Reuters reported this week that Iran, since early last year, has been employing “a secret network of military agencies” around the world, with the ability to evade both the U.S. military blockade near the Strait of Hormuz and the sanctions against Iran.
The network has given Iran the ability to smuggle “hardware, explosives and heavy-duty trucks,” to the tune of about $2 billion, since the network launched in early 2025, the report said. More than 5,000 agencies exist as part of the network.
Iran Missiles. Image Credit: Creative Commons.
Iran Army Tank. Image Credit: Creative Commons.
Reuters obtained Iranian bank and government records showing the web of agencies. They all share the same address as the Ministry of Defense and Armed Forces Logistics and list their incorporation date as the day of the 1979 Iranian Revolution, although Reuters said most were actually founded in 2013.
According to Reuters’ reporting, the existence of this network answers the question of how Iran’s Islamic Revolutionary Guard Corps (IRGC) has been able to replenish its weapons stockpiles throughout the war.
Most of the agencies have code names that start with “MOD,” for Ministry of Defense, and one, MOD 346428, succeeded in importing “huge quantities of rocket propellants, explosives, and weapons components that are critical for making drones and missiles,” weapons that Iran has used in its war with the United States, including in its attacks on military bases of U.S. allies in the Middle East.
Reuters had reported earlier that Iran has embraced crypto and illegal gambling, among other strategies for avoiding sanctions enforcement.
How It Works
As reported by the news agency, the Iranian agencies “operate a web of frontmen and foreign shell companies, collectively known as trustees,” that engage in illegal oil sales and guy goods for the Iranian government.
And while the Iranian military has long been subject to sanctions, it doesn’t appear that most of the agencies are on any sanctioned lists, indicating that Western nations didn’t know about them.
Miad Maleki, a former senior official at the US Treasury Department and associate director of the Treasury’s Office of Foreign Assets Control who helped design the existing sanctions and how they work, told Reuters that “what you have here is the regime’s military lifeline during this conflict and for many years before.”
When Reuters checked import records, it found that most items were “exempt from duty and specifically marked as military equipment,” although much of it has been considered dual-use.
The Reuters report said mostly “frontmen in the diaspora” used cash held in foreign banks to buy the goods.
Other experts looked at the documents and agreed with Maleki.
“This looks like an industrial-scale effort to rebuild or expand Iran’s existing fleet” of weapons, Peter Salisbury, an adjunct assistant professor at Columbia University who has long researched sanctions on Iran.
The report said Iran got the materials through several routes, including by truck from parts of Central Asia, by cargo ship across the Caspian Sea, and by freight plane from China.
Noam Binstok, a senior analyst at 240 Analytics, the analysis firm that worked with Reuters on the reporting, described the smuggling operations as “the plumbing behind the Islamic Republic’s global sanctions evasion network and so much more.” Binstok, an economist, said in the story that he first noticed the entities while reviewing documents posted to Telegram and to a site called WikiIran.
The U.S. and China Respond
How did the U.S. government respond to Iran doing this, seemingly under the nose of the United States?
“While the regime may continue its desperate attempts to evade our powerful sanctions, fund its military and weapons programs, and access foreign currency, we are always 10 steps ahead,” a Treasury Department spokesperson told Reuters.
Iran’s government did not respond to Reuters’ requests for comment, nor did the White House. However, China’s government did.
The Chinese foreign ministry told Reuters it was “unaware of the situation you describe,” but it accused the news agency of “attempts to maliciously link regional hostilities to China or smear China’s reputation.”
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist, and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, national security, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
