U.S. Treasury cracks down on Russian shadow banking network funding Iran

The U.S. Treasury Department announced restrictions on Oct. 1 against the A7 Network, a Russian shadow banking system used by Iran to evade sanctions.

“Treasury is dismantling the financial infrastructure that allows Iran and other adversaries to evade sanctions, move illicit funds, and undermine the integrity of the global financial system,” U.S. Treasury Secretary Scott Bessent said in a press release. “Today’s action targeting A7 continues Treasury’s unprecedented efforts to isolate Iran and its financial enablers and sends a clear message that if you facilitate illicit finance for America’s adversaries, you will lose access to the U.S. financial system.”

Led by Ilan Mironovich Shor, a "sanctioned and convicted criminal fraudster," and Promsvyazbank, a state-owned Russian bank tied to the military, the A7 shadow network has helped Russian entities evade sanctions since 2024.

Leveraging sub-agents in third-party jurisdictions, the network falsifies trade documents, import-export records, and descriptions of goods, making sanctioned illicit payments appear to be ordinary commercial activity, according to the U.S. Treasury.

As of January 2026, the A7 Network claimed to process more than 2,000 transactions per day for Russian entities, totaling 81.44 billion euros ($91.5 billion), according to the U.S. Treasury. This amounts to roughly 13% of Russia's 2025 foreign trade transactions.

The network has also been used by Iran to evade sanctions, facilitating Iranian oil sales and weapons procurement.

"The same A7 Network Sub-Agents that enable Russian illicit finance created pathways for other actors, including the Central Bank of Iran, the IRGC, and Iran-backed terrorist organizations, to move funds through the international financial system," the U.S. Treasury said.

To crack down on the network, the U.S. Treasury’s Financial Crimes Enforcement Network proposed blocking transactions involving the A7 Network’s sub-agents and issuing alerts to help financial institutions detect activity related to the network. The Treasury’s Office of Foreign Assets Control also sanctioned the A7 Network as a significant transnational criminal organization.

The U.S. Treasury's actions come following the imposition of new sanctions against Russian companies tied to Iranian weapons procurement on Sept. 29. Those measures targeted 13 individuals and entities in Russia, Hong Kong, China, and Pakistan as the United States continued to exert economic pressure on Tehran.

On Sept. 18, U.S. President Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, expanding sanctions and other restrictions on Russia while extending the Iran Sanctions Act for another five years.