US imposes sanctions on Moscow-backed Iranian oil smuggling network

Network has raised hundreds of millions of dollars for Quds Force and Hezbollah

The US Treasury building in Washington. Bloomberg
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The US on Wednesday imposed sanctions on what it described as a Russian-backed oil smuggling and money laundering network for Iran's Islamic Revolutionary Guard Corps Quds Force, even as Washington tries to revive the nuclear deal with Tehran.

The Treasury Department said the network is led by current and former Quds Force figures, “backed by senior levels of the Russian Federation government” and included Chinese companies and a former Afghan diplomat.

It had raised hundreds of millions of dollars for the Quds Force and Iran's Lebanese allies Hezbollah, and helped Tehran support proxy militant groups, the Treasury said.

Members of a special IRGC force attend a rally in Tehran, Iran. Wana via Reuters

The Quds Force is the foreign espionage and paramilitary arm of the IRGC and controls its allied militia abroad. The administration for former president Donald Trump put the guards on the US State Department list of Foreign Terrorist Organisations in 2019, the first time Washington had formally labelled another nation’s military as a terrorist group.

President Joe Biden's administration has been engaged in indirect talks to restart a 2015 deal Mr Trump abandoned, under which world powers lifted international financial sanctions on Tehran in return for curbs on its nuclear programme.

“While the United States continues to seek a mutual return to full implementation of the Joint Comprehensive Plan of Action [JCPOA], we will strictly enforce sanctions on Iran’s illicit oil trade,” US Secretary of State Antony Blinken said in a separate statement, referring to the nuclear deal.

The Iranian mission to the UN in New York and the Russian and Chinese embassies in Washington did not immediately respond to Reuters requests for comment.

While talks had appeared close to resurrecting the nuclear deal in March, they stalled over last-minute Russian demands and whether Washington might drop the IRGC from its terrorism list.

Washington's Iran envoy said on Wednesday that the chances of reviving the nuclear deal were shaky at best and that Washington was ready to tighten sanctions on Iran.

Wednesday's sanctions hit Russia-based RPP LLC, which the Treasury said was used to help transfer millions of dollars on behalf of the Quds Force, and Zamanoil DMCC, which Washington accused of working with the Russian government and state-owned Rosneft to ship Iranian oil to companies in Europe.

A former Afghan chargé d’affaires in Moscow was named in the sanctions, as were several people described as associates of the IRGC.

Among a number of China-based companies that were designated were Haokun Energy Group Company Limited and its Hong Kong subsidiary China Haokun Energy Limited. The Treasury accused China Haokun Energy Limited of purchasing millions of barrels of Iranian oil from the Quds Force.

Reuters was not immediately able to contact the designated companies.

Updated: May 25, 2022, 8:46 PM