Iran Sanctions Evasion: Reuters Uncovers 5,000 Agencies

Iran has developed an extensive network of military procurement agencies that has continued to import billions of dollars’ worth of equipment despite US Sanctions and restrictions on its international trade, according to a Reuters investigation. The network allegedly relies on front companies, overseas intermediaries and financial arrangements designed to conceal transactions and maintain supplies for Iran’s military programmes.

The investigation identified more than 5,000 numbered agencies associated with Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Reuters found that the network imported approximately $2.3 billion in military-related hardware through one agency alone between January 2025 and June 2026, according to import records examined by the news organisation.

The reported purchases included chemicals used in rocket propellants, explosives, aircraft engine components, industrial machinery and heavy-duty trucks that can be adapted for military purposes. The findings offer insight into how Iran may have continued replenishing its missile and drone supplies despite international sanctions and military pressure.

The investigation was conducted by Reuters in collaboration with 240 Analytics, an Israeli-American risk consultancy. It drew on Iranian bank and government records, corporate filings, shipping documents and import data to trace the agencies and their connections to military procurement.

What Is Iran’s Secret MOD Network?

The agencies identified by Reuters operate under names beginning with MOD, an abbreviation associated with Iran’s Ministry of Defense. Their records contain numbered identities, financial accounts and corporate registrations that researchers used to connect transactions across the procurement system.

According to the investigation, the agencies share the same Tehran address as the Ministry of Defense and Armed Forces Logistics. Their official incorporation dates are listed as February 11, 1979, the day Ayatollah Ruhollah Khomeini came to power following the overthrow of Iran’s monarchy. However, records reviewed by Reuters indicate that most of the agencies were actually established in 2013, when Iran was facing mounting economic pressure from international sanctions.

The agencies’ financial activities appeared in shipping records dating back to 2016. Their transactions allegedly connect Iranian military organisations with overseas companies and intermediaries who arrange purchases, payments and deliveries.

Reuters reported that these intermediaries, described in the investigation as trustees, operate through a network of frontmen and foreign shell companies. The system allows Iran to use proceeds from illicit oil sales to purchase goods abroad while limiting the visibility of direct financial transfers across borders.

Some agencies have links to the Islamic Revolutionary Guard Corps (IRGC), Iran’s powerful military organisation, and to large quasi-governmental foundations known as bonyads. These foundations are controlled by members of Iran’s political and economic elite and play significant roles in the country’s economy.

Although Iran’s military has been subject to US sanctions for decades, Reuters said it found no evidence that Western governments had specifically designated any of the numbered agencies identified in the documents.

Miad Maleki, a former senior US Treasury Department official who helped develop sanctions against Iran, described the network as a critical support system for the country’s military trade.

“What you have here is the regime’s military lifeline during this conflict and for many years before,” Maleki said. “This is the complete ecosystem of the Iranian military’s trade business.”

How Iran Allegedly Bypasses Financial Sanctions

A central feature of the reported network is its ability to conduct international purchases without relying on conventional cross-border currency transfers. Such transfers can trigger compliance checks, financial monitoring and sanctions alerts, making them more difficult for sanctioned entities to complete.

According to the import data reviewed by Reuters, approximately 97% of the shipments examined were settled through transactions recorded as occurring “without currency transfer.” Under this arrangement, overseas intermediaries with access to foreign bank accounts could purchase goods on Iran’s behalf and arrange their shipment to the country.

The system allegedly separates the foreign supplier from the ultimate Iranian military customer. Instead of receiving payment directly from a sanctioned Iranian institution, a supplier may deal with an intermediary or a company operating in another country.

Iran’s oil revenues are also reported to play a role in financing these purchases. The investigation found that the numbered agencies continued receiving money associated with oil sales and using funds to acquire military-related equipment.

Such arrangements can make it more difficult for authorities and financial institutions to identify the ultimate beneficiary of a transaction. However, the effectiveness of the system varies by shipment, and the investigation did not independently establish the full details of every payment or intermediary involved.

