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US Sanctions Hit Iranian UAV Procurement Network

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced new sanctions targeting six entities based in Hong Kong and the People’s Republic of China (PRC) for their role in supplying Iran’s unmanned aerial vehicle (UAV) program. These companies have been identified as key facilitators in acquiring critical UAV components for the OFAC-designated Iranian firm Pishtazan Kavosh Gostar Boshra (PKGB) and its subsidiary, Narin Sepehr Mobin Isatis (NSMI).

These front companies serve as intermediaries for PKGB, ensuring that Iran continues to source essential technology despite previous sanctions. Today’s action builds upon prior designations that aimed to disrupt Iran’s UAV and ballistic missile programs. This latest move aligns with the broader U.S. strategy to counter Iran’s destabilizing influence in the region.

“Iran continues to try to find new ways to procure the key components it needs to bolster its UAV weapons program through new front companies and third-country suppliers,” said Secretary of the Treasury Scott Bessent. “Treasury remains committed to disrupting the schemes that enable Iran to send its deadly weapons abroad to its terrorist proxies and other destabilizing actors.”

Sanctions Under Executive Order 13382

OFAC’s latest sanctions fall under Executive Order (E.O.) 13382, which targets proliferators of weapons of mass destruction (WMD) and their means of delivery. These measures are intended to prevent Iran from acquiring sensitive technologies that support its military programs.

PKGB was previously designated under E.O. 13382 in 2019 due to its connections with Hamed Dehghan, the company’s CEO and chairman, who played a central role in facilitating the procurement of military-grade electronic components. Additionally, NSMI was designated in February 2024 for its involvement in Iran’s UAV supply chain.

The latest action expands on the February 2024 designation that targeted PKGB’s Hong Kong-based procurement network. This move seeks to counter PKGB’s efforts to circumvent restrictions by establishing new front companies to continue acquiring critical UAV components from international suppliers.

Front Companies Fueling Iran’s UAV Program

Despite previous sanctions, Iran has continued to adapt, creating new procurement networks to acquire Western-origin UAV components. The newly designated entities include:

Dingtai Industrial Technology Co Limited (Dingtai) – A Hong Kong-based firm that has procured U.S.-origin UAV parts, including valve assemblies, radio frequency (RF) connectors, and engines, on behalf of PKGB.
Yonghongan Trade Limited (Yonghongan) – A front company used to procure Western-origin aircraft components. This entity has collaborated with previously sanctioned firms, including Advantage Trading Company Limited and Duling Technology Limited.
Hong Kong Tianle International Co Limited (Tianle) – A facilitator for price quotes and procurement of U.S.-origin electronic components used by Rastafann Engineering Company and other Iranian military-linked entities.

These companies play a crucial role in enabling Iran’s UAV production by obfuscating supply chains, misrepresenting transactions, and engaging in deceptive financial practices.

PRC-Based Entities Supporting Iranian UAV Procurement

In addition to the Hong Kong-based firms, PRC-based entities have also been implicated in supplying UAV-related technology to Iran. Notable among them are:

DDC Develop Industry Hong Kong Limited (DDC Develop) – Responsible for shipping UAV engines to NSMI.
Shenzhen Zhiyu International Trade Co Ltd (Shenzhen Zhiyu) – A supplier of production and testing equipment critical to Iran’s UAV development efforts.
JP Oriental International Holdings Limited (JP Oriental) – A company involved in long-term shipments of key UAV components to NSMI.

All three companies have been designated under E.O. 13382 for their direct involvement in Iran’s illicit UAV supply chain.

Implications of the Sanctions

These designations have immediate legal and financial consequences. As a result of today’s action:

All property and interests in property of the designated entities that are under U.S. jurisdiction are frozen.
U.S. persons and entities are prohibited from engaging in transactions with the sanctioned firms.
Any companies owned 50% or more by these sanctioned entities are also subject to asset freezes and trade restrictions.

Failure to comply with these sanctions could result in severe civil or criminal penalties. Additionally, financial institutions and other international entities risk exposure to secondary sanctions if they engage in transactions with the designated firms.

The Broader Impact on Iran’s UAV and Ballistic Missile Programs

Iran’s UAV program has been a focal point of international concern due to its deployment of drones in conflict zones across the Middle East. The country has provided UAVs to terrorist organizations and proxy groups, escalating regional tensions.

By targeting procurement networks, the U.S. aims to disrupt Iran’s ability to sustain and expand its UAV capabilities. These efforts underscore the broader strategy to counter Iran’s influence and limit the proliferation of advanced military technologies.

Conclusion

The Treasury’s latest sanctions reinforce the United States’ commitment to preventing Iran from acquiring critical UAV components. By dismantling procurement networks operating through Hong Kong and the PRC, the U.S. seeks to disrupt Iran’s military-industrial supply chain.

While Iran continues to find alternative methods to evade restrictions, sustained international cooperation is essential to curbing its UAV program. As the U.S. intensifies its enforcement measures, financial institutions and global suppliers must remain vigilant to avoid unwittingly contributing to Iran’s illicit activities.