The White House
Office of the Press Secretary
FOR IMMEDIATE RELEASE
November 20, 2018
BACKGROUND PRESS CALL
BY SENIOR ADMINISTRATION OFFICIALS
ON TREASURY DEPARTMENT SANCTIONS AGAINST ILLICIT RUSSIA-IRAN OIL NETWORK SUPPORTING THE ASSAD REGIME, HEZBOLLAH, AND HAMAS

Via Teleconference


11:03 A.M. EST

SPOKESPERSON: Good morning everyone, this is [spokesperson] with the National Security Council. Thank you for joining us this morning. This call is on background, attributable to senior administration officials. This call is embargoed until 11:30 a.m. We will begin with opening remarks from our speakers and then move to Q&A.

Our speakers today are [senior administration officials]. With this, I'll now turn to [senior administration official] to open with remarks.

SENIOR ADMINISTRATION OFFICIAL: Good morning everyone. Today, Treasury's Office of Foreign Assets Control, or OFAC, took action against the deceptive international network in which the Iranian regime, together with Russian companies, sends oil to Syria.

As we identify in this action, the Assad regime, in turn, funds Iran's proxy terrorist group. Specifically, in this illicit network, the Iranian regime works with Russian companies to provide millions of barrels of oil to the Syrian government. And, as I mentioned, the Assad regime, in turn, moves hundreds of millions of U.S. dollars to the Islamic Revolutionary Guard Corps Quds Force for Iranian-backed terrorist group Hamas and Hezbollah.

Advertisement

As I will discuss in a moment, Central Bank of Iran officials once again are directly involved in yet another scheme. While the scheme is described in detail in our press release -- and I would also point you to a diagram in our release that illustrates the different players, I'm going to provide you with a brief verbal overview of how this network operates.

At the center of this network is Syrian national, Mohammad Amer Alchwiki, an international businessman, and his Russia-based company, Global Vision Group. Alchwiki and Global Vision Group assist with the delivery of oil from Iran to the Syrian regime, and also the funding of hundreds of millions of U.S. dollars to Quds Force proxies. Specifically, Alchwiki and Global Vision Group work with state-owned Russian company Promsyrioimport, which is a subsidiary of the Russian Ministry of Energy, to facilitate shipments of oil from the National Iranian Oil Company, or NIOC, to Syria.

So the oil is delivered to Syria through a number of vessels. These vessels routinely switch off their tracking devices to mask the fact that they are delivering illicit oil to Syria.

Advertisement

The Iranian regime assists Syria in paying Russia for the oil. And to conceal its involvement in these transactions, the Central Bank of Iran makes payments for the oil using an Iran-based company called Tadbir Kish Medical and Pharmaceutical Company. This is done through Mir Business Bank, an Iranian bank in Russia that we designated two weeks ago.

I want to point out here that, despite the reference to medical and pharmaceutical goods in its name, Tadbir Kish has repeatedly been used to facilitate transfers and support of this oil scheme. And Rasul Sajjad, CBI's International Department Director, and Hossein Yaghoobi, the Central Bank of Iran's Vice Governor for International Affairs, were directly involved in facilitating these transfers, and are therefore also being designated today.

The funds are transferred from an account at Mir Business Bank to Russian state-owned Promsyrioimport to pay for the oil. Andrey Dogaev, First Deputy Director of Promsyrioimport, is also being designated today for working closely with CBI officials to coordinate this scheme.

Advertisement

I would also note that the parent company for Mir Business Bank is Bank Melli, which we noted two weeks ago has -- when we designated Bank Melli -- has facilitated the transfer of the equivalent of billions of U.S. dollars to (inaudible).

Iran benefits from its role in this scheme because the Central Bank of Syria pays U.S. dollar banknotes to Iran's proxy as part of an IRGC Quds Force-orchestrated mechanism to fund Hezbollah and Hamas.

As I mentioned, Alchwiki is a central figure in this illicit network. He acts as that critical conduit for the transfer of hundreds of millions of U.S. dollar banknotes, using the Central Bank of Syria to coordinate transfers with Hezbollah official Muhammad Qasir. OFAC designated Qasir, along with the then-governor of the Central Bank of Iran, Valiollah Seif, on May 15th.

