Mr. Sanctions

Category: Iran

  • December 16, 2025: OFAC Settles with Exodus Movement

    What Happened

    Exodus Movement, Inc. (“Exodus”), a U.S. company that makes software wallets for digital assets, has agreed to pay $3,103,360 to settle potential violations of U.S. sanctions against Iran.

    Between October 2017 and January 2019, Exodus allowed users in Iran to use its software to manage and trade digital currency. While Exodus didn’t process the trades itself (it used third-party partners), it earned fees from the transactions.

    The main issue was that Exodus staff knew some users were in Iran—a sanctioned country—but helped them anyway. When Exodus’s partners blocked these users to comply with the law, Exodus customer support told the users to use a VPN (Virtual Private Network) to hide their location and bypass the blocks. All of this happened even though Exodus’s own rules said people in sanctioned countries couldn’t use the app, but the company didn’t have a real system in place to check or stop them.

    The Penalty

    Exodus agreed to pay $3,103,360 to resolve the matter. The total maximum possible penalty was much higher, but the final amount was reduced because Exodus cooperated and fixed the problems.

    Breakdown of Violations

    There were 254 total violations, split into two types:

    • 12 Egregious Violations: These were the most serious cases where staff actively helped users evade sanctions. The base penalty for these was calculated at the legal maximum, totaling $4,532,400.
    • 242 Non-Egregious Violations: These were the standard transaction violations where users in Iran simply used the wallet without specific evasion advice.

    Aggravating and Mitigating Factors

    OFAC determined the final penalty by weighing “Aggravating Factors” (bad behavior that raises the fine) against “Mitigating Factors” (good behavior that lowers the fine).

    Aggravating Factors

    • Helping users trick the system
      • General Factor A: Willful or Reckless Violation of Law
      • Exodus staff knew their partners had blocked Iranian users for legal reasons but willfully advised those customers to use VPNs to get around the security controls.
    • Management knew about the risks
      • General Factor A: Awareness of Conduct
      • Company leadership and staff were generally aware of U.S. sanctions and knew that their partners were restricting access to Iran, but they continued to support these users anyway.
    • Undermining the purpose of sanctions
      • General Factor D: Harm to Sanctions Objectives
      • By helping people in a sanctioned country trade digital assets, Exodus defeated the purpose of the sanctions (which is to block access to the U.S. financial system) and sabotaged the compliance work of its partners.

    Mitigating Factors

    • Clean track record
      • General Factor B: Administrative License; Prior Notice of Penalty or Penalty
      • Exodus has not received a penalty notice or a finding of violation from OFAC in the five years preceding the earliest date of the transactions.
    • Fixing the compliance program
      • General Factor F: Remedial Response
      • Exodus took serious steps to prevent this from happening again, including installing software to block users from sanctioned regions (geo-blocking) and training its staff on compliance rules.
    • Cooperating with investigators
      • General Factor G: Cooperation with OFAC
      • Exodus worked closely with OFAC during the investigation, providing documents and information that helped resolve the case efficiently.

    What are the Takeaways?

    Compliance Considerations

    • Start Early: Companies, especially startups in fintech and crypto, must build sanctions compliance into their business model from day one, not wait until they are large.
    • Don’t Help Evasion: Customer support staff should never advise users on how to bypass security controls (like suggesting VPNs). This is considered a willful violation.
    • Technology Matters: Simply having “Terms of Use” that ban sanctioned users is not enough; companies need technical controls (like IP blocking) to actually stop them.
    • Check Your Partners: If you rely on other companies (like exchanges) to provide services, ensure your compliance standards match theirs so you don’t become a loophole.

    Other resources

    For more information on how to set up a proper compliance program, OFAC recommends reviewing:

    • A Framework for OFAC Compliance Commitments: A guide on the five essential parts of a sanctions compliance program.
    • Sanctions Compliance Guidance for the Virtual Currency Industry: Specific instructions for crypto companies on how to follow U.S. sanctions laws.

    Mr. Sanctions’ Note: This settlement required some tweaking of the prompt I use to produce these summaries for the non-expert. This was for two reasons:

    • The fact that there were both egregious and non-egregious violations caused the original prompt to treat everything as non-egregious. As revised, the summary now shows the effect on the base penalty of those egregious items.
    • Probably at least partly due to the previous point, the aggravating factors list included two separate, but related, items: willful behavior in the case of the egregious violations, and reckless behavior with regard to the rest.

    Even with this, Gemini missed the (admittedly minor) mitigating factor of not having a recent enforcement history. Luckily, when I told it that it had missed it and that it should be added back, it did so.

