EU To Impose 'Very Tough' Sanctions On Tehran, Borrell Says

In recognition of International Anti-Corruption Day and Human Rights Day, the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a diverse array of over 40 individuals and entities connected to corruption or human rights abuse.

“Corrupt actors and human rights abusers both rely on deficiencies in the international financial system to perpetrate their activities,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.

The new sanctions targeted Ali Akbar Javidan, the head of Law Enforcement Forces in Iran’s Kermanshah province who has direct oversight over forces that have killed protesters, including children and the elderly. Another blacklisted official is Ebrahim Kouchakzaei (Kouchakzai), the police commander in Chabahar, in the Sistan and Baluchistan province, the alleged perpetrator of a mid-September 2022 rape of a 15-year-old girl. Allah-Karam Azizi, the warden of Iran’s notorious Rejaee Shahr Prison is also among the officials designated in the latest measure.

The Treasury said that since September, when the protests ignited by the death in custody of Mahsa Amini, it has issued five rounds of sanctions targeting the Morality Police, a range of Iranian security and government officials involved in the use of violence against Iranian protestors, prison officials involved in the detention of protestors, Iranian media officials associated with broadcasts of coerced confessions relating to the protests, and officials responsible for shutting down Iran’s Internet to stifle freedom of expression online. 

The department accused Ayan of acting as a facilitator for oil sales and money laundering on behalf of Iran's Revolutionary Guard Corps.

Ayan's companies have established international sales contracts for Iranian oil, arranged shipments and helped launder the proceeds and obscured the origin of the Iranian oil on behalf of Iran's Quds Force, an arm of the IRGC, the Treasury said in a statement first reported by Reuters.

"Ayan has established business contracts to sell Iranian oil worth hundreds of millions of dollars to buyers," in China, the United Arab Emirates and Europe, the statement says, adding that he then funneled the proceeds back to the Quds Force.

Ayan's son Bahaddin Ayan, his associate Kasim Oztas and two other Turkish citizens involved in his business network are also designated, along with 26 companies including his ASB Group of Companies, a Gibraltar-based holding company and a vessel.

The Treasury action freezes any US assets of those designated and generally bars Americans from dealing with them. Those that engage in certain transactions with those designated also risk sanctions.

The US measures come at a time when ties between the United States and Turkey are strained over a host of issues, including disagreement over Syria policy and Ankara's purchase of Russian air defense systems.

Washington maintains sweeping sanctions on Iran and has looked for ways to increase pressure as efforts to resurrect a 2015 nuclear deal with Tehran have stalled.

In a statement issued on Friday, Foreign Minister Mélanie Joly announced that Canada is imposing additional sanctions under the Special Economic Measures (Iran) Regulations.

The additional sanctions target four individuals and five entities that Ottawa said were tied to Tehran's "systematic human rights violations" and actions that "threaten international peace and security."

“Despite the Iranian regime intensifying efforts to brutally repress demonstrations across the country, the people of Iran continue to stand up for the rights of Iranian women and girls, and a better future for all Iranians,” read the statement, adding that "Canada will not stand idly by while the regime’s human rights violations increase in scope and intensity against the Iranian people."

The new list included a Revolutionary Guard commander Morteza Talaei, who was also former Commander of Tehran’s police; Ali Ghanaatkar Mavardiani, a senior judge, prosecutor and interrogator of the regime who used to work in Evin Prison Court; and Hassan Karami, Commander of the Islamic Republic’s Law Enforcement Forces Special Units. 

The new blacklisted entities include Safiran Airport Services, a cargo and commercial airline that has coordinated military flights between Iran and Russia, sending lethal Iranian-made Unmanned Aerial Vehicles (UAVs) to Russia. Another is Baharestan Kish Company, a subsidiary firm of the IRGC Cooperative Foundation that has entered into agreements with the Basij paramilitary forces to develop Shahed-series UAV components. Canada also sanctioned Javan News Agency, a media outlet under the Basij that disseminates anti-Semitic messaging and the Iranian regime’s propaganda.

A move by administration of President Joe Biden to allow Chevron, the second biggest US oil company, to export Venezuelan oil followed talks beginning Saturday in Mexico between the government of President Nicolas Maduro and the opposition. Revenues currently frozen abroad will be ringfenced by the United Nations into ‘humanitarian spending.’

