US Issues New Iran Sanctions, Guidance on Procurement Risks

The U.S. this week sanctioned 11 people, eight entities and one vessel with ties to Iran’s ballistic missile and drone programs. The Treasury, Commerce and State departments, along with DOJ, also published a new advisory to alert global companies about Iran’s ballistic missile procurement activities.

The advisory outlines “deceptive techniques” used by Iranian procurement agents to hide the identity of end users, a list of “key goods” sought by Iran, a list of entities that are connected to Iran’s missile program and a description of various U.S. sanctions authorities.

Iran uses an “extensive overseas network of procurement agents, front companies, intermediaries, and suppliers” to procure dual-use goods, the advisory said, some of whom falsify end-use documentation and shipment details, route shipments through several countries to evade sanctions and use other “deceptive tactics to access the U.S. and international financial systems.”

Through “transaction layering,” Iranian agents route shipments, communications and funds through several layers of companies and intermediaries that “provide buffering between an unwitting” manufacturer or supplier and the Iranian end user, the agencies said. The number of layers can vary by “procurement attempt,” the advisory said.

The U.S. also is seeing Iranian agents falsify documents, such as shipping documentation, bills of lading and shipping invoices “at any stage during shipment.” Some sensitive items may be mislabeled by Iranian procurement agents as “general-purpose goods that are widely available commercially,” which helps the shipments avoid “extra scrutiny by port or shipping officials.” Some may also consolidate and repackage items for “onward shipment to Iran, hiding the true end user from the manufacturers and distributors of the items.”

These shipments are often routed through third countries, the advisory said, and the shipping documentation may list a company in a third country as the ultimate end-user. But after receiving the consignment, the third-party company will “ship directly to Iran or ship through another foreign-based company for subsequent shipment to Iran.”

The advisory also pointed to the “deceptive methods” Iranian procurement agents use to access the international and U.S. financial systems. These agents “generally establish and utilize a complex and long-standing network of front and shell companies outside of Iran or use aliases to mask the origin and true purpose of the funds,” the advisory said. These companies are used to establish multiple bank accounts in foreign nations, and “use the international banking system to generate funds and facilitate transactions that either finance or provide supplies benefiting the regime and its weapons programs.”

The advisory includes several goods Iran is specifically seeking to purchase for its missile program, including various production and testing equipment, metal products, various electronics, and advisory, navigation and control equipment.

The new designations issued by the Office of Foreign Assets Control target Iran-based Fanavaran Sanat Ertebatat Company, which produces jam-resistant guidance systems for Iran’s Islamic Revolutionary Guard Corps Aerospace Force Self-Sufficiency Jihad Organization, and company directors Armin Ghorsi Anbaran and Hossein Hemsi. Also sanctioned is Iran-based Saberin Kish Company, which procures components for the IRGC, and Alireza Matinkia, an Iran-based procurement agent.

OFAC also said China-based Lin Jinghe, also known as Gary Lam, has helped Matinka procure U.S.-, Japanese-, Swiss-, Taiwanese-, and U.K.-origin dual-use circulators, amplifiers, inductors and other electronic components using Hong Kong-based company Nanxigu Technology Co., Limited. Another company, Hong Kong-based Dali RF Technology Co., Limited, was used on “multiple occasions” in the transferring of funds related to Lin Jinghe’s electronic procurement activities, OFAC said.

The agency also designated Electro Optic Sairan Industries Co. (SAPA), an Iranian company that procures military equipment, and Sarmad Electronic Sepahan Company, another Iranian firm that produces two types of components identified in unmanned aerial vehicles downed by Ukrainian forces.

Also sanctioned was China-based Yongxin Li, also known as Emma Lee, who helped Iran procure various dual-use electronics; Hong Kong-based Yiu Wa Yung, also known as Stephen Yung, who worked on procurement activities; Hong Kong-base electronics distributor ICGOO Electronics Limited; Iran-based QAI, a subsidiary of the Iran Aviation Industries Organization; AIi director Ghasem Damavandian; Iranian defense minister Mohammad-Reza Ashtiani; Iran-based Seyed Hojatollah Ghoreishi, who has helped to negotiate Iranian UAV sales; Iran’s defense attache in Venezuela, Jaber Reihani; and Seyed Hamzeh Ghalandari, who has helped in UAV sales to Venezuela.

The agency also sanctioned cargo vessel Parnia, which has historically been used by Iran’s Ministry of Defense and Armed Forces Logistics for defense exports to other countries. OFAC said the Parnia recently shipped “several Iranian Peykaap III fast attack missile patrol boats to Venezuela.”