“Economic Wrath” Campaign: U.S. Sanctions Iran’s Hidden Banking Network

The U.S. Department of the Treasury announced that it has sanctioned 35 entities and individuals for their roles in the Islamic Republic’s “shadow banking network” and for assisting in the evasion of sanctions, as part of the “Economic Wrath” campaign.

In a statement issued by the Department’s Office of Foreign Assets Control (OFAC), it was noted that these individuals and entities have been involved in the movement of tens of billions of dollars in financial resources linked to sanctions evasion and what has been termed “Iran’s support for terrorism.” Scott Bessent, the U.S. Secretary of the Treasury, stated: “Iran’s shadow banking system serves as a critical financial lifeline for its armed forces, enabling activities that disrupt global trade and fuel violence across the Middle East.”

He added that “illicit funds funneled through this network support the regime’s ongoing terrorist operations, posing a direct threat to U.S. personnel, regional allies, and the global economy. Financial institutions are on notice: Any institution that facilitates or engages with these networks is at risk of severe consequences.”

The Treasury Department emphasized that these networks provide Iran’s armed forces, including the Islamic Revolutionary Guard Corps (IRGC), access to the international financial system, enabling them to receive oil revenue, purchase sensitive components for missiles and other weapons systems, and transfer funds to proxy forces.

Alongside today’s action, OFAC is issuing firm guidance to warn about the significant sanctions exposure related to making “toll” payments to the Government of Iran or the IRGC for passage through the Strait of Hormuz. These payments create sanctions risk for U.S. and non-U.S. persons, including financial institutions.

According to the statement, Iranian banks cut off from the international financial system rely on private companies known as “rahbars,” which manage thousands of overseas shell companies used to execute payments for Iranian imports and exports. These rahbars use shell company accounts held at foreign banks in key financial jurisdictions to help sanctioned Iranian banks illicitly access the formal international financial system. The rahbar companies closely coordinate with Iranian exchange houses and a myriad of front companies in multiple jurisdictions to facilitate payments for Iran’s sanctioned trade, including on behalf of the IRGC, Iran’s Armed Forces General Staff (AFGS), Iran’s National Iranian Oil Company (NIOC), and other sanctioned entities.

This move is a continuation of the U.S. government’s “Maximum Pressure” policy against Iran, a campaign that, since 2025, has sanctioned hundreds of individuals, companies, ships, and aircraft in connection with Iran’s financial and commercial activities.