The United States government significantly increased pressure on the Iranian regime on Tuesday by levying sanctions on 35 entities and individuals involved in Iran’s shadow banking operations, Reuters reported.
At the same time, the administration issued a stern warning to banks conducting business with Chinese “teapot" refineries accused of paying tolls to the Iranian government or the Islamic Revolutionary Guard Corps (IRGC) for shipments crossing the Strait of Hormuz.
The Treasury Department’s Office of Foreign Assets Control (OFAC) stated that the sanctioned parties had helped move the equivalent of tens of billions of dollars linked to sanctions evasion and Iran’s sponsorship of terrorism.
In a separate advisory, OFAC cautioned financial institutions against engaging with any companies making payments to Iran or the IRGC for safe passage through the strategic waterway, warning that such dealings could expose them to substantial sanctions.
The department specifically highlighted independent Chinese teapot refineries, mostly located in Shandong province, due to their prominent role in importing and refining Iranian oil. Some of these refineries had previously utilized the US financial system for dollar transactions and acquiring American goods.
Treasury officials explained that Tuesday’s sanctions targeted those who enabled Iran’s armed forces, including the IRGC, to access the global financial system. This access allowed them to receive payments from illicit oil sales, acquire sensitive components for missiles and weapons systems, and funnel money to Iranian proxy groups.
“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," Treasury Secretary Scott Bessent said in a statement.
"Illicit funds funneled through this network support the regime’s ongoing terrorist operations, posing a direct threat to US personnel, regional allies, and the global economy," he said, adding any institution that facilitated or engaged with these networks was at risk of "severe consequences."
Among the newly designated entities is Farab Soroush Afagh Qeshm Company, which reportedly collaborates with Iran’s Shahr Bank to facilitate Iranian oil sales, along with two of its senior executives.
OFAC also targeted several rahbar companies linked to Bank Sina, which is controlled by Iran’s Supreme Leader, and the military-affiliated Bank Sepah, known for funding Iran’s ballistic missile program.
Two additional companies, Nix Energy and Tai Lung Trading, were designated for allegedly transferring millions of dollars on behalf of previously sanctioned Iranian individuals.
In a parallel warning, the Treasury Department emphasized that no payments to Iran or the IRGC for passage through the Strait of Hormuz are permitted for US persons or institutions. Foreign financial entities risk sanctions exposure if they engage in transactions involving such “tolls."