The network also appears to extend beyond the purchase of finished weapons. By importing raw materials, specialised machinery and industrial components, Iran can obtain supplies that may support domestic production of missiles and drones.

MOD 346428 Emerges as a Major Military Importer

One agency, identified as MOD 346428, stood out in the investigation because of the scale and range of its purchases. Reuters found that it imported approximately $2.3 billion in military-related hardware between January 2025 and June 2026, based on records from ImportGenius, a platform that aggregates international trade data.

The agency’s overseas purchases had increased significantly in the years preceding the reported period. Iranian media-published customs statistics showed that its imports rose from $442 million in the 12 months ending March 2023 to $988 million in the following year, placing it among Iran’s top 10 importers.

The purchases documented by Reuters included rocket propellant ingredients, explosives, detonators, aircraft engine parts and heavy-duty vehicles. The shipments arrived through multiple routes by sea, land and air, with declared origins including China, Russia and European countries.

During the first six months of 2026, the agency’s recorded deliveries included $1.9 million worth of detonators, tonnes of explosives, aircraft engine components, rocket fuel ingredients and heavy-duty launch vehicles.

Weapons and sanctions experts consulted by Reuters said many of these materials could be used in ballistic missiles and drones, including systems from Iran’s Shahed family. Some of the products also have legitimate civilian and industrial applications, meaning their presence in import records does not, by itself, establish their final use.

Peter Salisbury, an adjunct assistant professor at Columbia University who has researched Iranian arms transfers and supply chains, said the records indicated a large-scale effort to maintain or expand the country’s weapons capabilities.

“This looks like an industrial-scale effort to rebuild or expand Iran’s existing fleet” of drones and missiles, Salisbury said. He added that the information demonstrated the adaptability of Iran’s supply network and its ability to find alternative routes.

China and Russia Feature in Iran’s Supply Routes

China and Russia were among the countries listed as origins for materials imported through the network. The documents reviewed by Reuters showed shipments entering Iran through several transport corridors, including cargo vessels crossing the Caspian Sea from Russia, trucks travelling from Central Asia and freight aircraft arriving from China.

Chinese-origin shipments reportedly included chemicals used in rocket propellants, titanium and other industrial materials that may be suitable for military production. Russian-origin deliveries included detonators that can be used to initiate explosives in weapons systems.

Reuters reported that, in the month leading up to the start of the war on February 28, 2026, shipments included 268 tonnes of nitrocellulose and 276 tonnes of other chemicals listed under customs classifications that include perchlorates. These materials can have applications in rocket propellants and explosives.

On February 9, 2026, a ship reportedly arrived at the Iranian port of Bandar Abbas carrying 93 tonnes of unwrought titanium from China. Experts consulted by Reuters said the high-strength metal could be used to manufacture missile airframes and rocket motor casings, although it also has non-military industrial applications.

China’s Foreign Ministry said it was unaware of the situation described by Reuters and rejected what it called attempts to associate China with regional hostilities or damage its reputation.

“We firmly oppose attempts to maliciously link regional hostilities to China or smear China’s reputation,” the ministry said in a statement.

Russia’s Defence Ministry, the White House and US Central Command did not respond to Reuters’ requests for comment about the findings.

On October 12, US President Donald Trump said he did not believe China and Russia were providing significant support to Iran. In a social media post, he said that if such support existed, it was probably at a low level and that the United States would quickly become aware of it.

The import records cited by Reuters document declared origins and commercial transactions, but they do not independently establish that the Chinese or Russian governments directed or authorised every shipment. The distinction between the origin of a product, the company supplying it and government involvement remains important when assessing the findings.

European Companies Also Appear in the Import Records

The investigation found that goods listed as originating in the European Union also reached Iran’s military procurement network, despite EU sanctions targeting Iran’s Defence Ministry and other entities.

According to the records, hundreds of millions of dollars’ worth of trucks, aircraft engine components and electronics were listed as coming from Germany and other European countries. The shipments included approximately $34 million in Iveco trucks associated with MOD 346428.

