US Treasury Designates Vast Network of IRGC-QF Officials and Front Companies in Iraq, Iran

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated 20 Iran- and Iraq-based front companies, senior officials, and business associates that provide support to or act for or on behalf of the Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF) in addition to transferring lethal aid to Iranian-backed terrorist militias in Iraq such as Kata’ib Hizballah (KH) and Asa’ib Ahl al-Haq (AAH).

Among other malign activities, these entities and individuals perpetrated or supported: smuggling through the Iraqi port of Umm Qasr; money laundering through Iraqi front companies; selling Iranian oil to the Syrian regime; smuggling weapons to Iraq and Yemen; promoting propaganda efforts in Iraq on behalf of the IRGC-QF and its terrorist militias; intimidating Iraqi politicians; and using funds and public donations made to an ostensibly religious institution to supplement IRGC-QF budgets. The terrorist militias supported by the Iranian regime such as KH and AAH have continued to engage in attacks on U.S. and Coalition forces in Iraq.

“Iran employs a web of front companies to fund terrorist groups across the region, siphoning resources away from the Iranian people and prioritizing terrorist proxies over the basic needs of its people,” said Treasury Secretary Steven T. Mnuchin. “The United States maintains broad exceptions and authorizations for humanitarian aid including agriculture commodities, food, medicine, and medical devices to help the people of Iran combat the coronavirus.”

Today’s designations were taken pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorists and those providing support to or acting for or on behalf of designated terrorists or supporting acts of terrorism.

RECONSTRUCTION ORGANIZATION OF THE HOLY SHRINES IN IRAQ

The Reconstruction Organization of the Holy Shrines in Iraq (ROHSI) is an IRGC-QF-controlled organization based in Iran and Iraq whose leadership was appointed by the late IRGC-QF Commander Qassem Soleimani. Though ostensibly a religious institution, ROHSI has transferred millions of dollars to the Iraq-based Bahjat al Kawthar Company for Construction and Trading Ltd, also known as Kosar Company, another Iraq-based entity under the IRGC-QF’s control. Kosar Company has served as a base for Iranian intelligence activities in Iraq, including the shipment of weapons and ammunition to Iranian-backed terrorist militia groups.

Additionally, Kosar Company has received millions of dollars in transfers from the Central Bank of Iran, which was designated pursuant to E.O. 13224 in September 2019 for its financial support of the IRGC-QF and Lebanese Hizballah. Both the IRGC-QF and Hizballah have been designated by the U.S. Department of State as Foreign Terrorist Organizations under section 219 of the Immigration and Nationality Act.

In addition, IRGC-QF officials have used ROHSI’s funds to supplement IRGC-QF budgets, likely embezzling public donations intended for the construction and maintenance of Shiite shrines in Iraq.

ROHSI and Kosar Company are being designated pursuant to E.O. 13224 for being owned, controlled, or directed by, directly or indirectly, the IRGC-QF.

OFAC is also designating Mohammad Jalal Maab, the current head of ROHSI, who was personally appointed to the position by former IRGC-QF Commander Soleimani. Jalal Maab succeeded Hassan Pelarak, an IRGC-QF officer and co-owner of Kosar Company, who was selected by Soleimani to serve as his special assistant on an IRGC-QF-led committee focused on sanctions evasions activity. Pelarak also worked with IRGC-QF officials to transfer missiles, explosives, and small arms to Yemen, intensifying the Yemeni conflict and exacerbating one of the world’s worst humanitarian catastrophes.

Mohammad Jalal Maab is being designated pursuant to E.O. 13224 for being a leader or official of ROHSI. Hassan Pelarak is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, the IRGC-QF.

Alireza Fadakar, another co-owner of Kosar Company, has worked in Iraq on behalf of the IRGC-QF for several years and is an IRGC-QF commander in Najaf, Iraq. Muhammad al-Ghorayfi is an IRGC-QF affiliate and employee of Kosar Company who provides administrative support to Fadakar and has facilitated the travel of IRGC-QF officials between Iraq and Iran.

Alireza Fadakar is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, the IRGC-QF. Muhammad al-Ghorayfi is being designated pursuant to E.O. 13224 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Alireza Fadakar.

Masoud Shoustaripousti, another co-owner of Kosar Company, has worked in Iraq on behalf of the IRGC-QF for several years and has laundered money for the group. Shoushtaripousti worked with Mashallah Bakhtiari, who used Kosar Company to launder money and worked with officials at the Baghdad-based branch of Iran’s Bank Melli to deposit funds for the IRGC-QF in Iraq. OFAC designated Bank Melli in November 2018, pursuant to E.O. 13224, for acting as a conduit for payments to the IRGC-QF which also used Bank Melli to dispense funds to Iranian-backed terrorist groups in Iraq.

