U.S. Treasury Sanctions ‘Large-Scale’ Iran Counterfeiting Ring

The Trump administration on Monday imposed sanctions on what the Treasury Department describes as a “large-scale” Iranian counterfeiting ring that it says is run by the Islamic Revolutionary Guard Corps and potentially worth hundreds of millions of dollars, The Wall Street Journal reports.

The action against the network affiliated with the IRGC, an elite military wing that has taken over swaths of the Iranian economy, is part of a broader strategy by the administration of President Donald Trump to escalate sanctions pressure on Tehran.  It is also are likely to bolster Washington’s case in Europe for governments to strengthen their own sanction regimes against Tehran amid growing tensions with allies over the Trump administration’s criticism of the 2015 nuclear deal with Iran.

The network used deceptive means to bypass European export-control restrictions, buying advanced equipment and materials to print counterfeit Yemeni bank notes potentially worth hundreds of millions of dollars for the IRGC and the group’s overseas branch, the Quds Force.

“This scheme exposes the deep levels of deception the IRGC-Quds Force is willing to employ against companies in Europe, governments in the Gulf, and the rest of the world to support its destabilizing activities. Counterfeiting strikes at the heart of the international financial system, and the fact that elements of the government of Iran are involved in this behavior is completely unacceptable,“ Treasury Secretary Steven Mnuchin said.

Officials at Iran’s United Nations mission didn’t respond to a request for comment.

As the U.S. considers upending a 2015 nuclear deal it criticizes as ineffectual, the administration is ramping up punitive actions outside the scope of the agreement. It is targeting the IRGC in particular, trying to loosen the group’s grip on power in the Persian nation, and is pressing its European allies to similarly squeeze Tehran.

“This counterfeiting scheme exposes the serious risks faced by anyone doing business with Iran, as the IRGC continues to obscure its involvement in Iran’s economy and hide behind the facade of legitimate businesses to perpetrate its nefarious objectives,” Mnuchin said.

In sanctioning two individuals and four companies, Treasury said IRGC-linked agents used two German front companies to buy printing presses, specialty inks, watermarked paper and  counterfeit Yemeni currency to benefit Iran, including Iranian national Reza Heidari and Mahmoud Seif, whose nationality was not given, according to a statement.

The U.S. Treasury said the pair allegedly used the companies – ForEnt Technik and Printing Trading Center in Frankfurt, and Rayan Printing and Tejarat Almas Mobin Holding in Tehran – to evade European export restrictions while procuring equipment used to print fake Yemeni currency potentially worth hundreds of millions of U.S. dollars.

Under the 2015 nuclear deal, the Obama administration agreed to lift sanctions against Iran in exchange for Tehran putting the brakes on its nuclear program. The U.S.’s European allies are worried that a decision by the Trump administration to tear up the agreement could lead not only to Iran returning to nuclear-weapons development but also to a military confrontation.

Amid those tensions, the administration began to step up pressure on Tehran outside the tenets of the nuclear deal as an essential element of its new Iran policy. Beyond the Trump administration’s concerns about the ability of that deal to constrain Iran’s ability to develop a nuclear weapons program, Washington is increasingly worried about Tehran’s broader activities in the region and around the world.

Trump administration officials have pointed to an acceleration in the country’s ballistic missile program, Tehran’s involvement in Syria’s civil war, support for groups designated by the U.S. as terrorists, including Hezbollah in Lebanon, the Houthis in Yemen, and Iran’s arms links to North Korea.

Those points underscore the Trump administration’s arguments in European capitals for a more stringent sanctions regime. And they are likely to continue to restrain European investment in Iran given how deeply the IRCG is enmeshed into the Iranian economy and the Trump administration’s warning against business dealings with Iran, former administration officials and analysts say.

“This designation should serve as a warning to European banks, businesses, and political elites. Washington is serious about combating Tehran’s nonnuclear threats with nonnuclear sanctions,” said Behnam Ben Taleblu, a senior Iran analyst at the Washington-based Foundation for the Defense of Democracies. Many European banks and businesses have been wary of investing in Iran with the potential threat of new U.S. sanctions, those officials said.