Control Risk’s global network analysis provided the basis for a US Office of Foreign Assets Control (OFAC) investigation into a potential front for Iranian manufacturing.
Our client, a US-based manufacturer of construction material, suspected that a competitor was ultimately sourcing products from Iran – a breach of OFAC sanctions.
The client had received import data from its competitor, showing that the competitor was importing material from providers in the Middle East and the Indian Subcontinent. It was common knowledge in the client’s sector that the jurisdictions listed in the import data were not players in the industry. Our client also had what they believed to be reliable information from market insiders that one of the competitor’s providers was in fact a front for Iranian manufacturers seeking to access the global market.
Record reviews and site visits
The client asked us to do network analysis to verify the data and information they had gathered on the competitor. We retrieved corporate records and conducted site visits in two Middle East countries. While we found no evidence in the Middle East, we identified a company with the name of the competitor’s provider in the Indian Subcontinent.
Following a site visit to an industrial free zone, and after making discreet enquiries, we made a discovery: the company in question appeared to have been building a manufacturing plant for a few years in the Indian Subcontinent, though production had not actually begun.
Based on export and import data, the company that had been building the plant appeared to have several procurement channels for the raw material that would ultimately be used in the plant once it was up and running. One of these channels led to a company in the UAE. Though officially struck off, this company in the UAE appeared to be held by two individuals who were connected to the provider. The UAE entity was also featured in a business directory with an address in Iran and a point of contact: the CEO of an Iran-based construction manufacturing company in the same line of business as our client’s competitor.
A second company in the same jurisdiction on the Indian Subcontinent raised concerns during our investigation. The owner of this company was the point of contact for the UAE company suspected of importing material from Iran that we had already identified. Moreover, customs and trade data showed that despite being active in the construction material sector, this second company imported shipments of fruits from the Iranian construction manufacturer. The nature of these shipments corresponded to neither the Iranian exporter nor the UAE importer, raising doubts regarding its validity.
A basis for investigation
When presenting our findings to the client and its external counsel, we outlined the challenge of obtaining further evidence, which would need to be primarily based on multijurisdictional human source enquiries.
A few months after delivering our report, we were contacted by the client’s counsel. They had provided our findings to OFAC, and the body wanted to see our report before considering investigation.