Not all records contained detailed descriptions of the products. In some cases, Reuters relied on customs codes to identify the likely contents and declared origin of shipments. The organisation said it could not independently confirm every item or its final destination.

An EU spokesperson said member states were responsible for enforcing the bloc’s sanctions and that the European Union continued to assess information concerning Iran’s drone and missile programmes.

Germany’s and Italy’s governments did not respond to Reuters’ requests for comment.

The findings raise questions about how goods with potential military applications move through international supply chains and whether exporters, distributors and regulators can consistently identify the ultimate users of products sold through third parties.

How the Investigation Uncovered Thousands of Agencies

The discovery of the numbered agencies began with financial documents from Bank Sepah, an Iranian state-owned lender that handles salary and pension payments for IRGC personnel.

Noam Binstok, a senior analyst at 240 Analytics, said he discovered the entities in June 2025 while uploading thousands of pages of Bank Sepah documents obtained from Telegram and WikiIran, a website that publishes leaked documents relating to Iran.

Binstok noticed that thousands of accounts shared a distinctive naming pattern. The names began with MOD, or VODJA in Persian, followed by a five- or six-digit number written out in words rather than numerals. The agencies also shared the same registration address and official incorporation date.

Each agency could be identified through an 11-digit government identity number that also appeared in corporate registry records, shipping documents, invoices and bank accounts. These identifiers allowed researchers to connect financial activity with overseas purchases, even when transactions involved intermediary companies.

The bank records reviewed by Reuters included account holders’ names, identification numbers and account balances. Binstok said 36 of the agencies held foreign-exchange accounts containing a combined $1.2 billion at the end of 2024. The remaining agencies collectively held approximately $1.8 billion in local currency, averaging about $360,000 per account.

After temporarily suspending the project, Binstok returned to the documents in August and identified newer records showing the agencies receiving money associated with oil sales and purchasing dual-use equipment.

“That was the major breakthrough that led me to start understanding the actual scope that we are talking about, and to find actual examples of imports,” Binstok said. “It was then I knew we were onto something really big.”

Reuters subsequently worked with 240 Analytics to compare the government identity numbers against shipping records, corporate registrations and import data. The investigation also examined material published by WikiIran, whose operators describe themselves as Iranians opposed to the government and living in exile.

Reuters said it could not determine the identities of the people operating WikiIran. The website told the news organisation that it had verified the authenticity and origin of the documents through its sources and contacts inside and outside Iran.

The Bank Sepah documents were reportedly obtained in a data breach claimed by a group called Codebreakers, which later announced other hacks of Iranian government data. Bank Sepah did not respond to Reuters’ request for comment about the breach.

Iran Continued Imports Despite the Naval Blockade

The import data reviewed by Reuters suggests that shipments continued even after the war began and restrictions on maritime movement intensified. However, the volume of recorded imports fluctuated during the period examined.

Monthly imports initially fell by 47% in March 2026 to $54 million, compared with the previous month. By May, the recorded value had risen to $77 million, indicating that shipments had continued despite the disruption.

A shipment of Russian detonators worth $1.9 million, recorded in June 2026, was the latest of five similar Russian deliveries identified by Reuters. Together, those shipments accounted for approximately $7.6 million in detonators imported since the beginning of 2025.

The records also showed military purchases worth approximately $27 million listed as originating in the United Arab Emirates, with nearly all arriving by sea.

The UAE government did not respond to Reuters’ request for comment about the shipments. The investigation also noted that Iran had targeted infrastructure in the UAE and continued attacking crude-oil tankers with drones and missiles during the period described.

The most recent shipment from the UAE identified in the records was listed as electronics and arrived by sea on June 27, 2026. According to the report, the delivery occurred nine days after the United States announced a suspension of its naval blockade. The blockade resumed in mid-July and remained in effect, according to the supplied report.

The timing and continued appearance of imported goods illustrate the difficulty of completely interrupting a complex procurement network. However, trade records alone do not establish how much of the imported material reached military units, whether every shipment successfully evaded enforcement measures or the extent to which the supplies affected Iran’s operational capabilities.

