The U.S. Treasury Department on Wednesday imposed sanctions on Iraq-based South Wealth Resources Company (SWRC), and two of its associates, for trafficking hundreds of millions of dollars worth of weapons to militias backed by Iran’s Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF).

IRGC-QF is responsible for external operations, and it has provided support to terrorist groups across the Middle East, according to the Treasury. The U.S. in April designated the IRGC as a Foreign Terrorist Organization (FTO); the IRGC-QF has been sanctioned since 2007.  

“The Iraqi financial sector and the broader international financial system must harden their defenses against the continued deceptive tactics emanating from Tehran in order to avoid complicity in the IRGC’s ongoing sanctions evasion schemes and other malign activities,” said Treasury Secretary Steven Mnuchin.

The sanctions against SWRC come as the U.S. continues its pressure campaign against Iran, and Iraq, which has been caught in the middle, has offered to mediate amid the Iran-U.S. tensions. Iranian officials also told Reuters they plan to ask Japanese Prime Minister Shinzo Abe while he makes a historic visit to Tehran on Wednesday, to mediate between Tehran and Washington to help ease sanctions imposed by the U.S.

Washington has put a spotlight on the government of Iran’s support of militias in Iraq and Bahrain in recent months, including through the use of sanctions. The U.S. State Department said in March that sanctions against the Iran-backed Harakat al-Nujaba (HAN) in Iraq demonstrate Washington’s “unwavering commitment to isolate and deny funding to the Iranian regime’s terrorist proxies.” HAN and its leader were designated for their ties to Hizballah and the IRGC. A State Department representative said Wednesday: “The U.S. continues to take action to thwart Iran’s efforts to terrorize and intimidate Iraqis with violence and corruption.”

The IRGC-QF has used SWRC, which is also known as Manabea Tharwat al-Janoob General Trading Company, as a front to smuggle the weapons while also generating profit in the form of commissions to Abu Mahdi al-Muhandis, a sanctioned adviser to IRGC-QF commander Qasem Soleimani, according to the Treasury.