Hong Kong Key Hub for Iranian Sanctions Evasion, New Report Finds

Hong Kong has become a key hub in helping Iran evade international sanctions, according to a new report.

The Committee for Freedom in Hong Kong (CFHK) Foundation released the document, titled “Oil, Arms, and Cash: How Hong Kong Fuels the Iranian Regime,” on Monday.

It says Hong Kong entities assist Tehran in selling oil, moving money, obtaining weapons parts, and expanding surveillance tools used for domestic repression.

The report analyzes more than five years of U.S. Treasury sanctions records, Hong Kong company filings, battlefield evidence from Iranian drones, and open-source investigations.

At least 95 Hong Kong entities have been sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) since 2020 for helping with Iranian oil trades and sanctions evasion.

U.S. authorities identified $4.8 billion in Iranian shadow banking flows routed through Hong Kong-linked accounts in 2024, according to a Financial Crimes Enforcement Network analysis.

This activity formed part of roughly $9 billion in total Iranian shadow banking tracked through U.S. correspondent accounts that year, often involving shell companies.

Hong Kong transshipment networks have been linked to components recovered from Iranian drones used in Ukraine, the CFHK report states, citing forensic evidence and U.S. designations.

Chinese companies supplying surveillance technology to Iran have raised funds through Hong Kong stock listings, it adds.

One example is Huawei, whose Hong Kong-registered subsidiary Skycom Tech supplied equipment that U.S. authorities said helped Iran monitor protesters. The U.S. Department of Justice brought related charges against Huawei in 2020.

“The United States and its allies have sanctioned nearly 100 Hong Kong entities for this conduct since 2020, yet the networks keep expanding,” said Samuel Bickett, the report’s author and a human rights lawyer.

“Targeted sanctions against shell companies are not enough—there need to be consequences for the financial institutions and governments that enable them,” he added.

CFHK Foundation President Mark Clifford said Hong Kong-managed ships move sanctioned Iranian oil, banks handle the proceeds, and traders supply components for drones and missiles used in conflicts from Ukraine to the Middle East.

“It’s time to end Hong Kong’s role in financing and facilitating one of the world’s most ruthless and deadly regimes,” Clifford stated.

Hong Kong offers easy company registration and access to global finance—features that help shell companies operate, the report notes. 

British-headquartered banks HSBC and Standard Chartered, with major operations in Hong Kong, have previously paid large fines for past Iran sanctions violations.