Masoud Shoustaripousti is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, the IRGC-QF. Mashallah Bakhtiari is being designated pursuant to E.O. 13224 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF.

AL KHAMAEL MARITIME SERVICES

Separately, OFAC is taking action against Al Khamael Maritime Services (AKMS), an Iraq-based company operating out of Umm Qasr port in which the IRGC-QF has a financial interest. The IRGC-QF leveraged Shiite militia group contacts to evade Iraqi government inspection protocol at Umm Qasr port and has charged foreign companies and vessels fees for services at its terminal at the port. AKMS also worked to sell Iranian-origin petroleum products in contravention of U.S. sanctions against the Iranian regime.

AKMS is being designated pursuant to E.O. 13224 for being owned, controlled, or directed by, directly or indirectly, the IRGC-QF.

OFAC is also designating Hasan Saburinezhad, also known as Engineer Morteza, who is involved in the finances of AKMS. As a representative of AKMS, Saburinezhad worked to facilitate the entry of Iranian shipments into Iraqi ports for the benefit of the IRGC-QF. Saburinezhad is also involved in IRGC-QF financial and economic activities between Iran, Iraq, and Syria, including smuggling activities along the Syria/Iraq border. Saburinezhad also runs smuggling routes to help Iraqi terrorist group KH and the IRGC-QF smuggle goods into Iraq from Iran, and has assisted KH in funding the acquisition and transfer of goods out of Iran.

Saburinezhad is the Managing Director and a member of the board of directors of Mada’in Novin Traders (MNT), an Iran- and Iraq-based company associated with multiple IRGC-QF officials, including Vali Gholizadeh, who has worked with Saburinezhad for the benefit of both AKMS and MNT.

Hasan Saburinezhad is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, the IRGC-QF. Mada’in Novin Traders is being designated pursuant to E.O. 13224 for being owned, controlled, or directed by, or to have acted or purported to act for or on behalf of, directly or indirectly, Saburinezhad. Gholizadeh is being designated pursuant to E.O. 13224 for being a leader or official of Mada’in Novin Traders.

OFAC is also designating Mohammed Saeed Odhafa Al Behadili, the Managing Director of AKMS, and Ali Hussein Falih Al-Mansoori, also known as Seyyed Rezvan, the company’s deputy managing director and head of its board of directors. Additionally, as of 2018, Al Behadili was focused on facilitating shipments and business transactions to circumvent U.S. sanctions against the Iranian regime. Al-Mansoori has worked with IRGC-QF officials on business issues related to AKMS.

Mohammed Saeed Odhafa Al Behadili is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, AKMS. Ali Hussein Falih Al-Mansoori is being designated pursuant to E.O. 13224 for being a leader or official of AKMS.

Sayyed Reza Musavifar, who is responsible for the accounts and finances of AKMS, has worked with the IRGC-QF to transfer money to terrorist militias, including KH and Lebanese Hizballah. In 2014, Musavifar transferred the equivalent of millions of dollars of foreign currency to senior IRGC-QF officials.

Musavifar is a part owner of Middle East Saman Chemical Company, an Iran-based company that maintained an account at Rashed Exchange, an Iran-based exchange house used to convert currency for the IRGC-QF that was designated in May 2018 for being owned or controlled by Mohammadreza Khedmati, an individual designated for support to the IRGC-QF.

Sayyed Reza Musavifar is being designated pursuant to E.O. 13224 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. Middle East Saman Chemical Company is being designated pursuant to E.O. 13224 for being owned, controlled, or directed by, or to have acted or purported to act for or on behalf of, directly or indirectly, Sayyed Reza Musavifar.

Additionally, Ali Farhan Asadi is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, AKMS.

SAYYED YASER MUSAVIR AND MEHDI GHASEMZADEH

IRGC-QF official Sayyed Yaser Musavir has been deployed to Iraq extensively since early 2014 in support of the IRGC-QF, and he has coordinated operations between the group and Iraqi terrorist militia group officials. In 2019, Musavir coordinated with IRGC-QF officials to sell Iranian petroleum products to Syria. In 2018, Musavir coordinated propaganda efforts with AAH on behalf of senior IRGC-QF officials. AAH was designated in January 2020 by the U.S. Department of State as a Foreign Terrorist Organization under section 219 of the Immigration and Nationality Act and as Specially Designated Global Terrorist (SDGT) pursuant to E.O. 13224.

Sayyed Yaser Musavir is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, the IRGC-QF.

Mehdi Ghasemzadeh is an IRGC-QF official and is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, the IRGC-QF.

SHAYKH ‘ADNAN AL-HAMIDAWI

Shaykh ‘Adnan Al-Hamidawi is a Special Operations Commander for KH who in 2019 planned to intimidate Iraqi politicians who did not support the removal of U.S. forces from Iraq. KH, an Iranian-backed terrorist militia group that has been a U.S. Department of State-designated Foreign Terrorist Organization and SDGT since 2009, receives lethal support from the IRGC-QF, and has been responsible for numerous terrorist acts against Iraqi, U.S., and Coalition forces in Iraq for over a decade, including bombings, rocket attacks, and sniper operations.

