UK: OFAC Sanctions Entities And Individuals Supporting Iran's UAV And Military Aircraft Production

On September 27, 2023, the U.S. Department of the Treasury's Office of Foreign Assets Control (“OFAC”) sanctioned five entities and two individuals based in the Islamic Republic of Iran (“Iran”), the People's Republic of China (“China”), Hong Kong, Türkiye, and the United Arab Emirates (“UAE”) involved in the procurement of sensitive parts for Iran's one-way attack unmanned aerial vehicle (“UAV”) program. This network has facilitated shipments and financial transactions in support of the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization's (“IRGC ASF SSJO”) procurement of servomotors, a critical component used in Iran's Shahed-series UAVs. Per OFAC, Iran has been supplying the Russian Federation (“Russia”) with Shahed-136 UAVs to support Russia's invasion of Ukraine.

This action is taken pursuant to Executive Order (“E.O.”) 13382, which builds on OFAC's November 15, 2022, designation of Iran's Shahed Aviation Industries Research Center, a firm subordinate to the IRGC ASF that designs and manufactures the Shahed-136 one-way attack UAV that Iran has supplied to Russia.

OFAC designated Iran-based Pishgam Electronic Safeh Company (“PESC”), stating that PESC has procured thousands of servomotors with one-way attack UAV applications for IRGC ASF SSJO. OFAC also designated Iran-based Hamid Reza Janghorbani (“Janghorbani”),who serves as the Chief Executive Officer of PESC for acting or purporting to act for or on behalf of PESC.

OFAC further designated Hongkong Himark Electron Model Limited (“Hongkong Himark”) for having fulfilled several servomotor orders worth more than $1 million for PESC in Iran, with PRC-based Hongkong Himark official Fan Yang (“Fan”) representing Hongkong Himark in these sales. Fan was designated for acting or purporting to act for or on behalf of, directly or indirectly, Hongkong Himark.

OFAC also designated three entities for having provided, or attempting to provide, financial, material, technological, or other support for, or goods or services in support of, PESC. Türkiye-based firms Dal Enerji Madencilik Turizm Sanayi Ve Ticaret Anonim Sirketi (“Dal Enerji”) and Anka Port Ic Ve Dis Ticaret INSAAT Lojistik Sanayi Limited Sirketi (“Anka Port”) were designated for having facilitated financial transactions totaling hundreds of thousands of dollars in support of PESC's servomotor procurement from Hongkong Himark. OFAC also designated UAE-based Farhad Ghaedi Goods Wholesalers LLC (“Farhad Ghaedi”) for having facilitated the shipment of thousands of servomotors through Dubai for onward delivery to PESC in Iran.

In addition to the above sanctions, OFAC, on September 19, 2023, sanctioned seven individuals and four entities based in Iran, China, Russia and Türkiye in connection with Iran's unmanned aerial vehicle and military aircraft development. This network has facilitated financial transactions and shipments in support of the U.S. designated Iran Aircraft Manufacturing Industrial Company's (“HESA's”) UAV and military aircraft production, procurement and maintenance activity. This action was taken pursuant to Executive Order (“E.O.”) 13382, which targets proliferators of weapons of mass destruction or their means of delivery and their supporters.

HESA, a UAV manufacturer, was designated pursuant to E.O. 13382 for being owned or controlled by Iran's Ministry of Defense and Armed Forces Logistics and for having provided support to Iran's IRGC. As of 2022, HESA has used the name Shahin Co. in contracts with overseas-based suppliers in an apparent effort to evade U.S. sanctions and export controls. Because HESA continues to procure sensitive UAV components under this name, OFAC is updating HESA's entry on the SDN List to include Shahin Co. as an alias. OFAC also sanctioned three individuals participating in various levels of HESA's management.

OFAC also designated China-based Shenzhen Jiasibo Technology Co., Ltd. (“Shenzhen Jiasibo”), which is operated by the previously-designated Yun Xia Yuan (“Yun”), due to its support for HESA. Yun has used Shenzhen Jiasibo, in conjunction with her other previuosly-designated firms, S&C Trade PTY Co., Ltd. (“S&C Trade”) and Shenzhen Caspro Technology Co., Ltd. (“Shenzhen Caspro”), to facilitate the supply of aerospace-grade radar altimeter systems, GPS and VHF antennas, sensors, and other hardware with UAV applications to HESA. China-based Su Chunpeng (“Su”) serves as the managing director and owner of Shenzhen Jiasibo, and designated for acting for or on behalf of, directly or indirectly, Shenzhen Jiasibo.

Per OFAC, China-based Guilin Alpha Rubber and Plastics Technology Co., Ltd (“Guilin Alpha”), was designated for having facilitated the sale and shipment of thousands of aerospace components worth over a million dollars to HESA. China-based Dong Wenbo (“Dong”), who has represented Guilin Alpha in the sale of aircraft brake disks to HESA, was designated pursuant to E.O. 13382 for acting or purporting to act for or on behalf of, directly or indirectly, Guilin Alpha.

Russia-based Delta-Aero Technical Service Center LLC was designated for having supplied propellers and tires to HESA for its AN-140 aircraft, which HESA has outfitted for military use. Russia-based Joint Stock Company Scientific Production Enterprise Aerosila was designated for having performed ground and flight tests for HESA and facilitated the supply of auxiliary power units for the Iran-based firm. Russia-based Joint Stock Company Star was designated for having contracts with HESA to overhaul components of HESA's AN-140 aircraft.

OFAC also designated Türkiye-based money exchangers Mehmet Tokdemir and Alaaddin Aykut for having facilitated U.S. dollar- and euro-denominated financial transactions worth hundreds of thousands of dollars in support of HESA's procurement from various suppliers, including China-based Hanghzou Fuyang Koto Machinery Co., Ltd. (“Koto Machinery”). Koto Machinery was designated for having facilitated the sale and shipment of light aircraft engines applicable for Iran's Shahed-series UAVs to HESA.

As a result of this action, all property and interests in property of the individuals and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons are prohibited.

These OFAC designations demonstrate OFAC's continued focus on entities and individuals are perceived to be acting in support of Russia's war in Ukraine. They also demonstrate OFAC's willingness to designate one entity, and then immediately designate other entities for their previous interactions with this newly designated SDN. Therefore, in order to decrease the likelihood of being designated by OFAC and maintain compliance with U.S. sanctions, companies and other entities should consider the future designation risk, alongside the current designation status, of business parties with whom substantial dealings will occur.

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