US Sanctions a Friend of Turkey's President for Smuggling Iranian Oil

A NIOC FSO with a crew boat nearby
An Iranian FSO in the Persian Gulf (File image courtesy NITC)

Published Dec 8, 2022 8:55 PM by The Maritime Executive

The U.S. Treasury has sanctioned the prominent Turkish businessman S?tk? Ayan for allegedly helping Iran's Islamic Revolutionary Guard Corps (IRGC) to export crude oil to China. 

Iran's crude exports have been heavily sanctioned by the U.S. government since 2018, when then-President Donald Trump backed out of the multiparty Joint Comprehensive Plan of Action (better known as the Iran nuclear deal). According to the Treasury, S?tk? Ayan - who has close ties to Turkish President Recep Tayyip Erdogan - made a deal with two IRGC leaders, helping them conceal the origins of Iranian oil and arrange for its transport in exchange for a fee.

Those individuals were IRGC smuggling chief Behnam Shahriyari and former Iranian petroleum minister Rostam Ghasemi, both of whom were named by the United States six months ago in connection with the same sanctions-evasion network in Turkey. 

According to the Treasury, Ayan set up contracts to sell hundreds of millions of dollars of crude from the National Iranian Oil Company (NIOC) to buyers in China, Asia, the UAE and Europe. He allegedly arranged for the transportation of the oil and set up the financial mechanisms to get the proceeds back into the hands of the IRGC. The IRGC then allegedly used the funding to support Iran's proxy forces in Lebanon and Yemen (Hezbollah and Ansarallah). 

“Today’s action complements Treasury’s May designations and demonstrates the United States’ ongoing commitment to deny the IRGC-QF its revenue streams and to target those who abuse the international financial system in support of the group,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson. “The United States will continue to strictly enforce sanctions on the IRGC’s illicit oil sales trade.”

Treasury also blacklisted Ayan's holding company, ASB Group, which allegedly held a contract to sell oil for the National Iranian Oil Company as early as 2017. One vessel connected to ASB, the LPG carrier Queen Luca, was also added to Treasury's blacklist.

Ayan was the last senior member of the smuggling network left unsanctioned, and Treasury did not add his name to the list until after Politico published an independent investigation into his role.

Though the reasons for Treasury's delay in sanctioning Ayan are not known, analysts noted that the U.S. may have been reluctant to upset his political sponsors. Ayan is a close confidant and childhood friend of Turkish President Recep Tayyip Erdogan, and the U.S. needs Erdogan's cooperation on a wide range of issues - from Ukrainian grain exports to U.S. basing agreements to counterterrorism operations in northern Syria. 

In 2017, Ayan was accused of helping Presiden Erdogan's family to funnel millions of dollars into an Isle of Man offshore holding company, Bellway Limited. Erdogan has denied the allegations, and the holding company has since been dissolved.