Rocket Fuel Chemicals Linked to Deadly Bandar Abbas Explosion

One of the most significant shipments identified in the investigation involved chemicals delivered to the Bandar Abbas port complex in southern Iran in early 2025.

Between January and April 2025, MOD 346428 reportedly imported 886 tonnes of chemicals into the port. The shipment records listed China as the origin and used a customs classification that includes sodium chlorates and other perchlorates, chemicals that can be used in the production of solid rocket propellants.

Three days after the final shipment, a major explosion occurred at the port. The blast killed at least 70 people and injured more than 1,200, according to the figures cited in the report.

Two people familiar with the April 26 explosion told Reuters that sodium perchlorate had ignited in shipping containers at the port. Iranian state media reported that the chemicals were stored by Sina Port and Marine Services Development Co., which is owned by Bonyad Mostazafan, a large foundation controlled by Iran’s supreme leader.

The chief executive of Sina at the time said the explosion resulted from a “false statement” about the contents of a consignment delivered without the proper documents and tags.

Reuters said it could not determine whether chemicals in the final 75-tonne shipment identified in its records were responsible for the explosion. The reported overlap between chemical imports and the subsequent blast therefore does not establish that a particular shipment caused the disaster.

The United States sanctioned Bonyad Mostazafan in 2020. The US Treasury Department alleged that the foundation, which presents itself as a charitable organisation serving disadvantaged people, was used by Iran’s supreme leader to enrich his office and reward allies.

The foundation was led by Hossein Dehghan, who became Iran’s defence minister in 2013, when many of the numbered agencies were established. Dehghan did not respond to Reuters’ request for comment about the explosion, the agencies or his position at the foundation.

Heavy-Duty Trucks Allegedly Used as Mobile Missile Launchers

The procurement network did not only import chemicals and weapons components. It also purchased heavy-duty vehicles that can be modified for military use, including as mobile platforms for missiles and drones.

Reuters traced several vehicle transactions connected to MOD 346428. One example involved six Iveco Eurocargo trucks purchased in Italy in 2022 by an Iranian car dealer living there. According to records published by WikiIran, the trucks were shipped to Deilami Trading Co. in Dubai before being delivered to Bandar Abbas in Iran.

The end buyer’s 11-digit identification number matched MOD 346428. A packing list identified Sahara Thunder as the ultimate recipient of the vehicles. The United States sanctioned Sahara Thunder in 2024 over its alleged role in manufacturing and supplying drones to Russia for use in the war against Ukraine.

Reuters said it could not independently establish every detail of the transaction beyond the records it reviewed. Deilami Trading did not respond to a request for comment.

Between January 2025 and June 2026, MOD 346428 reportedly imported another 435 Iveco trucks. Reuters used satellite imagery, social media footage and vehicle identification numbers to trace some of the vehicles to a customs yard on the outskirts of Tehran.

In March 2026, US Central Command released footage that it said showed an American strike on a disguised Iranian mobile missile launcher. Reuters could not establish whether the vehicle shown in the footage was among those imported through MOD 346428. However, analysts at Janes, a UK-based defence intelligence company, identified the truck as an Iveco model of a type imported by Iran.

Iveco said it had contractual safeguards intended to prevent its products from being used for military, chemical, biological or nuclear purposes and to prevent sales to prohibited destinations, entities or individuals.

The company said it had no control over products transferred or exported by third parties with which it had no direct contractual relationship. It also said it had no record of the 2022 sale identified by Reuters and that most of the trucks seen in the customs yard in 2025 had been intended for Central Asia.

The investigation also found imports of Toyota Hilux and Land Cruiser vehicles, which can be modified to carry heavy machine guns, as well as Toyota Tundra trucks that the IRGC uses to transport drones.

Toyota said it did not conduct business in Iran and had no knowledge of the purchases described in the investigation. Japan’s Ministry of Economy, Trade and Industry said it maintained strict national-security-related export controls and conducted outreach to businesses about their obligations.

