U.S. Imposes New Sanctions Targeting Iran's Military Financing

On September 16, 2025, the U.S. Department of the Treasury announced a new round of sanctions aimed at individuals and entities accused of financing Iran's military operations. This action specifically targets over a dozen individuals and firms based in Hong Kong and the United Arab Emirates (UAE) that are alleged to facilitate illicit financial transfers benefiting the Islamic Revolutionary Guard Corps (IRGC) and Iran's Ministry of Defense and Armed Forces Logistics (MODAFL). The sanctions are part of a broader strategy to disrupt Iran's military funding, particularly through the sale of Iranian oil.

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Among those sanctioned are Iranian nationals Alireza Derakhshan and Arash Estaki Alivand, who are accused of coordinating the transfer of approximately $100 million in cryptocurrency derived from oil sales to support Iran's military. The U.S. Treasury claims these individuals utilized a network of front companies to facilitate these transactions, effectively laundering money through the international financial system.

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The Treasury Department described the operations of these sanctioned entities as part of "shadow banking" networks, which exploit loopholes in the international financial system to evade sanctions. These networks are characterized by their use of overseas front companies and cryptocurrency, allowing them to obscure the origins of funds and bypass regulatory scrutiny. Treasury Under Secretary for Terrorism and Financial Intelligence John K. Hurley emphasized the U.S. commitment to disrupting these financial streams that support Iran's military capabilities.

The U.S. Treasury Department Imposes Sanctions on Iranian 'Shadow Banks' Network

The U.S. Treasury's announcement highlighted the ongoing efforts to limit Iran's military funding, stating, “Iranian entities rely on shadow banking networks to evade sanctions and move millions through the international financial system.” The sanctions were enacted under an executive order aimed at curtailing Iran's oil exports and preventing the country from acquiring nuclear weapons. The State Department further noted that the funds from these operations are used to support regional terrorist proxies and advance weapons systems that threaten U.S. forces and allies.

The HillThe U.S. Treasury Department Imposes Sanctions on Iranian 'Shadow Banks' NetworkDawn

While the U.S. government maintains that these sanctions are necessary for national security, critics argue that such measures may exacerbate tensions and hinder diplomatic efforts. Iran has not publicly responded to the latest sanctions, but previous statements from Iranian officials suggest that they view U.S. sanctions as a barrier to negotiations regarding their nuclear program.

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There is a noted discrepancy regarding the effectiveness of these sanctions. While the U.S. claims that these measures will significantly disrupt Iran's military financing, some analysts argue that Iran has increasingly turned to cryptocurrency and other means to evade sanctions, complicating the enforcement of such measures.

WRAL

The U.S. sanctions come amid heightened tensions following the activation of a "snapback mechanism" by France, Britain, and Germany, which reimposes United Nations sanctions on Iran due to its non-compliance with the 2015 nuclear deal. The future of U.S.-Iran negotiations remains uncertain, particularly in light of recent military actions and ongoing sanctions.

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• “Iranian ‘shadow banking’ networks like these—run by trusted illicit financial facilitators—abuse the international financial system, and evade sanctions by laundering money through overseas front companies and cryptocurrency,” — U.S. Treasury Department

The Hill

• “Under President Trump’s leadership, we will continue to disrupt these key financial streams that fund Iran’s weapons programs and malign activities in the Middle East and beyond.” — John K. Hurley, U.S. Treasury Under Secretary for Terrorism and Financial Intelligence

The Hill