Advertisement

Together, Alchwiki, CBI officials, and Hezbollah have knowingly coordinated the transfer of vast amount of cash to this illicit Iran-Russia-Syria oil-procured financing network.

For your reference, in our press release, we include multiple pictures of Alchwiki, including an image of him posing over stacks of 100-dollar bills, and an image of him with Russian official Andrey Dogaev -- as I mentioned, he was designated.
Importantly, linked to the press release we've also included a handwritten note to Central Bank of Iran official, Rasul Sajjad signed by Alchwiki, and Hezbollah official Qasir, who is also known as Fadi, confirming the transfer of millions of U.S. dollars through this scheme.

This network is a quintessential example of why we so often warn about the risks associated with doing business in Iran. Here, again, the Central Bank of Iran is directly involved in the transfer of vast amounts of money to Russia to support oil shipments to Assad, and in this case, even used a company whose name suggests trade and humanitarian goods as a tool to facilitate these transfers.
I note this in particular because our humanitarian exemptions -- exceptions allow for the fail of agricultural commodities, food, medicine, and medical devices to Iran, but we have zero tolerance for the use of seemingly humanitarian entities to disguise illicit transactions. This is another important reminder about the lack of transparency in the Iranian economy and the dangers that financial institutions and corporations across the world face when doing business with Iran.
The Central Bank of Iran and other Iranian regime institutions and officials continue to exploit Iran's natural resources to fund terrorism, violence, bloodshed, including the atrocities we witness almost every day in Syria. And the United States is committed to imposing a financial toll on those that prop up Assad's authoritarian rule, and we will not waver in our efforts to disrupt all sources of Iranian regime funding that supports terrorist organizations.
In tandem with today's actions, we are also issuing an OFAC maritime advisory, identifying the grave risks to the maritime community if they participate in shipping oil to the government of Syria, as well as the tactics being used to obfuscate the illicit shipment of oil to Syria, and of course, with the Iranian regime.
I'm now going to turn it over to my colleague.
SENIOR ADMINISTRATION OFFICIAL: Thank you. And I don’t have much to add to that excellent overview of the specific steps that were taken today. I just wanted to point out that this is one of our most significant actions that we've taken since the November 5th re-imposition of sanctions, This step, of course, designed to disrupt Iran's attempts to evade those sanctions.
And I think what this indicates more broadly for our policy is President Trump's determination to impose the maximum pressure campaign that is not just a re-imposition of the previous sanctions regime, but an expansion of it so that we can maximize the costs to Iran.
And I'm particularly pleased that we, as the President's NSC staff, have been able to support the exemplary work of our colleagues across the interagency, particularly from the State Department, from the Treasury Department, who have been the invaluable and indefatigable implementers of the President's policy.
And then just, finally, I wanted to reiterate what my colleague was just discussing. Our policy here is to change the destructive and destabilizing behavior of the regime in Tehran -- not to punish the Iranian people. And I agree it's particularly rich that part of the front company for the scheme claims to be pharmaceutical in nature given the current shortages of medicines in Iran caused by behavior of the regime.
The Iranian people deserve a normal government that provides for their needs, not an oppressive regime that exploits their resources for personal gain.
SPOKESPERSON: With that we'll turn to my colleague at the State Department.
SENIOR ADMINISTRATION OFFICIAL: Hi. One second here. Why don't we go to my colleague, and then I'll finish up after?
SPOKESPERSON: Very well.
SENIOR ADMINISTRATION OFFICIAL: Sure. I would like to highlight that today's actions is also part of the United States effort to bring to bear on the Syrian regime the pressure that is necessary to help bring about a political resolution of the Syrian conflict. And disrupting the illicit network that the Treasury has designated today is a crucial element of our broader strategy to disrupt the material ties between the Assad regime and the Islamic Revolutionary Guard Corps of Iran patrons. And this is an effort and the kind of action that you'll see us continue (inaudible) in the months to come.
I also want to stress that today's action highlights the way in which our approaches to Iran and Syria intersect. As Secretary of State Pompeo has said repeatedly, the Iranian regime continues to use the instability that it creates in Syria to expand its influence and its operational reach.

