Introduction: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently sanctioned a significant procurement network involved in supplying materials and sensitive technology for Iran’s ballistic missile and Unmanned Aerial Vehicle (UAV) programs. This action, taken on February 2, 2024, includes the designation of entities linked to the Islamic Revolutionary Guard Corps (IRGC) and its Qods Force. The move aims to disrupt illicit procurement networks supporting Iran’s advanced conventional weapons development.

Background:

  1. Objective and Scope:
    • The sanctions target a key procurement network supplying materials for Iran’s ballistic missile and UAV programs, highlighting Iran’s continued proliferation of advanced weaponry.
    • Entities designated are associated with Hamed Dehghan and Pishtazan Kavosh Gostar Boshra (PKGB), actively supporting Iranian military organizations, including the IRGC.
  2. Threat Perception:
    • Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, underscores the critical threat posed by Iran’s weapons, emphasizing the commitment to disrupt illicit procurement networks.

Designated Entities:

  1. Hong Kong-based Front Companies:
    • FY International Trading Co., Limited (FYIT): Procured UAV engines and carburetors for PKGB, conducting millions of dollars in transactions through the U.S. financial system. Connections to Iranian shadow banking networks revealed.
    • Duling Technology HK Limited (Duling Technology): Facilitated procurement of U.S. and Western-origin items with UAV applications for PKGB, involving millions of dollars.
    • Advantage Trading Co., Limited (Advantage Trading): Incorporated by PKGB in 2023, used for procuring U.S. and Western-origin microelectronics and aviation parts with UAV applications.
  2. IRAN-based Subsidiary:
    • Narin Sepehr Mobin Istatis (NSMI): Iran-based subsidiary of PKGB, designated for being owned or controlled by PKGB.
  3. IRGC-QF Commodity Sales to PRC Entities:
    • China Oil and Petroleum Company Limited (COPC): A Hong Kong-based IRGC-QF front company arranging contracts and selling hundreds of millions of dollars’ worth of Iranian commodities for the benefit of IRGC-QF. Involvement in falsifying documents to mask the origin of Iranian commodities.

Key Individuals and Organizations:

  1. Hamed Dehghan and Mehdi Ebrahimzadeh-Ardakani (PKGB): Designated individuals actively involved in procuring U.S. and Western-origin items with UAV applications.
  2. Rostam Ghasemi, Kasim Oztas, and Sitki Ayan: Designated individuals and entities associated with IRGC-QF commodity sales.

Legal Basis and Sanctions:

  • The action is taken pursuant to Executive Order (E.O.) 13382, targeting proliferators of weapons of mass destruction and their means of delivery.
  • Data from Treasury’s Financial Crimes Enforcement Network (FinCEN) enabled the designation.

Implications and Enforcement:

  • Designated entities’ property in the U.S. or controlled by U.S. persons must be blocked and reported to OFAC.
  • Transactions involving property of blocked entities are prohibited for U.S. persons.
  • Foreign financial institutions facilitating significant transactions for the designated entities may face U.S. sanctions.

Conclusion: The U.S. Department of Treasury’s sanctions against the transnational procurement network shed light on efforts to disrupt the illicit supply chain supporting Iran’s ballistic missile and UAV programs. By targeting key entities and individuals involved in procurement activities, the U.S. aims to curtail Iran’s proliferation of advanced weaponry, emphasizing the commitment to safeguard regional stability.

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