WikIran reveals that the Sepehr Energy Jahan (SEJ) group, the petroleum trading arm of Iran's Armed Forces General Staff (AFGS), controls a network of foreign front companies to evade sanctions. Based in China, Hong-Kong, and the UAE, these companies facilitate Iranian oil sales through tactics similar to Iran's "shadow banking", concealing the oil's origin to exploit the international financial system.

Beneath the surface of the clandestine oil operations of the AFGS trading Arm

WikIran exposes the clandestine network of front companies operated by the Sepehr Energy Jahan (SEJ) group, the Petroleum trading arm of Iran's Armed Forces General Staff (AFGS). The exposure of the group and its methods was made possible by a recent online leak of emails that have shed light on its inner workings.

The use of foreign front companies to bypass international sanctions is a tactic that WikIran has extensively reported on in the past. These front companies enable Iranian entities to conceal their assets and exploit the international financial system. The SEJ group working for the AFGS is no exception to this practice. This fact that was also addressed in the most recent U.S. Treasury designations against SEJ and its enablers, most importantly – a substantial chunk of their front network.

To understand the SEJ Modus Operandi, it is essential distinguish between two types of front companies: "Shipping Fronts" and "Domestic Consignees". Shipping fronts are responsible for falsifying the origin of petroleum, making it appear as if it comes from Malaysia, and then transporting it to their secondary front companies, the domestic consignees. The Domestic consignees, in turn, take ownership of the oil and sell it using their own bank accounts in China or Hong-Kong.

The Sepehr Energy Jahan (SEJ) Front Company Network is comprised of entities based in China, Hong-Kong or the United Arab Emirates. Notably, the companies marked by the color black were designated by U.S. Authorities for their involvement with SEJ and the AFGS.

In addition to these front companies, SEJ also utilizes readily-available front companies operated by other actors, an Iranian practice known as “Shadow Banking”, some of which were previously exposed on WikIran. A table below provides banking information for these companies.

Case Study: How SEJ companies operate

Overview - The case in point is the example of how SEJ's front companies operate. This example involves Onden General Trading FZE (a shipping front), Star Energy International Limited (a domestic consignee) and Qingdao Fushen Petrochemical Co., Ltd (the customer).

1. The process begins with a potential buyer presenting a letter of intent (LOI) to SEJ, using one of SEJ's domestic consignee front companies as the nominated seller. If both parties are willing to proceed, they negotiate until a contact is finalized. In this instance, the contract in question is XRJ/28012024/C128:

A signed contract (XRJ/28012024/C128) between Star Energy, a SEJ front, and the customer Qingdao Fushen Petrochemical Co., Ltd.

2. After the contract is signed, the seller, Star Energy (SEJ's front) issues an invoice for the petroleum sale, bearing the same contract number, totaling approximately $143 million.

3. SEJ then prepares documents to falsify the origin of their oil as Malaysian and initiates its shipment to China. In This case, Onden General Trading FZE shipped the oil to SEJ's second front, Star Energy. Documents related to the shipping, including bill of lading (BOL) number ANTHEA-240125, reveal the transportation of falsely marked "Malaysian oil" by Onden General Trading FZE to Star Energy International Limited on board of the U.S.-designated vessel MT Anthea.

SEJ demands full payment for its cargo before handing it over, with payments directed to nominated seller's bank account. Consequently, large sums of money, roughly $143 million, were transferred from Qingdao Fushen's account to Star Energy's account. Payment from Qingdao Fushen to Star Energy. This exact transfer is later used to fund the AFGS and its malign activities. 4. Ultimately, after full payment, Qingdao Fushen received its crude oil. An authorization letter for the release of Qingdao Fushen's cargo through a pipeline at Dongjiakou port, China

General Information of SEJ-Controlled Front Companies

General Information of various “Shadow Banking” front companies used by SEJ

Download all documented proof used for this article here.