Precision Machinery Could Support Domestic Weapons Production

Beyond finished components and vehicles, the procurement network reportedly acquired specialised industrial equipment that could help Iran manufacture military hardware domestically.

Import records included computer-controlled lathes, electron-beam furnaces and particle accelerators. These machines have legitimate industrial and scientific uses, but some can also be used in processes relevant to the production of missile and drone components.

The investigation also identified materials such as titanium, which can be used in high-strength structures, including missile airframes and rocket motor casings. Experts told Reuters that the combination of raw materials, machinery and specialised components could support different stages of weapons production.

Such goods are often described as dual-use items because they can serve civilian and military purposes. Their importation does not automatically prove that they were used to build weapons, but their potential applications can make export controls and end-user verification particularly important.

Reuters cross-checked a portion of approximately 19,000 import records against shipping documents, social media footage and state media reports. The records showed that nearly all the items examined were exempt from duties and specifically marked as military equipment, although experts cautioned that some products could also have civilian applications.

Connections to Iran’s Military and State-Controlled Foundations

The investigation found links between the MOD agencies, IRGC personnel and foundations that operate across Iran’s economy. These connections suggest that the procurement network may be integrated into a broader system involving military institutions, commercial entities and organisations controlled by the country’s political elite.

Phone numbers registered to 91 of the numbered agencies also appeared in records associated with IRGC personnel who held accounts at Bank Sepah. Among the individuals identified through these records were at least two commanders whom the United States has accused of abuses against civilian protesters.

One organisation examined by Reuters was the Foundation for the Preservation of Relics and Publication of Sacred Defense Values. The foundation promotes the government’s interpretation of the Iran-Iraq War and what it describes as the values of resistance, sacrifice and martyrdom.

Records reviewed by Reuters showed transactions linking the foundation to at least two MOD agencies. In 2017, the foundation reportedly received four shipments of electronics and refrigeration equipment associated with MOD 346428.

The investigation did not establish how the foundation used those materials. However, its leadership includes senior IRGC commanders across Iran’s 31 provinces, illustrating the overlap between military officials and institutions involved in state-sponsored ideological activities.

Documents Link Military Accounts to Commander Accused of Abuses

One commander whose financial connections appeared in the records was Brigadier General Hassan Shahvarpour, a longtime leader of elite IRGC forces in Khuzestan province.

According to a US sanctions document, forces under Shahvarpour’s command killed at least 100 civilians in Mahshahr during protests in 2019 against high fuel prices. The document alleged that security forces used armoured vehicles to surround people attempting to flee and fired machine guns into crowds.

Two local activists cited by Reuters described the killings and said security forces also set fire to sugarcane fields where some protesters had sought shelter. Shahvarpour did not respond to Reuters’ detailed request for comment.

In 2021, Shahvarpour reportedly sought 50 billion rials from a state-owned steel company to finance a new IRGC building in Khuzestan. A document reviewed by Reuters showed that the account designated to receive the money belonged to MOD 424000.

The United States sanctioned Shahvarpour in 2020 over alleged human rights abuses. A prominent Iranian cleric later publicly praised him, describing the sanctions as a “source of pride.”

Activists told Reuters that Shahvarpour’s forces also participated in suppressing demonstrations in Khuzestan at the beginning of 2026, during a wider period of unrest over Iran’s economic conditions. They said they documented 46 deaths in the province and reported that most occurred on January 8 and 9, when they alleged the IRGC opened fire on demonstrators.

The allegations cited in the investigation illustrate how the same network of military-linked institutions and financial accounts may intersect with both weapons procurement and organisations involved in domestic security operations. The records do not, by themselves, establish that every MOD agency or transaction was connected to abuses against protesters.

Bonyads and the Structure of Iran’s Economic Elite

Bonyads are large quasi-governmental foundations that occupy an important place in Iran’s economic and political system. Many were established after the 1979 Islamic Revolution using assets confiscated from the former royal family and people considered opponents of the new government.

These foundations operate across a range of economic activities and are often linked to powerful figures within Iran’s political establishment. Previous Reuters reporting and US sanctions documents have described them as part of a patronage system that helps consolidate the influence of the country’s elite.

