WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating five entities and one individual based in Iran, Hong Kong, Taiwan, and China for their procurement of technology in support of OFAC-designated Iran Aircraft Manufacturing Industrial Company (HESA). HESA is a state-owned subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) that manufactures Iran’s military aircraft and Ababil‑series unmanned aerial vehicles (UAVs), which have been employed by the Islamic Revolutionary Guard Corps (IRGC). Today’s action is being taken in furtherance of National Security Presidential Memorandum 2, which directs that Iran be denied asymmetric and conventional weapons capabilities, and that the IRGC and its surrogates be disrupted and degraded.
“Iran continues to pursue the development of asymmetric weapons capabilities, including unmanned aerial vehicles, to carry out attacks on the United States, our servicemembers and our partners and allies in the region,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley. “We will continue to put America first by disrupting Tehran’s ability to further its destabilizing agenda that undermines the stability of the region and threatens the safety of the American people.”
Today’s action was taken pursuant to Executive Order (E.O.) 13382, which targets proliferators of weapons of mass destruction (WMD) and their means of delivery. On September 17, 2008, Treasury designated HESA pursuant to E.O. 13382 for being owned or controlled by MODAFL and for providing support to the IRGC. On October 25, 2007, the U.S. Department of State designated MODAFL and the IRGC pursuant to E.O. 13382 for having engaged, or attempted to engage, in activities or transactions that have materially contributed to, or pose a risk of materially contributing to, the proliferation of weapons of mass destruction or their means of delivery.
TARGETING IRANIAN AIRCRAFT AND UAV TECHNOLOGy procurement
Under Javad Alizadeh Hoshyar’s (Alizadeh) direction and management as Chief Executive Officer (CEO), Iran-based Control Afzar Tabriz Co Ltd (Control Afzar) procured computer numerical control (CNC) machines and equipment for HESA. CNC machines are used in high‑end aerospace and defense manufacturing to create precise and durable components for commercial and military aircraft. Control Afzar used Hong Kong-based Clifton Trading Limited (Clifton Trading) as an alternative consignee and intermediary for procurements in the interest of HESA, with the intention of obscuring the involvement of Control Afzar. Control Afzar also used Taiwan-based Mecatron Machinery Co Ltd (Mecatron) and Joemars Machinery and Electric Industrial Co Ltd (Joemars Machinery) to ship CNC machines and equipment to Iran and knowingly circumvent sanctions and export controls. Joemars Machinery established China‑based Changzhou Joemars Industrial Automation Co Ltd (Changzhou Joemars) as a subsidiary.
Control Afzar is being designated pursuant to E.O. 13382 for having provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of, HESA.
Alizadeh is being designated pursuant to E.O. 13382 for being owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, Control Afzar.
Clifton Trading, Mecatron, and Joemars Machinery are being designated pursuant to E.O. 13382 for having provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of, Control Afzar.
Changzhou Joemars is being designated pursuant to E.O. 13382 for being owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, Joemars Machinery.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated or blocked persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.
Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons. OFAC may impose civil penalties for sanctions violations on a strict liability basis. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions. In addition, financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities with designated or otherwise blocked persons.
Furthermore, engaging in certain transactions involving the persons designated today may risk the imposition of secondary sanctions on participating foreign financial institutions. OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a person who is designated pursuant to the relevant authority.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, or to submit a request, please refer to OFAC’s guidance on Filing a Petition for Removal from an OFAC List.
Click here for more information on the persons designated today.
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