Reuters Investigation Reveals International Network Financing Iranian Military Procurement via UAE, China, Russia, and Germany

Yemen Monitor / Agencies / Newsroom: A Reuters investigation has revealed that Iran established a vast network of covert military entities to procure military equipment, explosives, and heavy trucks from global markets worth at least $2 billion since January 2025, in an effort to circumvent Western sanctions and trade restrictions. According to the investigation, the network includes more than 5,000 entities operating under names beginning with the letters “MODAFL”—an acronym for Iran’s Ministry of Defense and Armed Forces Logistics—forming a parallel financial and commercial system that enables Tehran to import military program supplies through intermediaries and front companies in several countries. Financial records, government documents, and import records reviewed by Reuters indicate that these entities are linked to Iran’s Ministry of Defense and the Islamic Revolutionary Guard Corps (IRGC), alongside commercial conglomerates known as “Bonyads,” which are controlled by Iran’s elite. The investigation highlights Iran’s capability to continue expanding its arsenal of missiles and drones, despite military operations targeting its facilities and weapons programs, and years of imposed sanctions. Between January 2025 and June 2026, one such entity, known as “MODAFL 346428,” imported significant quantities of missile fuel, explosives, drone and missile components, as well as heavy trucks capable of transporting missile launch platforms. According to records, these shipments arrived in Iran by land, sea, and air, with a major portion originating from China, Russia, and Germany. Data also showed recorded Iranian military imports valued at $27 million from the UAE since the outbreak of the war, most of which arrived by sea. Reuters noted that this network relies on individuals acting as commercial fronts and foreign shell companies—known as “trustees”—who purchase equipment on behalf of Iran using illicit oil sales proceeds. Import data shows that roughly 97 percent of the shipments reviewed by the agency were settled without cross-border money transfers, as foreign-based Iranian intermediaries purchased goods using funds deposited in foreign banks before shipping them to Iran. The investigation pointed out that all covert entities share a single address in the capital, Tehran, matching the address of the Iranian Ministry of Defense and Armed Forces Logistics. Records also reveal that most of these entities were officially registered in 2013, despite listing their establishment date as February 11, 1979. Reuters identified this network in collaboration with “240 Analytics,” a risk consultancy firm, relying on thousands of Iranian banking and government records, company registration documents, and import data. The investigation quoted Mayad Maleki, a former U.S. Treasury official who helped design sanctions programs against Iran, as saying the network represents a vital lifeline for the Iranian military apparatus, providing a comprehensive foreign trade system to purchase military gear using offshore oil revenues. Maleki added that these entities constitute a system parallel to official international trade, enabling Iran to continue funding its military requirements outside traditional financial channels subject to oversight and sanctions. According to the investigation, imports during the first half of 2026 included $1.9 million worth of detonators, tons of explosives, aircraft engine parts, missile fuel components, heavy launch vehicles, and precision industrial machinery usable for manufacturing military hardware. Weapons and sanctions experts stated that these materials could be used in producing ballistic missiles and drones, including “Shahed” drones, noting that some are classified as dual-use items suitable for both civilian and military purposes. Peter Salisbury, an adjunct associate professor at Columbia University, said the data points to extensive efforts to rebuild or expand Iran’s missile and drone inventory, adding that it demonstrates the Iranian system’s ability to adapt and find new pathways to secure its needs. According to Reuters, beneficiaries of the network include military units overseeing ballistic missile programs, as well as “Tondar Sahra,” a firm sanctioned by Washington in 2024 for manufacturing and supplying drones to Russia used in the war in Ukraine. Banking records also showed that phone numbers registered to 91 entities within this network appeared in records of Iran’s state-owned Bank Sepah linked to IRGC members holding accounts there. The investigation noted that the United States and Israel have targeted facilities associated with Iranian ballistic missile and drone programs since the outbreak of war on February 28, 2026; however, Iran has continued launching attacks on neighboring countries and vessels attempting to transit the Strait of Hormuz. In response to Reuters’ inquiries, the Chinese Ministry of Foreign Affairs stated it was unaware of the situation described in the investigation and rejected what it called malicious attempts to link regional military operations to China or tarnish its reputation. The UAE government did not respond to requests for comment regarding the shipments, nor did the Russian Ministry of Defense, the U.S. Department of the Treasury, the White House, or U.S. Central Command. Reuters received no responses from the Iranian government agencies and companies contacted, including Tehran’s mission to the UN in Geneva and the Iranian presidency. The investigation comes as Iran faces mounting military and economic pressure, while the compiled data reveals Tehran’s reliance on a complex international network of intermediaries, companies, and financial mechanisms to continue securing its military program requirements. 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