    BTW, here are the Enforcement Release:

    20251216_exodusDownload

    and the Settlement Agreement (which you get pretty rarely – generally only when there is egregious conduct):

    20251216_exodus_settlementDownload

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  • December 18, 2025: OFAC issues Iran-related and ICC-releated GLs

    From the OFAC Notice today:

    The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing International Criminal Court-related General License 11, “Authorizing the Wind Down of Transactions Involving Certain Persons Blocked on December 18, 2025;” and Iran-related General License S, “Authorizing Limited Safety and Environmental Transactions and the Offloading of Cargo Involving Certain Persons or Vessels Blocked on December 18, 2025.”

    and here is the ICC-related one:

    icc_gl11Download

    and the Iran-related one:

    iran_glsDownload

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  • Another way to skin the cat: Canada reminds businesses of the recent Iranian designations

    Government of Canada announces new sanctions under the Special Economic Measures (Iran) Regulations

    Further to Global Affair Canada’s news release, December 15, 2025, this message serves as a reminder that businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) must report completed or attempted financial transactions to FINTRAC when there are reasonable grounds to suspect that the transaction is related to a money laundering, terrorist financing or sanctions evasion offence.

    Additionally, businesses subject to the PCMLTFA must update their processes to include these newly listed entities, review any past transactions and consider the need to report to FINTRAC, as required.

    Canada is imposing additional sanctions against 4 Iranian senior officials who have been involved in gross and systematic human rights violations in the Islamic Republic of Iran (Iran) and have had a significant role in facilitating and directing repressive policies.

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  • December 17, 2025: OFSI modifies 4 sanctions programs

    Email notice from UK Government:

    Today, 17 December, the UK government has delisted the following 1 individual and 2 entities from the Syria sanctions regime, and one individual from the Syria sanctions regime and Iran Nuclear sanctions regime.

    Please note that these delistings remove duplicative designations. All four will remain listed under one of the following regimes: the Iran sanctions regime, the Iran Nuclear sanctions regime, or the Chemical Weapons sanctions regime. Therefore, there is no change in their status as designated persons.

    Delisting:

    Name:Old Unique ID (Delisted):OFSI Group ID:Unique ID:
     Hossein TAEB SYR008911788IRN0039
    Mohammad Ali JAFARI SYR0161 and INU0011 10638IRN0058
    ISLAMIC REVOLUTIONARY GUARDS CORPS – QODS FORCESYR0310  11241INU0082
    SCIENTIFIC STUDIES AND RESEARCH CENTRE (SSRC)SYR0286  12426CHW0006

    However, this update shows a weakness of the OFSI notice format. None of the notices have revocation/delisting/removal sections; because each designated party is represented by one listing that doesn’t explicitly say which programs it’s listed under (like OFAC’s program tags), if a party is designated under two programs, and is removed from one, it appears in the OFSI Notices as an amended listed, not a revoked one.

    For example, the Syria Notice summary says:

    4. The following entries have been removed from the Syria regime, however they remain

    subject to an asset freeze under different regimes:

    Remaining subject to sanctions under the Iran regime:

    • Mohammad Ali JAFARI (Group ID: 10638)

    • Hossein TAEB (Group ID: 11788)

    1Remaining subject to sanctions under the Iran (Nuclear) regime:

    • ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC) QODS FORCE (Group ID: 11241)

    Remaining subject to sanctions under the Chemical Weapons regime:

    • SCIENTIFIC STUDIES AND RESEARCH CENTRE (SSRC) (Group ID: 12426)

    But the Annex lists all four parties under an Amendments section. For example:

    SCIENTIFIC STUDIES AND RESEARCH CENTRE (SSRC)

    a.k.a: (1) Center for Scientific Studies and Research (SSRC) (2) Center for Study and

    Research (CERS) (3) Centre de Recherche de Kaboun (4) Centre d’Etude et de Recherche

    Scientifique (CERS) (5) Scientific Research Council (SRC) (6) Scientific Studies and

    Research Council (7) Syrian Scientific Research Council (SSRC) Address: (1) P.O. Box

    31983, Barzeh. (2) Barzeh Street, PO Box 4470, Damascus, Syria. Other Information: (UK

    Sanctions List Ref): CHW0006 and SYR0286. Listed under the Chemical Weapons and

    Syria sanctions regimes. (UK Statement of Reasons): There are reasonable grounds to

    suspect that they are an involved person under the Syria (Sanctions) (EU Exit) Regulations

    2019 because they are or have been involved in activities carried out on behalf of the

    Assad regime, implementing, or connected to the repressive policies of that regime. In

    particular, carrying on prohibited activities related to chemical weapons in Syria. The

    Scientific Studies and Research Center (SSRC) is the Syrian regime’s principal entity for

    the development of chemical weapons. The SSRC is responsible for the development

    and production of chemical weapons, as well as the missiles and artillery to deliver them,

    operating at a number of sites in Syria. (Phone number): Telephone: 6668114/5 Telefax:

    6620317 (Type of entity): Investment. Private (Subsidiaries): Bena Properties (subsidiary),

    Cham Holding Building, Daraa Highway, Ashrafiyat Sahnaya Rif Dimashq, Syria, P.O. Box

    59525. Higher Institute for Applied Sciences and Technology. HISAT. National Standards

    & Calibration Laboratory. NSCL Listed on: 21/01/2019 UK Sanctions List Date

    Designated: 31/12/2020 Last Updated: 25/04/2025 17/12/2025 Group ID: 12426.

