US takes ‘massive action,’ sanctions 115 people, entities who smuggle oil for Iran

The evasion network operates in 17 jurisdictions globally, including in the United Arab Emirates, Marshall Islands, India, Turkey, and Singapore, as well as European Union countries and Switzerland.

By Mike Wagenheim, JNS

The U.S. The Treasury Department took its largest action against Iran since 2018, announcing sanctions against a shipping empire managed by Mohammad Hossein Shamkhani, whose father Ali Shamkhani is a senior political adviser to the Islamic Republic’s supreme leader.

A senior Treasury Department official told reporters on background on Wednesday that the federal government’s “massive action” includes sanctioning 15 shipping firms, 52 vessels—including oil tankers and container ships—12 people and 53 other entities.

The European Union designated the younger Shamkhani last week. Washington sanctioned his father, who was reportedly hurt severely in an Israeli airstrike on Iran in June 2020.

“The Shamkhani family’s shipping empire highlights how the Iranian regime elites leverage their positions to accrue massive wealth and fund the regime’s dangerous behavior,” Scott Bessent, U.S. Treasury Secretary, stated.

“The over 115 sanctions issued today are the largest to date since the Trump administration implemented our campaign of maximum pressure on Iran,” Bessent stated.

“These actions put America first by targeting regime elites that profit while Tehran threatens the safety of the United States.”

The younger Shamkhani’s network produces tens of billions of dollars for the Iranian regime by transporting oil and petroleum products, and other cargo, from Iran and Russia to sales points worldwide, largely in China, per the Treasury Department.

The evasion network operates in 17 jurisdictions globally, including in the United Arab Emirates, Marshall Islands, India, Turkey and Singapore, as well as European Union countries and Switzerland, according to the senior U.S. official, who spoke on background.

“Our goal is to limit Tehran’s primary source of revenue, to pressure the regime to end its nuclear threat, curtail its ballistic missile program and stop its support for terrorist groups,” Michael Faulkender, the deputy treasury secretary, told reporters.

“We are not going to allow Tehran to secure the funds it needs to advance its dangerous weapons programs and further its destabilizing agenda,” Faulkender said. “We will continue to restrict Iran’s ability to circumvent sanctions and launder billions from this trade.”

Shamkhani “leverages corruption through his father’s political influence at the highest levels of the Iranian regime to build and operate a massive fleet of tankers and containerships,” the Treasury Department stated.

Under the corrupt system, the Shamkani network purchases oil from Iranian or Russian entities and routes payments through shell companies to pay suppliers. The network creates falsified documents to launder the oil shipments, with the shells purchasing the oil, according to the Treasury Department.

Shamkhani network vessels transport the oil to buyers, who pay via front companies. The funds are then laundered through a complex web of entities engaged in commodities trading, the federal government said.

The Shamkhani family has allegedly used its wealth to get foreign passports in exchange for investments from financiers, allowing family members to “travel undetected and hide their connections to Iran when conducting business overseas in furtherance of their corrupt schemes,” Washington charges.

Operators and managers of the family’s fleet of oil tankers and containerships allegedly change often to make it harder for authorities to know who is responsible for each vessel at a given time. The network also is accused of hiding its cargo contents.

The people sanctioned on Wednesday are from Italy, India and the United Arab Emirates and sanctioned shipping firms are based in the Marshall Islands, Seychelles and Liberia.

The Trump administration does not anticipate “sustained disruption to global oil markets,” calling the new measures a “targeted action” that the Treasury Department hopes will help “legitimate firms avoid this trade and further disrupt Iran’s ability to raise revenue for its destabilizing activity,” a treasury official told reporters.

This calendar year, Iranian oil exports have dropped from 1.8 million barrels daily to 1.2 million, the Treasury Department official said.

“We’re still engaging in further action to bring that number down even more. At the height of the maximum pressure campaign during the first administration, we got it down to a few 100,000 barrels a day,” the official said. “We’re going to continue applying pressure to bring down Iran’s ability to sell oil to fund its nefarious activities.”