Iran has reportedly developed a covert network of military agencies with a global reach to import military hardware and supplies, amounting to at least $2 billion since January 2025. This network allegedly operates under the guise of the Ministry of Defence, with over 5,000 agencies involved in facilitating military procurement while evading US naval blockades and Western sanctions.

The investigation, conducted by Reuters, reveals that these agencies, many linked to the Islamic Revolutionary Guard Corps (IRGC) and elite-controlled business conglomerates known as bonyads, have financial footprints traceable through shipping data and Iranian bank records dating back to 2016. The findings aim to clarify how the IRGC continues to replenish its missile and drone arsenals amidst ongoing conflicts.

One agency, identified as MOD 346428, has been particularly active, importing significant quantities of rocket propellants, explosives, and essential components for missile and drone production. The hardware has reportedly entered Iran through various means, including land, sea, and air, with much of it traced back to suppliers in China, Russia, and Germany.

Financial Operations Behind the Network

The investigation highlights that the agencies share the same Tehran address as Iran’s Ministry of Defence and Armed Forces Logistics, with most established in 2013 amid increasing sanctions. These agencies form a complex web of frontmen and foreign shell companies, collectively referred to as trustees, who facilitate the purchase of goods using proceeds from illicit oil sales.

Senior military leaders involved in Iran’s missile and drone programmes are reportedly connected to this network. Evidence suggests that phone numbers registered to 91 of these agencies appear in records from state-run Bank Sepah, which serves IRGC personnel. This connection raises concerns regarding the involvement of individuals accused of human rights abuses against civilian protestors.

Despite decades of sanctions on Iran’s military, the investigation found no evidence that the numbered agencies have been designated by Western governments. Experts assert that this network serves as a critical lifeline for the Iranian military, enabling it to sustain its operations during ongoing conflicts.

Global Implications and Responses

The arms import network has reportedly supplied essential materials for Iran’s missile and drone capabilities, which have been used in precision attacks against Gulf energy infrastructure. This has allowed Iran to counteract US military actions effectively. The investigation also notes that Iran has exploited cryptocurrency exchanges and illegal gambling networks to generate illicit revenues, further circumventing sanctions.

In response to the findings, a spokesperson from the US Treasury Department stated that the United States has severed the regime’s economic lifelines, asserting that while Iran may attempt to evade sanctions, the US remains vigilant. The investigation cross-referenced approximately 19,000 import records, revealing that most items imported were marked as military equipment and exempt from duty.

Additionally, the report indicates that Iran has developed a parallel trade system that allows it to utilise funds from illicit oil sales for military procurement without triggering sanctions alarms. Transactions are often settled without currency transfers, relying on trusted frontmen using cash held in foreign banks to facilitate purchases.

As the conflict continues, Iran’s military has reportedly maintained its import activities, with significant shipments arriving from various countries, including the United Arab Emirates. The ongoing situation raises questions about the effectiveness of international sanctions and the global response to Iran’s military procurement strategies.

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