Shaykh ‘Adnan Al-Hamidawi is being designated pursuant to E.O. 13224 for having acted or purported to act for or on behalf of, directly or indirectly, KH.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of these persons that are in or come within the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve and property or interests in property of blocked persons.

In addition, persons that engage in certain transactions with the persons designated today may themselves be exposed to sanctions. Furthermore, any foreign financial institution that knowingly conducted or facilitated any significant transaction on behalf of individuals and entities designated today could be subject to U.S. correspondent account or payable-through account sanctions.

Identifying information on the entities designated.

(Source: OFAC)

By John Lee.

Deceptive shipping practices are reportedly being used in an attempt to conceal cargoes of sanctioned Iranian fuel oil being shipped via the Iraqi port of Khor al-Zubair.

Writing in Lloyds List, Michelle Wiese Bockmann gives details of a network of shell companies running ‘dark’ tankers to transport the sanctioned fuel.

Click here to read the full article.

By Bryant Harris for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Iraq likely to continue importing Iranian natural gas under US waiver renewal

Iraqi officials have indicated that the United States is likely to renew a key Iran sanctions waiver that will allow Baghdad to continue importing Iranian natural gas to fuel its electricity needs, the AP reported.

The three-month waiver is set to expire Thursday.

Iraq relies on Iranian imports to meet the lion’s share of its electricity needs in the face of shortages that have helped provoke widespread protests in recent years.

Click here to read the full article.

(Picture credit: Tasnim, under Creative Commons licence)

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund. This article was originally published by the London School of Economics (LSE).

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Demands for the expulsion of US troops following the killing of Iranian general Qassem Soleimani, have scaled down considerably since the initial strident calls. What started as high theatrics in parliament demanding an end to US presence, ended with a typical Iraqi fudge in that parliament passed a resolution requiring the government to cancel the request for global coalition support made in 2014, and for it to work towards ending the presence of all foreign troops.

These were further rolled back as reports emerged that the government’s vision of implementing the withdrawal of foreign forces was for the withdrawal of combat forces only and did not include those conducting training and logistical support. Threats of US sanctions have undoubtedly played a role in deflating the illusions of power, especially by those in the axis of resistance, and contributed to this climbdown.

Iraq’s economy is not only vulnerable to US sanctions, but to any disengagement from the US dollar-based global financial and economic system. In fact, the US could affect far worse damage to Iraq than it did to Iran without the need to implement sanctions, let alone sanctions that would ‘make Iranian sanctions seem somewhat tame’. This vulnerability stems from the failures of successive Iraqi administrations from 2003 to reconstruct the country following decades of conflict, or to create the foundations for a diversified economy driven by the private sector, and not by the state.

Instead, successive administrations have deepened the country’s dependence on oil, pursued policies that fostered a structural imbalance between the government’s current and investment expenditures, in which the public sector consumed an ever-increasing share of government revenues. The sole dependence on oil income for these revenues, and the dreadful twins of a dominant public sector and stunted private sector, are the primary reasons why the country is vulnerable to external shocks.[1]

The extent of the damage to the Iraqi economy would depend on the three broad categories of a US response to a hostile Iraq. The first category would be the imposition of primary US sanctions, and secondary sanctions on non-US entities that conduct commercial or financial dealings with Iraq. Their effects would be along the lines to those suffered by Iran due to the imposition in 2018 of similar US sanctions.

For Iran, these included a major drop in oil exports, a severe economic contraction, a significant drop in the value of the currency, a substantial rise in inflation, a lowering of living standards, and a rise in unemployment especially among the youth and the most vulnerable segments of society.

However, the consequences for Iraq would be on a much worse scale than those suffered by Iran. Firstly, because oil exports constitute the bulk of the Iraqi budget’s revenues (about 90 percent of the 2019 budget) unlike those for Iran’s budget (about 30 percent of its fiscal 2019–20 budget). The loss of this income for Iraq would severely restrict the government’s ability to pay for salaries and pensions, social security, goods and services, in addition to reducing any funds available for the reconstruction of the country, the development of its oil sector or the development of its power generation.

Secondly, Iraq depends almost completely on imports for its consumption of goods and services, unlike Iran which has a well-diversified economy, and a more developed industrial, agricultural and financial sectors. Iraq’s small industrial and agricultural sectors cannot meet even a small percentage of its domestic demand, while its under-developed financial sector cannot provide the financing for the development of these two sectors.

