Iran's Secret Network for Military Procurement Under Sanctions Revealed

Iran operates a clandestine network of over 5,000 entities linked to its security apparatus, enabling it to procure equipment, explosives, and raw materials for its military industries abroad despite international sanctions and a U.S. naval blockade. This finding stems from an investigation by Reuters, conducted in collaboration with the Israeli-American risk analysis firm 240 Analytics. One entity within this network imported $2.3 billion worth of equipment between January 2025 and June 2026. The investigation details a mechanism designed to explain how Tehran continues to supply its missile and drone programs, even during wartime. According to reviewed documents, the procurements include materials for rocket fuel, components for weaponry, industrial machinery, and heavy trucks that can be converted into launchers. The equipment arrived in Iran via sea, air, and land. While import records listed China, Russia, and Germany as source countries, Reuters emphasized that the origin and contents of shipments could not always be independently verified.

A central element of this network involves entities whose names begin with "MOD," followed by a five or six-digit number. These entities share the same Tehran address, which serves the Ministry of Defense and Armed Forces Logistics. Their registration documents list a common establishment date of February 11, 1979, the day Ayatollah Khomeini seized power. However, most of these entities were actually established in 2013, a period when sanctions severely impacted Iran's oil exports and currency. Reuters found no evidence that these numbered entities themselves were subject to Western sanctions, despite decades of sanctions against Iran's security establishment.

The network utilizes front companies and straw men abroad to acquire goods, funded by oil revenues circumventing sanctions. Phone numbers registered to 91 of these entities also appear in records of Saderat Bank, linked to individuals within the Revolutionary Guards who hold accounts there. Payments are made offshore, and goods are then shipped to Iran. In 97% of the examined shipments, transactions were settled under the definition "no currency transfer." Instead of direct bank transfers that could trigger sanctions violation alerts, offshore straw men use funds held in foreign banks to purchase and dispatch the equipment to Iran. Maya Malkan, a former senior U.S. Treasury official involved in crafting Iran sanctions, described this as a parallel trade system allowing the Iranian military to fund its arms programs with oil revenues.

Among the beneficiaries identified are the unit responsible for Iran's ballistic missile program and the "Sahara Thunder" company, which was sanctioned by the U.S. in 2024 for its role in supplying drones to Russia. The numbered entities were identified by Noam Binstock, a senior economist and analyst at 240 Analytics, who examined bank documents found on Telegram and the WikiIran leak site. He noticed a pattern of thousands of accounts with similar names, identical addresses, and common registration dates. Initially, he doubted the account balances, which showed 36 entities holding approximately $1.2 billion in foreign currency accounts by the end of 2024, with the rest of the network holding about $1.8 billion in local currency. A breakthrough came when it was discovered that each entity had a unique 11-digit government identification number, which appeared on company documents, invoices, and shipping records, allowing for tracking even through front companies.

One prominent entity, MOD 346428, imported $2.3 billion in military equipment between January 2025 and June 2026. Between January and April 2025, it imported 886 tons of chemicals from China, classified for solid rocket fuel. Shortly after the last shipment, a fatal explosion occurred at the Bandar Abbas port on April 26, killing at least 70 people and injuring over 1,200, which sources attributed to the ignition of perchlorate in containers. In February 2026, Iran received 93 tons of titanium and significant quantities of nitrocellulose and other chemicals that can be used in missile and explosives industries. The network also procured 435 Iveco trucks between January 2025 and June 2026, some of which were identified by Reuters at a customs lot near Tehran. Iveco stated that its official distributors are required to prevent illicit military use and that vehicles reaching Iran were outside its control.

Imports saw a dip in March 2025, following the war's outbreak, but recovered by May. Shipments arrived from Russia, Central Asia, and China. Since the war began, military imports declared from the UAE totaled $27 million, primarily by sea. Advanced industrial machinery, such as computer-controlled lathes and electron beam furnaces, were also purchased, which can be used in civilian industries but also for producing missile and drone components. The findings also suggest links between these entities and economic foundations controlled by regime officials, known as "Bonyads," used for both foreign procurement and domestic fund transfers. For instance, a 2021 request for 50 billion rials from a state steel company to the Revolutionary Guards commander in Khuzestan, Hassan Shahvarpour, was to be transferred to an account under MOD 424000. Shahvarpour is under U.S. sanctions for his role in suppressing protests in 2019.

The U.S. Treasury stated that it has cut off the regime's economic oxygen and is always "ten steps ahead" of Iran's attempts to circumvent sanctions. China's Foreign Ministry denied knowledge of the described cases and opposed attempts to link it to regional conflicts. The EU representative noted that sanctions enforcement is the responsibility of member states and that information on Iran's missile and drone programs is being carefully reviewed. Iranian officials contacted by Reuters did not respond.