    Iran Notice

    Iran (Nuclear) Notice

    Chemical Weapons Notice

    Syria Notice

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  • December 15, 2025: Canada adds 4 to Iran sanctions

    Today’s Backgrounder and news release , as well as a summarized version of Global Affairs Canada’s Iran sanctions page:

    Here is a summary of the new sanctions announced by the Canadian government, followed by an overview of Canada’s broader sanctions against Iran.

    New Sanctions Announced Against Iranian Officials

    Date: December 15, 2025

    The Canadian government, led by Minister of Foreign Affairs Anita Anand, has announced new sanctions against four senior Iranian officials. These measures are a direct response to the Iranian government’s ongoing human rights abuses, specifically its violent crackdown on protests and the repression of its own citizens.

    The government cited the “gross and systematic” violation of human rights in Iran, noting that security forces—including the Islamic Revolutionary Guard Corps (IRGC)—have used lethal force to silence dissent. This marks the 20th round of sanctions Canada has imposed since October 2022 to pressure the Iranian regime.

    What do these sanctions do?

    The new rules impose a “dealings ban” on these four individuals. In simple terms:

    • Asset Freeze: Any money, property, or assets these individuals have in Canada are frozen.
    • Business Ban: People in Canada (and Canadians around the world) are forbidden from doing business with them, selling them goods, or providing them with financial services.
    • Travel Ban: These individuals are banned from entering Canada.

    Who is being sanctioned?

    The four individuals targeted are senior officials accused of directing repressive policies or managing abusive prison systems:

    1. Mohsen Karimi: A Brigadier General and the Commander of the Ruhollah Corps of the Islamic Revolutionary Guard Corps (IRGC).
    2. Ahmad Kadem Seyedoshohada: A Brigadier General and the Commander of the Karbala Operational Base of the IRGC.
    3. Mustafa Mohebbi: The former Head of the State Prison Organization in Tehran Province.
    4. Hassan Akharian: The Head of Ward 5 and solitary confinement at the Rajaei Shahr Prison, a facility notorious for human rights abuses.

    Canada sanctions Related to Iran

    An overview of Canada’s restrictions on Iran.

    Canada maintains a strict set of rules (sanctions) regarding Iran to address two main concerns: Iran’s nuclear and weapons programs, and its human rights violations. These rules come from both the United Nations (UN) and Canada’s own domestic laws.

    1. Bans on Trade (Imports and Exports)

    Canada strictly forbids trading certain goods with Iran.

    • Nuclear & Weapons Tech: Companies cannot sell or send any technology, materials, or equipment that could be used for nuclear programs, ballistic missiles, or other weapons systems.
    • Military Gear: There is a complete ban on selling arms and military equipment to Iran.
    • Sensitive Goods: Canada has a specific list of goods (like certain chemicals or high-tech machinery) that cannot be exported to Iran because they might be used for military or nuclear purposes.

    2. Financial Restrictions

    • No Investing: Canadians are generally prohibited from investing in Iran’s nuclear industry.
    • No Financial Services: Canadian banks and financial institutions cannot provide services that would help Iran develop nuclear weapons or delivery systems.

    3. Targeted Sanctions on People and Companies

    Canada keeps a specific list of Iranian individuals and organizations known as “Designated Persons.”

    • Frozen Assets: Anyone on this list has their Canadian assets frozen.
    • No Deals: It is illegal for Canadians to buy from, sell to, or handle money for anyone on this list.
    • Recent “Snapback”: In late 2025, following a move by France, Germany, and the UK, the UN reimposed older, stricter sanctions (a mechanism called “snapback”) because Iran failed to meet its nuclear agreements. Canada has updated its own rules to match these stricter UN requirements.

    4. Exceptions

    There are minor exceptions for humanitarian reasons, such as sending food, medicine, or medical supplies to Iran, provided they don’t fall under the restricted categories.

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  • December 12, 2025: Updates to Australia’s Consolidated List

    Notice of Changes to the Consolidated List – 12 December 2025

    DFAT updated the Consolidated List on 12 December 2025 pursuant to the below changes:

    • The addition of 43 persons and 78 entities for targeted financial sanctions and travel bans pursuant to Charter of the United Nations (Sanctions—Iran) Regulations 2025 commencing on 12 December 2025;
    • The removal of one person following receipt of the attached advice from the United Nations Security Council Committee established pursuant to Resolutions 1518 (2003) concerning Iraq and Kuwait; and
    • administrative updates to standardise and improve the presentation of data in the Consolidated List.