Thirdly, Iraq’s cash-reliant economy depends on access to physical USD notes for it to function. Such a disruption in the supply of USD notes would raise the price of the USD against the IQD, and with it a rise in the value of imported goods. In 2015 the country felt some of these effects due to a restriction in the supply of USD notes from the US Federal Reserve as a result of the US Treasury’s concerns that sanctioned entities (Iran & Daesh) had access to these notes. Any effects of a sizeable loss of access to USD notes would be significantly worse than in 2015. Making things worse is that Iraq cannot access USD notes from a third country, unlike Iran, whose need for notes is met through Iraq.

The second category of US responses would be the loss of waivers for the purchase of Iranian gas, which presents Iraq with a Sophie’s choice. Continue with the purchase of Iranian gas and suffer the consequences of US secondary sanctions, which would be only marginally less painful than any possible imposition of full sanctions, discussed earlier. Or, discontinue buying Iranian gas, lose about a third of Iraq’s domestic power supply and enrage a population that is already incensed over a chronic inadequate supply of power.

A less discussed point is that these waivers were granted on the conditions that Iraq develops a credible plan to reduce its dependence on Iranian gas, and in the long term end those imports. The US could still grant these waivers, but impose more stringent conditions on plans to reduce dependence and a tougher monitoring regime with associated penalties for failures in making progress.

The third category, and the most likely US reaction, would be to gradually end its treatment of Iraq as a close ally and therefore subject to increased US treasury scrutiny its financial system, which would negatively affect the functioning of the Iraqi Central Bank and the banking system. The most obvious result would be a disruption of Iraq’s cash-heavy economy, which relies on the access of physical USD notes for the conduct of commercial and financial transactions as discussed earlier.

Unlike the fictional Duchy of Grand Fenwick, in Leonard Wibberley’s satirical cold war novel The Mouse That Roared, Iraq cannot expect any sort of victory from a conflict or strained relationship with the US.

[1] An upcoming piece by the author examines the structural imbalances in the economy as a inevitable consequence of successive post-2003 political system, i.e, the “Muhasasa Ta’ifia”. This imbalance was first explored in: https://auis.edu.krd/iris/latest-iris-publications/iraqs-investment-spending-deficit-analysis-chronic-failures and subsequently in a series of tweets: https://twitter.com/AMTabaqchali/status/1181559159453564928?s=20 and https://twitter.com/AMTabaqchali/status/1182253543144771584?s=20

 

By John Lee.

The head of Trade Bank of Iraq (TBI) has reportedly said that the bank would stop processing payments for Iranian gas imports if a US sanctions exemption expires next month.

Faisal al-Haimus told AFP:

“As a bank, the most important thing we have is that we are compliant (with international regulations). That’s why people trust us.”

Iraq relies heavily on Iran to support its struggling electricity sector.

When the United States imposed sanctions on Iran’s energy sector in 2018, it granted Iraq a series of temporary waivers to allow it to buy gas from Iran.

More here.

(Source: AFP)

By Bryant Harris for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Senate Armed Services Chairman Inhofe endorses Iraq sanctions

The Donald Trump administration is doubling down on its Iraq pressure campaign, threatening to impose devastating sanctions on the fragile country should Baghdad move forward with its threats to expel US forces.

And the policy has buy-in from key Republican lawmakers, who are in no hurry to push back against the president’s sanctions threats.

Click here to read the full article.

By Bryant Harris for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Senate Armed Services Chairman Inhofe endorses Iraq sanctions

The Donald Trump administration is doubling down on its Iraq pressure campaign, threatening to impose devastating sanctions on the fragile country should Baghdad move forward with its threats to expel US forces.

And the policy has buy-in from key Republican lawmakers, who are in no hurry to push back against the president’s sanctions threats.

Click here to read the full article.

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

US President Donald Trump ratcheted up his rhetoric with Iran and Iraq late on Sunday, warning of a “major retaliation” if Iran strikes back to avenge the US assassination of one of its top military commanders and threatening sanctions on Iraq after its parliament called on American troops to leave the country.

Asked on Air Force One about potential retaliation by Iran, Trump said: “If it happens, it happens. If they do anything, there will be major retaliation.”

Al Jazeera’s Gabriel Elizondo reports live from Washington, DC:

By James Risen, for The Intercept.

Massive, sustained protests in Baghdad and Tehran that have been met with violent responses from security forces throughout the fall and winter have rapidly altered the political dynamics in both Iraq and Iran.

But it is still uncertain whether the grassroots anger that has erupted will lead to significant change in either country — or whether the United States will play a role in shaping the outcome.

More here.

(Source: The Intercept)

By James Risen, for The Intercept.

Massive, sustained protests in Baghdad and Tehran that have been met with violent responses from security forces throughout the fall and winter have rapidly altered the political dynamics in both Iraq and Iran.

But it is still uncertain whether the grassroots anger that has erupted will lead to significant change in either country — or whether the United States will play a role in shaping the outcome.

More here.

(Source: The Intercept)