The Treasury said the company, Manabea Tharwat al-Janoob General Trading Company, was used by the IRGC to smuggle "hundreds of millions of dollars' worth" of weapons to IRGC allies in Iraq.
South Wealth Resources has also helped move millions of dollars to Iraq "for illicit financial activity benefitting" the IRGC and Iraq militias it supports.
The company and two Iraqis who worked with it were placed on the US sanctions blacklist, which seeks to lock them out of the international financial system by forbidding Americans and companies with US units, particularly banks, from doing business with them.
The company and the two Iraqis, Makki Kazim Abd Al Hamid Al Asadi and Muhammed Husayn Salih al-Hasani, were also placed on the US State Department's list of "Specially Designated Global Terrorists."
"Treasury is taking action to shut down Iranian weapons smuggling networks that have been used to arm regional proxies of the IRGC Qods Force in Iraq, while personally enriching regime insiders," Treasury Secretary Steven Mnuchin said in a statement.
"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," he said.