The action identifies four firms in Iran, Turkey and the United Arab Emirates as front companies for Iran's Ansar Bank, which has been funneling money to Iran's Revolutionary Guard Corps and related groups in violation of U.S. sanctions.
Treasury said the companies had sent roughly $800 million to the bank, which had passed the cash on to the IRGC, its Quds Force component and Iran's defense ministry. The money was used to pay salaries for employees and foreign fighters, particularly in Syria.
"We are targeting a vast network of front companies and individuals located in Iran, Turkey, and the UAE to disrupt a scheme the Iranian regime has used to illicitly move more than a billion dollars in funds," Treasury said in a statement.
The step also imposed an additional layer of sanctions on the defense ministry, which had been previously penalized for development of weapons of mass destruction. The new layer adds support for terrorism to the designation.
Tuesday's move comes as the administration increases what it calls a "maximum pressure" campaign against Iran that focuses heavily on denying it revenue from oil exports. On Monday, Treasury renewed a warning to international shipping and port operators, advising them of potential sanctions if they allow Iranian tankers into their facilities. It also warned them that exposure to liability claims because most Iranian vessels are self-insured and not able to cover damage costs in the event of an accident.