Advertisement

The Iranian regime supports the Assad regime, particular the use of proxies such as Lebanese Hezbollah, which are responsible for abuses against the civilian population in Syria. That undermines the legitimate process to find the peaceful and political resolution to the conflict in Syria, and it further exacerbates the humanitarian crisis in that country while enabling an authoritarian regime to commit mass atrocities against its own people.

And as Secretary Pompeo has repeatedly said, the presence of the IRGC Quds Force and Hezbollah in Syria is unacceptable. Iranian military forces and Iran proxy militias should depart Syria to enable a sustainable political resolution to the conflict.

So today's action is part and parcel of that broader effort to help create better conditions inside Syria to settle the conflict and to push back on the Iranian regime's attempts to project destabilizing power in the surrounding region.

Advertisement

SENIOR ADMINISTRATION OFFICIAL: Secretary Pompeo has repeatedly said that he is determined to target any attempts to evade our sanctions. It has been a little over two weeks since we re-imposed our sanctions and we are already now taking action, as Secretary Pompeo promised, to target any attempts to evade our sanctions. He is deeply committed to the most aggressive and robust implementation of our Iran sanctions ever.

The Iranian regime continue to prioritize spending money and resources on helping the Assad regime over helping the Iranian people.

And the protests in December and January against the regime's policies expressed a great deal of frustration that this regime spends billions of dollars in Syria while its own people are having deep economic troubles. Instead of building schools, or providing jobs for young Iranians, the Supreme Leader and the IRGC send resources to help Syria and Hamas.

Advertisement

The people of Iran suffer more than anyone else under this regime in their corruption, mismanagement, and quest to reshape the region.

Q Yeah, hi. This is Brian Scheid with S&P Global Platts. I was wondering if you could get into the details of how much crude oil or other refined products that Iran is supplying to Syria.

SENIOR ADMINISTRATION OFFICIAL: So what we say in our press release is that it's millions of barrels of oil.

Advertisement

Q Hi, this is Andrew Feinberg, with Breakfast Media. Thanks for doing this call. Given Russian involvement, (inaudible) ask whether these new sanctions will have any effect on the deal the President made with Russian President Putin on Syria, and whether it may put it in jeopardy? And a related question to that, was the President ever fully debriefed on that meeting? And did he ever fully provide the details of that deal to any of you or appropriate members of the administration?

SENIOR ADMINISTRATION OFFICIAL: Thanks, Andrew. I think that our actions today, vis-à-vis Russia, are completely consistent with our overall policy towards their presence in Syria. We think that if they want to play any kind of constructive, forward-leaning role, they’re going to need to stop participating in this kind of illicit activity. But I’m not going to speak to any of the details of a presidential meeting.

Q Hello, this is Toby Tapien (ph) from WTN. Just please clarify for me the direction of this flow of the money from Iran to Russia. Is Syria not paying for this? Just please clarify.

Advertisement

SENIOR ADMINISTRATION OFFICIAL: That’s actually why we put a diagram in the press release, which you should have, that specifically walks you through what the flow is. And so you’ll look in the press release, we note -- right -- you’ve got money going from the Central Bank of Iran to this company, Tadbir Kish Medical and Pharmaceutical Company. That company is in Iran. That then goes to an account at Mir Business Bank. It’s an Iran bank with a location in Russia. The parent company of that bank is Bank Melli, as I’ve already noted.

Then the money flows to this Russian energy company -- you know, state-owned energy company Promsyrioimport. The oil then is delivered to Syria. And then, independently, you’ll see in the chart that you’ve got all this money from the Central Bank of Iran and the Central Bank of Syria that goes directly to the Quds Force and onward to Hezbollah and Hamas. That’s the basic money flow.

Q Hello, this is Jessica Donati from the Wall Street Journal. I was wondering if you’d be able to address a slightly separate but related issue about reports that the administration is planning to sanction Venezuela for (inaudible) to the list of state sponsors of terrorism for their support of Hezbollah and other groups. I was wondering if you could comment on that or if anyone there would be able to.

Advertisement

SENIOR ADMINISTRATION OFFICIAL: I appreciate your interest in that topic, but that’s not related to this call. So I think we’re not going to address that.

