US lawmakers urge government to investigate 6 companies supporting Iranian enterprises.

The US House of Representatives’ Committee on Issues Regarding the Chinese Communist Party (referred to as the CCP Issues Special Committee) urged the Biden administration on Friday (May 31st) to investigate six Chinese state-owned enterprises suspected of aiding Iran in evading US sanctions.

The chairman of the committee, John Moolenaar, a Republican from Ohio, along with 11 other Republican members, wrote a joint letter to Treasury Secretary Janet Yellen, calling for an investigation into whether these Chinese companies have harmed US strategic interests by supporting Iran’s military and energy sectors.

The six companies identified by the CCP Issues Special Committee are: China North Industries Group Corporation (Norinco), Aviation Industry Corporation of China (AVIC), China Ocean Shipping (Group) Company (COSCO), China National Offshore Oil Corporation (CNOOC), CRRC Corporation Limited (CRRC), and China Petroleum & Chemical Corporation (Sinopec).

Congress members pointed out that the Financial Crimes Enforcement Network (FinCEN) of the Treasury Department should investigate and analyze whether these Chinese state-owned military, oil, and shipping companies and their subsidiaries that have assisted Iran’s energy and military activities through their products and services should be subject to secondary sanctions.

The letter noted that between 2021 and 2023, the US Navy seized 9,000 smuggled Chinese-made “Type 56 rifles” destined for the Houthi terrorist organization in an operation led by Iran’s Islamic Revolutionary Guard Corps (IRGC). This rifle is one of the “most popular” Chinese products manufactured by a subsidiary of Norinco. Last year, US capital markets invested at least $17 million in this subsidiary.

Harbin Aircraft Industry Group, a subsidiary of AVIC, is selling aircraft to the IRGC. US investors have invested $178 million in AVIC through its subsidiary.

In 2019, COSCO was sanctioned for shipping oil from Iran to China. However, the group seems to have continued its activities in Iran by finding more discreet ways to engage. Nine US companies have provided at least $230 million in funding to COSCO.

Additionally, a subsidiary of CNOOC has been involved in projects with Iran’s National Iranian Oil Company, which is under US sanctions. CRRC has cooperated with Iran’s Industrial Development and Renovation Organization and Iran Heavy Diesel Engine Company to provide hundreds of railcars to Iran. Sinopec has helped develop an oil field in Iran and may continue to participate in other development projects. In 2023, US investment firms invested $400 million, $285 million, and $76 million in these three companies respectively.

The Committee released an investigation report on April 19th this year, stating that Wall Street used $6.5 billion of US pension and other funds in 2023 to invest in 63 companies linked to the Chinese military by purchasing stocks of index funds. The six Chinese state-owned enterprises targeted this time are part of this blacklist.

The members of Congress wrote, “Many of these companies may even be engaged in activities that violate existing US sanctions against Iran. Therefore, American retirees may indirectly fund activities that violate US national security and international stability.”

Lawmakers stated that the US must confront the new axis of authoritarian regimes led by the CCP and Iran by sanctioning Chinese companies that aid Iran in supporting Houthi attacks on Red Sea commercial shipping and inciting attacks by Hamas, Hezbollah, and Palestinian Islamic Jihad against Israel. These companies are all part of the US Treasury Department’s sanctions list.