OFAC Makes Further Iran-related Designations, Counter Terrorism Designations

The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) on January 30, 2024, designated two cybersecurity experts affiliated with the Islamic State of Iraq and Syria (“ISIS”) for providing ISIS leadership and supporters with cybersecurity training, enabling their use of virtual currency, and supporting the terrorist group’s recruitment. Additionally, OFAC designated an ISIS financial facilitator involved in transferring funds to ISIS-affiliated individuals in Syria. These actions emphasize the United States’ commitment to the mission of the Counter ISIS Finance Group, a working group of over eighty countries and international organizations committed to defeating the terrorist group. A Treasury Secretary stated that the “actions disrupt ISIS’s ability to move funds, including through the use of cryptocurrency, and leverage its online presence to recruit and promote its terrorist ideology,” emphasizing the interest in combating ISIS’s evolving financial methods for funding. For a full list of the individuals designated please refer to the following list.

This action builds upon Iran related counter terrorism designations that were made the day prior, concerning an Iranian transnational assassinations network and an Iraqi bank that served as a conduit for Iranian terrorist financing.

Designations Concerning Transnational Assassinations Network

OFAC and the United Kingdom in a joint action on January 29, 2024, against a network of individuals that targeted Iranian dissidents and opposition activists for assassination at the direction of the Iranian regime, designated several individuals. This action is being taken in conjunction with unsealing of an indictment by the Department of Justice and an ongoing Federal Bureau of Investigation action. The network is led by Iranian narcotics trafficker Naji Ibrahim Sharifi-Zindashti (“Zindashti”) and operates at the behest of Iran’s Ministry of Intelligence and Security (“MOIS”). Zindashti’s network has conducted several acts of violence including assassinations and kidnappings across multiple jurisdictions to silence the Iranian regime’s perceived critics. The MOIS and Iran’s Islamic Revolutionary Guard Corps have long targeted perceived regime opponents in acts of transnational repression outside of Iran. A wide range of dissidents, journalists, activists, and former Iranian officials have been targeted for assassination, kidnapping, and hacking operations across numerous countries. A Treasury Secretary highlighted that the “Iranian regime’s continued efforts to target dissidents and activists demonstrate the regime’s deep insecurity and attempt to expand Iran’s domestic repression internationally” and that the US along with its allies will continue to use all tools available to stop this threat. This action builds upon previous OFAC designations made on October 2011, December 2020, September 2021, June 2023 and December 2023 concerning the network. For more information concerning the individuals designated please refer to the following press release.

Designations and Finding and Notice of Proposed Rulemaking Concerning Iraqi Bank

Additionally, OFAC on January 29, 2024, imposed sanctions on Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing by Iran. This action was in conjunction with the US Department of the Treasury issuing a finding and notice of proposed rulemaking that identified the bank as a foreign financial institution of primary money laundering concern. Along with its finding, the Financial Crimes Enforcement Network proposed a rule that would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.

Al-Huda Bank and its related proxies, divert funds that could otherwise support legitimate business and the economic aspirations of the Iraqi people. These bad actors fuel violence and terrorism that threatens the stability of Iraq and its people. Through this action, the US demonstrates its commitment to its longstanding shared work with the Government of Iraq to strengthen the Iraqi economy and protect both the U.S. and Iraqi financial systems from abuse. A Treasury Secretary stated that while “Iraq has made significant progress in rooting out illicit activity from its financial system” ultimately “unscrupulous actors continue to seek to take advantage of the Iraqi economy” for illicit activities. For further information please refer to the following press release.

Recent Developments

The aforementioned Iran related sanctions fall at a time of rising tensions following the three US troops that were tragically killed, and twenty-five others that were injured, because of a drone attack by an alleged Iranian-backed militant group on a US military base in Jordan on January 28, 2024. The attack raises the likelihood of further Iranian sanctions being imposed by the US.

OFAC Designation Implications

As a result of OFAC’s designations, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

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