Battling high inflation, alongside food and medicine shortages, the Venezuelan government has said the “kidnapped” fund would go into helping stabilize the electric grid, improve education infrastructure, and improve the response to this year’s flooding. The UN will manage a fund for over $3 billion currently held by US and European banks fearful of punitive US measures.

But the decision has been criticized on several grounds. The Boston Herald in an editorial November 28 mocked Biden’s interest in “climate-destroying fossil fuels,” suggesting he was offering the Venezuelan government “a political reward” while appeasing US “eco-progressives” over US shale production, slowing as the release of US emergency reserves eases, while the December 5 deadline for tighter Russia sanctions looms.

An investigation by the Reuters news agency, in a feature published Wednesday, highlighted close links between Venezuela and Iran in cooperating to evade Washington’s eagle eye on oil transports. Reuters reported super-tanker Young Yong disguising Venezuelan oil as Malaysian oil. The vessel belongs to a company owned by a Ukrainian national also sanctioned, and is one of three tankers designated November 3 by the US for forging documents to ship Tehran’s oil and so evade US sanctions on Iran.

Gaining an economic windfall

Links between Caracas and Tehran partly explain those arguing against relaxing US pressure on Maduro government and that a double standard is at play. Eddy Acevedo, an advisor at the Wilson Centre, has argued that “both rogue regimes are looking to extract concessions in hopes of gaining an economic windfall.”

Iran and Venezuela in June signed a 20-year cooperation agreement, three years after President Donald Trump in 2019 ramped up sanctions against Venezuela after Maduro won the disputed 2018 election and four years after Trump launched ‘maximum pressure’ against Iran as he withdrew the US from the 2015 Iran nuclear agreement.

The Reuters report suggested Iran had “pioneered” the use of false documents to conceal the origins of cargoes. According to the news agency, around 200 tankers, including 82 super-tankers able to carry up to 2 million barrels, have been involved in servicing both Venezuela and Iran, with the south American country exporting over 360 million barrels in the face on US sanctions since 2019.

‘Smart’ sanctions?

Documentation in the Young Yong case were supplied to Reuters by advocacy group United Against Nuclear Iran, which has since 2013 tracked Iran’s oil traffic to “disrupt…[its] attempts to generate profits from oil sales and further isolate the regime economically.”

So, what are the implications of the Venezuela decision for US Iran policy, when Biden still aims to reach diplomatic agreement to revive the 2015 nuclear agreement? Some analysts in Tehran have argued that Europe’s need for energy in the wake of sanctions against Russia, coupled with upward pressure on US gasoline prices, increased the likelihood of Washington meeting the Iranian demands of ‘guarantees’ that have reportedly stymied talks to revive the 2015 agreement, the JCPOA (Joint Comprehensive Plan of Action).

A decision to replace blanket sanctions on Venezuela with ‘smarter’ measures could create a precedent over Iran. As the Venezuela decision loomed earlier in the month, Reuters suggested the US was looking to replace hidden oil trade, a response to sanctions, with transparent transactions. But at the same time, Venezuela pumping more oil could reduce pressure on Biden to compromise with Iran.

Based on a statement by the United States Treasury Department’s Office of Foreign Assets Control, or OFAC, “due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran.”

Kraken is a cryptocurrency exchange and bank, founded in 2011. It is reportedly valued at $10.8 billion, as of mid-summer 2022.

As part of its settlement with OFAC, the company has also agreed to invest an additional $100,000 in certain sanctions compliance controls.

The settlement amount reflects OFAC’s determination that Kraken’s apparent violations were non-egregious and voluntarily self-disclosed.

“Between approximately October 14, 2015, and June 29, 2019, Kraken processed 826 transactions, totaling approximately $1,680,577.10, on behalf of individuals who appeared to have been located in Iran at the time of the transactions,” added the statement.

Washington imposed banking sanctions on the Islamic Republic after former president Donald Trump withdrew from the 2015 nuclear deal. However, Kraken had apparently been breaching these regulations since 2019 by permitting over 1,500 people in Iran to buy and sell crypto.

Last month, OFAC also fined Bittrex crypto company $24 million for letting clients in Cuba, Iran, Sudan, Syria and Russian-occupied Crimea to make transactions valued over $263 million.