Introduction#

The U.S. Department of the Treasury has taken significant action by designating 35 entities and individuals involved in Iran's shadow banking system. This system is crucial for facilitating the movement of large sums of money, often linked to evading international sanctions and financing terrorism.

Understanding Shadow Banking#

Shadow banking refers to financial activities conducted by non-bank entities that operate outside traditional banking regulations. In Iran, this system allows the armed forces, including the Islamic Revolutionary Guard Corps, to access the global financial system. This access enables them to receive payments for illegal oil sales, acquire sensitive materials for weapons, and fund terrorist groups.

Treasury's Concerns#

Treasury Secretary Scott Bessent highlighted that Iran's shadow banking system is vital for its military operations, which disrupt global trade and contribute to violence in the Middle East. The funds funneled through this network are seen as a direct threat to U.S. personnel and allies, as well as the global economy.

Recent Sanctions#

The recent sanctions were implemented under Executive Order 13902, targeting individuals and entities in Iran's financial sector, and Executive Order 13224, which focuses on counterterrorism. This move builds on previous actions taken in January 2026 against specific networks within Iran's banking system.

Role of Rahbars#

Iranian banks, cut off from international financial systems, depend on private companies known as rahbars. These companies manage numerous overseas shell companies to facilitate payments for Iranian trade. For example, Farab Soroush Afagh Qeshm Company acts on behalf of Shahr Bank to manage funds through foreign front companies. Additionally, UK-based Shuqun LTD has been involved in transferring significant amounts for Iranian oil, indicating the extensive reach of these networks.

Conclusion#

The U.S. Treasury's actions reflect ongoing efforts to dismantle Iran's shadow banking system, which poses risks not only to regional stability but also to global economic security.