: Commander of the LEF in Lorestan Province, with security forces in Lorestan Province cited for engaging in actions against civilians.
• Nematollah Bagheri: IRGC commander of Lorestan Province, with IRGC elements cited for attacking a hospital in Ilam Province.
• Azizollah Maleki: LEF commander for Fars Province, with security forces in Fars Province cited for causing deaths among demonstrators.
• Yadollah Buali: IRGC commander for Fars Province, with Shiraz, in Fars Province, cited as having hospitals overwhelmed with gunshot wound patients.
• Ghorban Mohammad Valizadeh: Commander of the IRGC’s Seyyad al-Shohada Corps in Tehran province.
• Hossein Zare Kamali: IRGC commander of Hamadan province.
• Hamid Damghani: IRGC commander of Gilan province.
• Mehdi Hajian: Commander of the LEF for Kermanshah province.

OFAC also targeted individuals and entities involved in shadow banking networks, which were cited for facilitating the laundering of proceeds from Iranian petroleum and petrochemical sales. These designations were made pursuant to E.O. 13902, which targets Iran’s financial, petroleum, and petrochemical sectors.

Bank Melli's Rahbar Network:

• Nikan Pezhvak Aria Kish Company (Nikan Pezhvak) (Iran-based): Identified as the head of Bank Melli's 'rahbar' network, which processed billions in transactions for entities including the National Iranian Oil Company (NIOC) and IRGC.
• Empire International Trading FZE (Empire International) (UAE-based): Bank Melli's UAE-based 'rahbar' company for foreign currency management.
• Golden Mist PTE. Ltd. (Singapore-based): Identified as a cover company used by Empire International to receive revenue, including payments to NIOC.
• Mehdi Rashno, Bashir Abbaspour Qomi, and Hamid Reza Khamer: Board members of Nikan Pezhvak.

Bank Shahr's Rahbar Network:

• HMS Trading FZE (HMS Trading) (UAE-based): Identified as a commercial front company acting on behalf of Shahr Bank, overseeing trade activities of its 'rahbar' network.
• Tejarat Hermes Energy Qeshm (Iran-based): Identified as primarily responsible for commercial trade activities of Shahr Bank's 'rahbar' network.
• Masoud Mahdavi Ardakani, Masoud Shamani, and Akbar Givari: Senior officials of Tejarat Hermes Energy Qeshm.

HMS Trading was cited for utilizing various financial front companies, also designated, including:

• Shine Road Trading FZE (UAE)
• Crystal Gas FZE (UAE)
• Turkiz Fuel Trading LLC (UAE)
• Desert Pulse Trading FZE (UAE)
• Limonium Petrochemicals Trading LLC SOC (UAE)
• Naviera Shipping and Trading FZ LLC (UAE)
• Nanshan Ltd. (United Kingdom)

These front companies were cited for transactions involving Iranian crude oil, oil distillates, and petrochemical products, often involving NIOC.

OFAC designated two UK-registered digital asset exchanges and an Iranian investor, highlighting concerns regarding the use of digital assets for sanctions evasion. These actions were taken pursuant to E.O. 13224 (counterterrorism authority) and E.O. 13902.

• Babak Morteza Zanjani: An Iranian investor previously sentenced for embezzling billions in Iranian oil revenue. Following his release, Zanjani was cited for providing financial backing for projects supporting the IRGC and the Iranian government.
• Zedcex Exchange, Ltd. and Zedxion Exchange, Ltd.: Two UK-registered digital asset exchanges with reported connections to Zanjani. The exchanges were cited for processing large volumes of funds associated with IRGC-linked counterparties.

These are OFAC's first designations of digital asset exchanges for operating within the financial sector of the Iranian economy.

The U.S. reiterated its support for the Iranian people's access to the internet, referencing General License D-2 (31 CFR § 560.540) which facilitates this access.

Sanctions Related to Venezuela's Oil Sector

OFAC also imposed sanctions on four companies and identified four oil tankers as blocked property for their operations within Venezuela's oil sector. This action aligns with previous OFAC measures against Petroleos de Venezuela, S.A. (PDVSA), designated on January 28, 2019 (E.O. 13850), and August 5, 2019 (E.O. 13884), and other PDVSA-linked entities.

U.S. Secretary of the Treasury Scott Bessent stated a goal of preventing revenue generation for the Maduro administration through oil exports.

• Corniola Limited (registered owner) and Krape Myrtle Co LTD (ship manager and operator) were designated. The vessel NORD STAR (IMO: 9323596) was identified as blocked property.
• Winky International Limited (registered owner) was designated. The vessel ROSALIND, also known as LUNAR TIDE (IMO: 9277735), was identified as blocked property.
• Aries Global Investment LTD (registered owner) was designated. The vessels DELLA (IMO: 9227479) and VALIANT (IMO: 9409247) were identified as blocked property.

Implications of the Sanctions

As a consequence of these actions, all property and interests in property of the designated or blocked entities that are located in the United States or are under the control of U.S. persons are blocked and must be reported to OFAC. This applies also to entities owned 50 percent or more, directly or indirectly, by one or more blocked persons. Transactions by U.S. persons or within the U.S. involving blocked property or interests are generally prohibited unless authorized by an OFAC license.

Violations of U.S. sanctions may lead to civil or criminal penalties for both U.S. and foreign individuals and entities. Financial institutions and other persons may also face sanctions risks for engaging in certain transactions or activities with designated or blocked persons. OFAC states that its sanctions aim to encourage a change in behavior and provides information regarding the process for seeking removal from an OFAC list.