Q Hi, thanks so much. This is Bryant Harris from Al-Monitor. I wanted to touch on some of the humanitarian exemption angle to the Iran sanction. You know, you have these exemptions, but at the same time most of these banks are sanctioned, so there is no way for humanitarian (inaudible) to take place. And people have likened it to basically going to CVS and trying to buy a medication with a blocked credit card. So how can, you know, everyday Iranians take advantage of these exemptions if they don’t have access to the international financial system?

And also unrelated, but are we still going to get a report on the Khashoggi murder today at some point?

Advertisement

SENIOR ADMINISTRATION OFFICIAL: In terms of the humanitarian exemption, we’ve been very clear in a number of different statements that we very much support getting humanitarian goods to Iran and have a lot of guidance, for example, on our OFAC website, as to what companies, financial entities, what that guidance entails.

Unfortunately, what this action today highlights is the deceptive means and practices that the Iranian regime has and will go to to try to obfuscate our sanctions and stand up companies that enable deceptive transfer of goods. But we are very committed to making sure that a humanitarian channel exists. It’s now incumbent upon the Iranian regime to stop engaging in these kind of deceptive practices that make it difficult for companies and financial institutions to know and understand who it is in Iran that they're doing business with.

Number one, don’t call companies by humanitarian names that are not -- that are, in fact, engaged, I should say, in transfers -- in illicit transfers of oil, among many other things.

Advertisement

SENIOR ADMINISTRATION OFFICIAL: I'd just like to emphasize that point. The biggest impediment to the flow of humanitarian goods to the Iranian people is certainly not the United States of America; it's the Iranian regime -- which, in this extremely cynical exercise, is exploiting humanitarian goods going into their country in order to try to break the sanctions. So I think that's a question better directed at Tehran.

Q Hi, this is (inaudible). I'm from NRC in the Netherlands. You told us that you've unveiled this attempt to evade the sanctions. What can you do to stop this scheme?

SENIOR ADMINISTRATION OFFICIAL: One of the actions that -- you know, today, what we're doing is we are keeping these individuals and entities that have been at the center of this scheme from having any access whatsoever to the international financial system. And we're very committed, likewise, to working with partners across the world to make sure that they join us in disrupting these schemes.

Advertisement

Q Hi, this is Kyle Mazza from UNF News. Thank you for taking my question. So just a couple of things. One, was President Trump briefed on this action taken today? And number two, the sanctions are one part, but do you really think that the sanctions will have any impact on this? If not, are you considering any more actions, more broadly, than sanctions themselves? Thank you.

SENIOR ADMINISTRATION OFFICIAL: Kyle, to the first part of your question, President Trump is obviously fully aware of all of our activities to exert the maximum pressure campaign on Iran, and fully supportive of it.

SENIOR ADMINISTRATION OFFICIAL: And to the second part of your question, there's absolutely no question in our minds that these actions, as well as a number of the other actions that we've taken -- all the actions, frankly, that we've taken since the beginning of this administration -- will, in fact, have a disruptive impact.

Advertisement

As I mentioned -- just, you know, one example, Alchwiki is an international businessman. I think his days as an international businessman may be over today. And, of course, with our actions come a number of obligations by international financial institutions, among many other things. I'd also note that, as I mentioned at the end of my remarks, we're issuing this maritime advisory to put on notice to the entire maritime industry the kinds of things that is incumbent upon them to be aware of in connection with this scheme and other schemes.

You know, there's no question in our mind that companies -- oil -- that deceptive practices will continue and we need to make sure the maritime industry is aware of these kinds of deceptive practices, and similarly make sure that their vessels don’t get caught up in this lab. And of course, there would be consequences for them, as we laid out in our advisory, were they to do so.

Q Hi, this is Jeff Schogol with Task & Purpose. Thank you for this call. One of my colleagues had asked about the report on the Khashoggi murder, and I was wondering if you could bring us up to date on that. Thank you.

Advertisement

SPOKESPERSON: With regard to your question, we don’t have any update for you on that.

With that, I would like to reiterate that this call is on background, attributable to senior administration officials. The press release that was referred to is going out at 11:30, and this call is embargoed until 11:30.

END 11:29 A.M. EST


============================================================


Public Pool is an automated feed of White House press pool reports. For live updates, follow @WHPublicPool on Twitter.