US sanctions German firms in Iran-linked scheme

The US Treasury on Monday announced a new set of sanctions linked to a counterfeit Yemeni currency scheme allegedly involving Iran's elite Quds Force of the Islamic Revolutionary Guard Corps (IRGC).

The scheme produced Yemeni banks "potentially worth hundreds of millions of dollars" for the IRCGC's Quds Force operating in the country, which has witnessed a devastating civil conflict involving regional actors, including a Saudi Arabia-led coalition.

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Two German firms were also hit by the sanctions and the assets freeze: one for being "owned or controlled" by Reza H., the leading suspect in the scheme, and another for "having acted for or on behalf" of him.

The two German companies were used as "front companies to deceive European suppliers, circumvent export restrictions, and acquire advanced printing machinery, security printing machinery, and raw materials" in support of the counterfeit currency scheme.

'Nefarious objectives'

US Treasury Secretary Steven Mnuchin said the scheme struck at the "heart of the international financial system," showing how elements of the Iranian government undermine international norms aimed at safeguarding financial systems.

"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," Mnuchin said.

"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."

Since US President Donald Trump assumed office in January, the White House has pursued an aggressive strategy on Iran. In October, Trump refused to certify the nuclear deal, which provided sanctions relief in exchange for Tehran dropping its nuclear program.

The White House has since launched a new sanctions regime targeting the IRGC, labeling it a "supporter of terrorism" for backing the Quds Force, which also conducts operations outside the Islamic republic.