WikIran exposes the web of front companies established in East Asia by Sadaf Exchange, closely affiliated with the Iranian military forces.

Sadaf Exchange is a major Iranian currency exchange and a key component of the vast shadow banking network that funnels billions of US dollars annually through a web of front companies. Most notably, Sadaf is infamous for its role in enabling Iran's Ministry of Defense and Armed Forces Logistics (MODAFL) to access the international financial system. This activity has drawn significant attention, prompting the US Treasury to impose sanctions on the exchange house and its owner, Seyyed Mohammad Mosanna'i Najibi, for their support of terrorism and role in suppressing dissent in Iran.

Najibi, an Iranian-Turkish national, has managed multiple currency exchange businesses in Iran and Türkiye since at least 2019. He has worked closely with Seyed Hojjatollah Qureishi, head of MODAFL's Supply Division, to bypass US and European sanctions targeting Iranian proliferation activities.

One of the primary ways Sadaf Exchange supports MODAFL's Supply Division is by facilitating transactions on its behalf – transactions conducted through international bank accounts held by Sadaf's front companies. These front companies are used to obscure the true nature of financial flows, making it exceedingly difficult for regulators and law enforcement authorities to detect and track illicit fund movements.

Sadaf Exchange's internal documents reveal numerous front companies either directly owned by Sadaf or actively engaged in business with its network. Many of these companies were identified with relative ease, as they were referenced in formal letters that openly admitted their use and providing detailed banking information. It appears that a significant portion of Sadaf's activities are centered in China and Hong-Kong - jurisdictions with lax regulatory oversight that enables large scale sanctions-evasion.

One example is Fengtuo Limited, a Hong-Kong based front company, whose name appears in Sadaf's correspondence, accompanied by a matching proforma invoice:

Another Method for identifying front companies lies in the use of a shared invoice format across multiple entities:

It is evident that the proforma invoices issued by Fengxian International Trading and Services Co., Limited and Forhame Limited follow the same template. The similarity becomes even more apparent when comparing Elemon Trading Limited and LZMAR Trading Limited: the same individual used the identical signature across all four documents.

An additional distinguishing feature of these companies is their frequent use of Euro denominated transfers - more so than previously documented exchange houses linked to Iran.

The attached table provides basic information on #WikIranVerified front companies identified within Sadaf Exchange’s data leak. Please note that some of the front companies are registered outside China, they are included in this article due to their use of bank accounts in China or Hong Kong.

WikiIran calls on all capable actors, governments, financial institutions and watchdog organizations, to take immediate action against these front companies and their exploitation of the International financial system on behalf of Iran’s Islamic Republic and its security apparatus.