OFAC (the Office of Foreign Assets Control) is the part of the U.S. Treasury Department that administers and enforces U.S. economic and trade sanctions. Being added to OFAC’s SDN List (Specially Designated Nationals and Blocked Persons List) means the U.S. has formally designated you as a sanctioned person: any property or interests in property you have that are in the United States or held by U.S. persons must be blocked (frozen), and U.S. persons are generally prohibited from providing you with funds, goods, or services. In practice, because banks and companies worldwide screen against the SDN List, being listed often cuts a person or company off from much of the global dollar-based financial system.
Executive Order (EO) 13553 (2010) allows the U.S. government to block the property of, and ban transactions with, Iranian officials and entities responsible for or complicit in serious human-rights abuses by the Government of Iran, as well as those who support them. EO 13876 (2019) targets Iran’s Supreme Leader, his office, and senior officials or entities acting on his behalf, authorizing asset freezes and sanctions on anyone who materially supports them. EO 13902 (2020) authorizes sanctions on persons operating in key sectors of Iran’s economy (initially construction, mining, manufacturing, and textiles, later expanded to the financial, petroleum, and petrochemical sectors) and on foreign financial institutions that knowingly conduct significant transactions for those sectors. These authorities are the legal basis Treasury cites in this press release to sanction the Iranian officials and shadow-banking networks described.
In this Treasury press release, a 'rahbar' company is described as an entrusted intermediary company that an Iranian bank establishes to manage its clients’ international transactions. Rahbar firms for banks like Bank Melli and Shahr Bank work with Iranian customers (for example, the national oil company) and use layers of foreign front companies and exchange houses in jurisdictions such as the UAE, Singapore, Hong Kong, and others to disguise payments that would otherwise be blocked by sanctions. Foreign buyers of Iranian oil or petrochemicals pay these front companies; the funds are then routed through multiple accounts, often backed by falsified invoices, so the payments appear to be ordinary trade, before being delivered back to sanctioned Iranian state entities and the IRGC. Treasury and FinCEN describe this as a parallel 'shadow banking' system that channels tens of billions of dollars in oil and petrochemical revenue through the formal financial system while concealing the involvement of sanctioned Iranian banks and military organizations.
Bank Melli Iran is Iran’s largest state-owned commercial bank and historically served as the country’s central bank; it remains one of the most important banks in Iran and has been subject to extensive U.S. and other sanctions. Shahr Bank (Bank-e Shahr) is an Iranian commercial bank that began operations in 2009, closely linked to municipal and urban development activities. In this Treasury action, both banks are central because they are already-sanctioned Iranian financial institutions whose rahbar-based shadow-banking networks are being targeted: Nikan Pezhvak and Empire International are identified as leading Bank Melli’s rahbar network, while HMS Trading and Tejarat Hermes Energy Qeshm are identified as key elements of Shahr Bank’s network. These networks allegedly move billions of dollars in oil and petrochemical revenue for Iranian state entities and the IRGC, so OFAC is designating the associated individuals and front companies to disrupt those flows.
Ali Larijani is a senior Iranian politician and regime insider. He has previously served as head of state television, secretary of the Supreme National Security Council (SNSC) from 2005 to 2007, and speaker of Iran’s parliament from 2008 to 2020. In 2025 he was again appointed secretary of the Supreme National Security Council and is described in this press release as coordinating the regime’s response to the current protests on behalf of the Supreme Leader. The Supreme National Security Council (also referred to here as the Supreme Council for National Security, SCNS) is Iran’s top national-security decision-making body, created by the constitution. Chaired by the president and including the heads of the legislative and judicial branches, senior military and security chiefs, and other key officials, it sets overall defense and security policy, coordinates foreign and military strategy, and historically oversaw nuclear negotiations; its major decisions must be approved by the Supreme Leader.
For foreign (non‑U.S.) businesses and banks, dealing with the designated entities can have serious practical and legal consequences:
Treasury’s Iran-related press releases emphasize that foreign financial institutions and other persons engaging in certain transactions with these designees may expose themselves to U.S. sanctions or enforcement actions.
A person or entity on the SDN List can seek removal through OFAC’s administrative 'delisting' process. Under 31 C.F.R. § 501.807, they submit a written petition to OFAC requesting reconsideration and explaining either that the original designation was based on mistaken identity or error, or that the circumstances justifying the designation have fundamentally changed (for example, they no longer engage in the sanctioned activity or no longer meet the criteria of the relevant executive order). OFAC reviews the petition, may ask for additional information, and then decides whether to keep, modify, or remove the listing. Treasury’s guidance and the State Department’s sanctions-delisting information note that removal is possible but depends on OFAC determining that the legal basis for designation no longer applies.