BIS, Treasury Add New Export Controls, Sanctions on Iran in Response to Israel Attack

The U.S. announced on April 18 a new package of export controls and sanctions against Iran and its activities that support Russia’s war effort, in retaliation for Iran’s attack five days earlier on Israel.

“Less than a week ago, Iran launched one of the largest missile and drone attacks the world has ever seen against Israel,” said President Joe Biden in a statement. “Together with our allies and partners, the United States defended Israel. We helped defeat this attack. And today, we are holding Iran accountable -- imposing new sanctions and export controls on Iran.”

The Bureau of Industry and Security’s export control final rule expands a list of low-technology items that are EAR99 but that have military uses, making them subject to controls on their export to Iran, as well as to foreign direct product rules on Iran, Russia, Belarus and Russian-occupied Crimea.

It adds to the Supplement No. 7 to Part 146 of the Export Administration Regulations the remaining 39 six-digit Harmonized System codes that hadn’t yet been added from the 50-item Common High Priority List that BIS coordinates with the EU, Japan and the U.K.

The 39 HS codes are: 845710, 845811, 845891, 845961, 846693, 847180, 848210, 848220, 848230, 848250, 848610, 848620, 848640, 850440, 851769, 852589, 852990, 853400, 853669, 853690, 854110, 854121, 854129, 854130, 854149, 854151, 854159, 854160, 854320, 880730, 901310, 901380, 901420, 901480, 902750, 903020, 903032, 903039 and 903082.

Those items already require licenses to Russia and Belarus, and “are prohibited for export or reexport to Iran under § 746.7(e) of the EAR,” BIS said. But their addition to the EAR supplement now means the goods are covered by the foreign-direct product rules. “BIS jurisdiction over foreign produced items in these categories will be expanded, which will in turn expand license requirements,” the agency said.

While the final rule takes effect April 18, it includes a savings clause that allows “items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on April 18, 2024,” to continue to their destination under their previous eligibility, “provided the export, reexport, or transfer (in-country) is completed no later than on May 20, 2024.”

“Today’s action will cut off a wider range of items from reaching Iran’s arsenal -- including items manufactured outside the U.S. that are produced using U.S. technology,” BIS said in a news release. “These changes build on BIS’s comprehensive export restrictions on Iran, which already include controls targeting Iran’s involvement in supplying Unmanned Aerial Vehicles (UAVs) in support of Russia’s illegal war in Ukraine.”

The Office of Foreign Assets Controls’ sanctions designations target “16 individuals and two entities enabling Iran’s UAV production,” as well as “three subsidiaries of Iranian automaker Bahman Group, which have continued to materially support” Iran’s Islamic Revolutionary Guard Corps and “other entities designated pursuant to counterterrorism authorities,” an OFAC news release said.

Specifically, OFAC is designating Iran-based Mohammad Sadegh Abutalebi, CEO of Iran-based UAV manufacturer Oje Parvaz Mado Nafar Co., as well as Ali Asghar Abutalebi, a member of the company’s board. It’s also designating Aseman Pishraneh Co. Ltd., a company that “services the small aircraft engine models used in several types of Iranian UAVs,” and its managing director, Ali Habibi Najafi.

The designations also target several senior members of Islamic Revolutionary Guard Corps-Qods Force ”active in UAV testing, development, and supply” -- Abbas Sartaji, Mehdi Ghaffari Naghneh, Hasan Arambunezhad, Hadi Jamshidi Zavaraki, Reza Nahar Dani and Abolfazl Ramazanzadeh Moshkani -- as well as several executives and employees of Kimia Part Sivan Co., which has “worked with the IRGC-QF to improve the IRGC-QF’s UAV program.” They are Ali Reza Nurian Ramsheh, Mohsen Sayyadi Turanlu, Mohammad Sadegh Fatehi, Hamid Hajji Ebrahimi Forushani, Ali Asghar Al-Taf and Esma’il Azizkhani.

OFAC also designated PSI DMCC, Kara Industrial Trading GmbH and Good Run Limited, which are affiliates of Khouzestan Steel Company, and Magellanic Phoenix Marine and Trading Limited and HSF Dis Ticaret Limited Sirketi, which both source steel from the already-designated steel producer.

Finally, OFAC is designating Bahman Diesel Co., a subsidiary of the already designated Bahman Group that produces heavy trucks, as well as Bahman Group subsidiaries Iran Docharkh Co. and Iran Chassis Manufacturing Co.

Also on April 18, the U.K. added seven individuals and six entities to its Iran sanctions regime for their role in the recent attack on Israel, according to a notice from the Office of Financial Sanctions Implementation. The individuals include employees of Iranian defense firms Aerospace Industries Organisation, Shahid Hemmat Industries Group and Shahid Bagheri Industrial Group. The listed entities are Aseman Pishraneh Engineering Services Co., General Staff of the Armed Forces of the Islamic Republic of Iran, Islamic Revolutionary Guard Corps Navy, Khatam-Al Anbiya Central Headquarters, Mahtabal and Sarmad Electronic Sepahan Co.

“Today, in coordination with the United Kingdom and in consultation with partners and allies, we are taking swift and decisive action to respond to Iran’s unprecedented attack on Israel,” Treasury Secretary Janet Yellen said in the release. “We’re using Treasury’s economic tools to degrade and disrupt key aspects of Iran’s malign activity, including its UAV program and the revenue the regime generates to support its terrorism.”