Their relationship with military-linked procurement agencies can provide a route through which commercial operations, financial resources and state institutions intersect. In the case of the MOD network, the records reviewed by Reuters show that numbered agencies shared addresses, identification systems and financial connections with organisations associated with Iran’s military and ruling establishment.

The links are significant because sanctions enforcement often depends on identifying the people and entities that ultimately control a transaction. When a purchase passes through several companies or intermediaries, determining its ultimate beneficiary can become more difficult.

US Treasury Says Sanctions Continue to Target Iran’s Financial Lifelines

The US Treasury Department defended its sanctions strategy in response to Reuters’ findings, saying the United States had disrupted the Iranian government’s access to financial resources.

A Treasury Department spokesperson said the United States “has severed the regime’s economic lifelines.”

The spokesperson added that Washington continued to monitor efforts to evade sanctions and obtain foreign currency for military and weapons programmes.

“While the regime may continue its desperate attempts to evade our powerful sanctions, fund its military and weapons programs, and access foreign currency, we are always 10 steps ahead,” the spokesperson said.

The investigation nevertheless identified numerous numbered agencies that Reuters said it could not find on Western sanctions lists. That finding raises questions about whether existing enforcement mechanisms adequately capture the complex structures used by military-linked entities and their intermediaries.

The fact that a particular agency does not appear on a sanctions list does not necessarily mean that every transaction involving it is lawful. Restrictions can apply to designated end users, controlled goods and transactions involving other sanctioned entities, depending on the applicable jurisdiction and circumstances.

What the Findings Mean for Iran’s Missile and Drone Capabilities

Iran’s ability to continue acquiring military-related materials has important implications for assessments of its missile and drone programmes. The supplies identified in the records include components and raw materials that experts said could support the production or maintenance of weapons systems.

The United States and Israel have targeted Iranian missile and drone operations since the war began on February 28, 2026. The strikes have included facilities that the Pentagon said were producing munitions. Reuters could not independently determine the full extent of the damage caused by the attacks.

Despite the military pressure, Iran continued launching attacks against neighbouring countries and vessels attempting to transit the Strait of Hormuz, according to the report. The procurement network offers one possible explanation for how the country has maintained access to at least some foreign supplies during the conflict.

However, import data cannot establish the exact number of operational missiles or drones that Iran possesses, how much equipment has been destroyed or how many imported components have been incorporated into weapons. Those questions require additional intelligence and technical evidence.

The findings do show that sanctions and transport restrictions have not completely eliminated the flow of military-related goods into Iran. Instead, the reported network appears to use a combination of intermediaries, multiple transport routes, financial arrangements and industrial suppliers to maintain access to materials.

Conclusion: A Complex Procurement System Challenges Sanctions Enforcement

The Reuters investigation describes a procurement structure that allegedly connects thousands of numbered agencies, military institutions, financial accounts, overseas companies and state-linked foundations. Through these connections, Iran has continued purchasing equipment and materials that may support its missile and drone programmes despite years of Western sanctions.

The role of MOD 346428 stands out in the findings because of its reported $2.3 billion in imports between January 2025 and June 2026. Its recorded purchases ranged from rocket propellant ingredients and explosives to industrial machinery and heavy-duty vehicles.

The investigation also highlights the difficulties facing governments seeking to restrict military procurement through sanctions. Products may pass through multiple jurisdictions, intermediaries can obscure the ultimate buyer, and many industrial materials have both civilian and military uses.

For the United States and its partners, the findings raise questions about the identification of previously unlisted entities, oversight of international supply chains and enforcement against companies or intermediaries that facilitate prohibited transactions. For Iran, the reported network illustrates how financial and commercial structures can help preserve access to foreign goods even under intense economic and military pressure.

The full operational impact of the network remains uncertain. While experts cited by Reuters said many of the imported materials could support missile and drone production, the records do not establish the final use of every shipment or the extent to which the supplies have replenished Iran’s weapons stockpiles.