On March 26, 2025, the United States has initiated a civil forfeiture action in the U.S. District Court for the District of Columbia, seeking to seize $47 million in proceeds from the sale of nearly one million barrels of Iranian oil. The complaint alleges that these funds are linked to the Islamic Revolutionary Guard Corps (IRGC) and its Qods Force (IRGC-QF), both designated as Foreign Terrorist Organizations (FTOs).
Scheme to Evade Sanctions
According to the complaint, between 2022 and 2024, a network of facilitators orchestrated a scheme to disguise Iranian petroleum as Malaysian, enabling its shipment, storage, and sale. This was allegedly done for the benefit of the IRGC and IRGC-QF. The scheme involved:
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AIS Manipulation: The tanker’s automatic identification system (AIS) was altered to hide its true origin from Iran.
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Falsified Documentation: The oil was falsely declared as Malaysian when presented to a Croatian port and storage facility.
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U.S. Financial Transactions: Payments for storage fees were made in U.S. dollars through American financial institutions, which would have blocked the transactions had they known the oil was Iranian.
The petroleum was ultimately sold in 2024, and the U.S. authorities seized the $47 million in proceeds.
Iranian Oil Revenues and Terrorism Financing
The complaint asserts that the petroleum belonged to the National Iranian Oil Company (NIOC), which has been accused of funding terrorism by providing material support to the IRGC and IRGC-QF. The proceeds from Iranian oil sales allegedly finance a range of destabilizing activities, including:
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The proliferation of weapons of mass destruction (WMDs) and their delivery systems.
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Support for terrorist organizations and militant groups.
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Domestic and international human rights violations.
Potential Compensation for U.S. Victims of Terrorism
Under U.S. law, funds successfully forfeited from entities linked to state-sponsored terrorism may be allocated, in part or in full, to the U.S. Victims of State Sponsored Terrorism Fund. This initiative compensates American victims of attacks carried out by groups backed by designated state sponsors of terrorism, including Iran.
This latest enforcement action underscores U.S. efforts to disrupt Iran’s illicit oil trade, which continues to serve as a major source of revenue for sanctioned entities.
