Iran's Military Network Sidesteps US Sanctions

Iran used more than 5,000 military agencies to import at least $2 billion in equipment, explosives and heavy-duty trucks since January 2025, bypassing Western sanctions and the US naval blockade, a Reuters investigation published Thursday found. Shipping records examined by Reuters show that one agency, MOD 346428, imported $2.3 billion in military-related goods between January 2025 and June 2026.

The shipments included rocket-fuel ingredients, explosives, aircraft parts, industrial machinery and hundreds of heavy-duty trucks. Purchases continued during the US-Israeli war, which began in February, despite attacks on Iran's weapons-production facilities. Iran built the network to keep military procurement moving across borders and through financial channels beyond the reach of sanctions.

A military network with civilian routes

Reuters identified more than 5,000 agencies whose names begin with MOD, referring to Iran's Ministry of Defense, and that share the Tehran address of the Ministry of Defense and Armed Forces Logistics. Registration records give February 11, 1979, as their founding date, though most were established in 2013, when Iran faced severe economic sanctions. Reuters and Israeli-American risk consultancy 240 Analytics traced the network through Iranian banking records, corporate filings and shipping documents, including around 19,000 import records. Some entities had links to the Islamic Revolutionary Guard Corps (IRGC) and large Iranian foundations known as bonyads.

The agencies used intermediaries and overseas companies to buy goods with proceeds from oil sales that bypass sanctions. In 97% of shipments reviewed, records showed transactions settled "without currency transfer," enabling purchases with funds held outside Iran. Banking records showed that 36 agencies held about $1.2 billion in foreign-currency deposits at the end of 2024; the wider network held around $1.8 billion in local currency. Reuters found no evidence Western governments had individually sanctioned the numbered agencies identified in the documents.

Military and civilian uses overlap in the import records. From January 2025 to June 2026, MOD 346428 brought in 435 Iveco trucks; Reuters reported that some matched models used as disguised mobile missile launchers. The agency also imported thousands of Toyota Hilux and Land Cruiser vehicles and Toyota Tundra trucks, models Iranian forces have used for military purposes. Reuters cautioned that it couldn't establish all imported goods were intended for weapons production, since many materials and machines have both civilian and military uses.

Sanctions rhetoric, shipments in motion

Cargo vessels crossing the Caspian Sea from Russia, trucks traveling from Central Asia and freight aircraft arriving from China carried goods into Iran. Imports by the identified military agency fell 47% to $54 million in March, shortly after the war began, then climbed back to $77 million by May. The investigation identified five shipments of Russian detonators worth $7.6 million since January 2025, including a $1.9 million delivery in June 2026.

Deliveries in the first six months of 2026 included detonators, explosives, aircraft-engine components and rocket-fuel ingredients. In February, shortly before the war, Iran imported 93 metric tons of Chinese titanium and hundreds of tons of chemicals that could be used in rocket propellants and explosives, customs records showed. The investigation traced chemical imports to Bandar Abbas, where an explosion in April 2025 killed at least 70 people and injured more than 1,200. Reuters couldn't determine whether chemicals in one shipment it identified caused the explosion.

Since the war began, records listed $27 million worth of goods purchased by Iran's military as originating in the United Arab Emirates, mostly arriving by sea. Reuters data also listed hundreds of millions of dollars in trucks, aircraft components and electronics as coming from Germany and other European Union countries. Some customs records identified shipments only through product codes and declared countries of origin, which Reuters couldn't always independently verify.

The official claims meet the paper trail

A US Treasury spokesperson said Washington had cut off Iran's economic lifelines and would keep enforcing sanctions. "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's records document military imports, foreign-currency deposits and transactions routed through intermediaries alongside that claim.

China's Foreign Ministry said it was unaware of the reported shipments and rejected attempts to link Beijing to the regional conflict. "We firmly oppose attempts to maliciously link regional hostilities to China or smear China's reputation," the ministry said. Iveco said it had safeguards to prevent its vehicles from reaching prohibited users and destinations but couldn't control products resold by third parties. Toyota said it didn't conduct business in Iran and had no knowledge of the purchases described in the investigation. The European Union said it was examining information about Iran's efforts to strengthen its missile and drone programs.

Iranian government bodies and companies contacted by Reuters, including the country's presidency and its UN delegation in Geneva, didn't respond to requests for comment. US President Donald Trump confirmed he approved Vice President JD Vance's outreach to Iran concerning medical supplies and denied directing Vance to restart peace negotiations. The Wall Street Journal reported that Vance had sent a letter to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, seeking to restart negotiations between Washington and Tehran. Regional mediators led by Qatar sought an agreement to prevent further military action as US and Israeli officials prepared for possible strikes after the November 3 elections. Diplomacy, sanctions and procurement continued side by side. Shipping records show what the pressure campaign did not stop.