US sanctions Iranian network for banking evasion and surveillance technology
The US Treasury has sanctioned 18 Iranian entities and individuals for developing sophisticated banking schemes to circumvent sanctions and providing surveillance technologies used to oppress Iranian citizens, including facial recognition software targeting women violating hijab laws.
The Office of Foreign Assets Control designated companies and officials involved in Iran’s offshore Cross-Border Interbank Messaging System (‘CIMS’), and information technology firms providing surveillance capabilities to Iranian security services, Treasury announced.
‘As a result of President Trump’s maximum pressure campaign and increasing isolation from the global financial system, the Iranian regime is running out of places to hide,’ said Treasury Secretary Scott Bessent. ‘Treasury will continue to disrupt Iran’s schemes aimed at evading our sanctions, block its access to revenue, and starve its weapons programs of capital.’
The designations target RUNC Exchange System Company which helped develop the CIMS, designed to circumvent controls on traditional payment systems. The Central Bank of Iran authorised CIMS use outside Iran in late 2023 ‘to insulate the regime’s foreign financial transactions from sanctions and to facilitate Iranian banking relations with foreign partners’.
Iran has been working on its own domestic inter-bank messaging system since it was disconnected from the SWIFT international banking system several times, the last in November 2018. The move by the EU, which was under pressure from the US, was part of intensified sanctions aimed at pressuring Iran over its nuclear activities.
CIMS has been used to connect with the US-sanctioned Chinese Bank of Kunlun ‘to circumvent sanctions and further banking cooperation between Iran and China’, Treasury stated, warning foreign financial institutions that using CIMS places them ‘at heightened risk of economic sanctions for transacting with sanctioned Iranian banks’.
Treasury also sanctioned Cyrus Offshore Bank, established in 2021 as ‘a mechanism for the Iranian government to avoid sanctions while making purchases abroad’. The bank is ‘secretly owned and staffed’ by the sanctioned Iranian financial institution Parsian Bank, Treasury alleged.
It also targeted Pasargad Arian Information and Communication Technology Company, a software holding company owned by sanctioned Pasargad Bank that has ‘diversified their information technology activities with the backing of the Iranian government to develop surveillance technologies for the Iranian police state’.
The software company and its director Shahab Javanmardi allegedly have strong links to the Iranian Ministry of Intelligence, with other executives serving as IRGC members, according to Treasury. It said the firm also developed an indigenous messaging application developed to enable the Iranian government to block Telegram in the country ‘due to its heavy use by protestors across Iran’, and owns facial recognition software called Behnama, used by Iranian police and Morality Police to enforce women’s compliance with the mandatory hijab laws.
Treasury designated three RUNC officials including managing director Ali Morteza Birang, vice chairman Mohammad Shafipour, and board chairman Seyyed Mahmoud Reza Sajjadi. It also sanctioned three additional Cyrus Bank executives who are Parsian Bank officials serving in dual roles, along with eight FANAP subsidiaries involved in payment processing, telecommunications, and data services that support both Iran’s financial sector and surveillance capabilities.
All property and interests of designated persons in the United States or under US control are blocked, with violations potentially resulting in civil or criminal penalties. Foreign financial institutions engaging with designated persons risk secondary sanctions.
Cyrus Bank did not immediately reply to an email for comment and it was not possible to reach the other entities or individuals designated by Treasury’s action.
