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In a new round of US Sanctions, OFAC targets Iran's "Shadow Banking" system.

On Thursday, the United States Government blacklisted entities in China and other countries for allegedly transferring billions of dollars related to the sale and shipment of Iranian gas and petrochemical products.

The "shadow banking" group, as identified by the Treasury Department in a January 2020 executive order, includes, among other places, front companies, exchanges, and other enterprises situated in Hong Kong, Singapore, Dubai, and the Marshall Islands.


The Office of Foreign Assets Control (OFAC) designations target "one of several multi-jurisdictional illicit finance systems" that underlie Iranian commerce embargoed by the United States.


This action comes less than a month after the government blacklisted nine additional entities in Iran, Singapore, and Malaysia for allegedly operating a similar scheme.


They are suspected of working together to conceal the true buyers and sellers of butane, propane, polyethylene, and other Iranian goods.

Officials from the United States have accused the entities of concealing the transactions through the global financial system.


OFAC stated in a statement that "Iranian exchange houses create front companies abroad to enable trade on behalf of their Iranian clients, with foreign currency transactions maintained via internal ledgers."


The sanctions target 39 entities, many of which are domiciled in the United Arab Emirates and Hong Kong, that assist Iran's access to the global financial system, with US portraying them as a network of "shadow banking" that moves billions of dollars.


Those targeted had allowed access to the international financial system to companies already hit with Iran-related sanctions, such as Persian Gulf Petrochemical Industry Commercial Co (PGPICC) and Triliance Petrochemical Co Ltd, and helped them conceal their trade with foreign customers.


The most recent step against Iran comes as efforts to restore the 2015 nuclear deal have failed, and as relations between the Islamic Republic and the West have been increasingly tense due to the continuation of anti-government protests in Iran.


As the likelihood of restoring the nuclear pact has diminished, Washington has targeted Chinese enterprises for exporting Iranian petrochemicals.


"Iran cultivates complex sanctions evasion networks where foreign buyers, exchange houses, and dozens of front companies cooperatively help sanctioned Iranian companies to continue to trade" stated Deputy Treasury Secretary Wally Adeyemo.

By fLEXI tEAM


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