US applies sanctions over Iran shadow banking, drone network

The United States on Thursday announced more sanctions against people and firms associated with Iran and with what it said was an illicit banking network used to conceal transactions.

The U.S. said it placed the penalties on 39 firms linked to a shadow banking system that helped to obfuscate financial activity between sanctioned Iranian firms and their foreign buyers, namely for petrochemicals produced in Iran.

The Treasury Department said the companies — from Hong Kong to the United Arab Emirates — made up a “significant ‘shadow banking’ network” that gave cover to sanctioned Iranian entities to disguise petrochemical sales with foreign customers.

“Today’s action demonstrates the United States’ commitment to enforcing our sanctions and our ability to disrupt Iran’s foreign financial networks, which it uses to launder funds,” Treasury Deputy Secretary Wally Adeyemo said.

Secretary of State Antony Blinken said in a written statement that the U.S. “will continue to disrupt attempts to evade U.S. sanctions.”

Also included in the Thursday announcement is a set of financial penalties on a China-based network of firms and one person accused of being responsible for the sale and shipment of thousands of drone components to Iran.

Iran is accused of supplying Russia with drones that are used to bomb Ukrainian civilians as the Kremlin continues its invasion of its Ukraine.

Among other things, the sanctions deny the people and firms access to any property or financial assets held in the U.S. and prevent U.S. companies and citizens from doing business with them.

The sanctions come one day after Iranian prison officials and others were hit with sanctions over the treatment of young women and girls.

Tensions between the U.S. and Iran are high amid months of anti-government protests in Iran and Western anger at Iran’s export of attack drones to Russian forces fighting in Ukraine.