OFAC sanctions oil smugglers supporting Iran’s military

The US Treasury Department’s Office of Foreign Assets Control (OFAC) has imposed sanctions on an individual and businesses involved in international oil smuggling. In a press release, OFAC stated that those targeted were using the proceeds of their activities to support Iran’s elite Islamic Revolutionary Guard Corps (IRGC). The sanctioned entities were being used as intermediaries in an attempt to obscure the participation of the IRGC. 

The key individual targeted was Mahmood Rashid Amur Al Habsi, an Omani national who was working with other previously sanctioned individuals. OFAC accused Al Habsi of tampering with identification systems on vessels, forging shipping documents, and paying bribes, all with a view to circumventing sanctions on Iran.

Companies registered in Iran, Oman, Liberia, and Romania associated with Al Habsi have also been sanctioned. As a result, any assets Al Habsi or designated companies associated with him hold in the US will be frozen, and US companies will not be allowed to do business with them. Foreign entities collaborating with sanctioned persons or businesses can also face sanctions.

The announcement marks a continuation of the Trump administration’s Iran sanctions policy. In 2019, President Trump designated the IRGC as a ‘foreign terrorist organization’, the first time the US had taken this step against a country’s military. Since taking office President Biden had signaled a desire to break with Trump’s use of “maximum pressure” on Iran, a strategy that relied heavily on sanctions. Repealing the designation of the IRGC would have been politically contentious. But Biden’s willingness to not only maintain the designation but also take further steps against enablers of Iran’s military reflects the perilous state of current attempts to restore the Iran nuclear deal, or Joint Comprehensive Plan of Action (JCPOA).

The broader strategy of using executive powers to restrict financial support for terrorist groups stretches much further back than the Trump administration. Executive Order (EO) 13224, the authority used to sanction Al Habsi and his organizations, was signed by President Bush in September 2001. The EO was then amended in 2019 to create new designation criteria, support secondary sanctions against foreign financial institutions and consolidate counterterrorism authorities under a single sanctions program.

With individual countries and international organizations operating a range of sanctions regimes, entities seeking new ways to evade those sanctions, and the geopolitics of the Middle East growing more volatile, the need for a dynamic sanctions program has never been greater. Our global sanctions report, published this month, gives you up-to-date insights on the concepts, hotspots, and trends you need to know about. Download it here.