    The updated Consolidated List can be downloaded from the following page: Consolidated List | Australian Government Department of Foreign Affairs and Trade

    If you have any queries, please contact the Australian Sanctions Office atsanctions@dfat.gov.au.  

    Australian Sanctions Office

    _______________________________

    Australian Sanctions Office | Regulatory and Legal Policy Division

    Department of Foreign Affairs and Trade

    dfat.gov.au | X | Facebook | Instagram | LinkedIn

    © Brooke Rigney-Lively (2024)

    We acknowledge the Traditional Custodians of Country throughout Australia, and their continuing connection to land, waters and community. We pay our respects to all First Nations peoples, their cultures and to their Elders, past, present and emerging.

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  • Burning Questions: Was that oil tanker seizure legal?

    So, I wanted to see what Gemini thought of yesterday’s activities… So I asked (notice the guardrails):

    Assuming all the allegations by the US Department of Defense and the Trump Administration are true, given all the published, in-force regulation, guidance, legislation and Frequently-Asked Questions, etc. published by the US government in relation to Venezuela and Iran, was yesterday’s seizure of an oil tanker off the coast of Venezuela legal? Justify your decision and produce sources from US government websites.

    and this is what I got back:

    Based on the reports of the seizure of the oil tanker “The Skipper” (formerly Adisa) on December 10, 2025, and assuming all allegations by the Department of Defense and the Trump Administration are true, the seizure is legal under United States law.

    The legality is grounded in a combination of Executive Orders (sanctions), federal statutes (forfeiture and anti-terrorism), and judicial process (seizure warrant).1

    Legal Justification

    1. Violation of Sanctions & Material Support to Terrorism2

    The US government alleges the tanker was transporting oil from Venezuela and Iran and supporting the Islamic Revolutionary Guard Corps (IRGC), which is designated as a Foreign Terrorist Organization (FTO).3

    • Iran Sanctions: Under the International Emergency Economic Powers Act (IEEPA) and Executive Order 13224 (Counter Terrorism), the US prohibits transactions that provide material support to designated terrorist organizations (like the IRGC).4 The transport of Iranian oil is considered a mechanism for funding the IRGC’s Qods Force.
    • Venezuela Sanctions: Executive Order 13850 and Executive Order 13884 block the property of Petróleos de Venezuela, S.A. (PdVSA) and prohibit US persons or those within US jurisdiction from dealing in Venezuelan oil.
    • Secondary Sanctions: Even for non-US ships, providing “material support” or goods/services to a designated FTO or sanctioned entity can trigger US jurisdiction under extraterritorial sanctions provisions.

    2. Civil Forfeiture Authority

    The seizure was reportedly conducted pursuant to a seizure warrant issued by a US federal court.

    • 18 U.S.C. § 981(a)(1)(C) and (G): These statutes authorize the civil forfeiture of any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of IEEPA, or assets of any foreign terrorist organization engaged in planning or perpetrating acts of terrorism against the US.
    • Because the oil and the vessel constitute “property” used to facilitate these violations or are proceeds of the violations, they are subject to forfeiture to the US government.

    3. Maritime Law Enforcement

    • 14 U.S.C. § 522: This statute grants the US Coast Guard (which participated in the operation) the authority to make inquiries, examinations, inspections, searches, seizures, and arrests upon the high seas and waters over which the United States has jurisdiction, for the prevention, detection, and suppression of violations of laws of the United States.
    • Jurisdiction over the Vessel: While the vessel was reportedly “off the coast of Venezuela” (likely international waters), the US often establishes jurisdiction if:
      • The vessel is stateless (not properly registered).
      • The flag state (in this case, reportedly Guyana) consents to the US boarding and seizure.
      • The vessel is deemed “property” subject to a US court’s forfeiture warrant.

    Sources from US Government Websites

    • Authority for Sanctions (Iran & Counter-Terrorism):
    • Authority for Sanctions (Venezuela):
    • Forfeiture and Seizure Authority:
      • Asset Forfeiture Program (Department of Justice): Explains the use of forfeiture to disrupt criminal activity, including terrorist financing. Justice.gov – Asset Forfeiture Program
      • (Precedent) 2020 Seizure of Iranian Fuel: The Department of Justice previously successfully executed similar seizure warrants for Iranian fuel bound for Venezuela aboard the vessels Bella, Bering, Pandi, and Luna, citing the same legal authorities (IEEPA, forfeiture for FTO support).5 Justice.gov – 2020 Press Release

    And the list of sources included The Washington Post, the U.S. Department of Justice website, Al Jazeera and Wikipedia (for what that’s worth)…

    Would welcome someone more expert than me, and with no axe to grind, giving their opinion

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