The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently announced sanctions against four companies in China, Hong Kong, and Taiwan, accusing them of assisting Iran in producing aggressive unmanned aerial vehicles and procuring technology for the sanctioned Iranian Aircraft Manufacturing Industrial Company (HESA).
HESA is a state-owned enterprise under the Iranian Ministry of Defense and Armed Forces Logistics (MODAFL), responsible for manufacturing military aircraft and the “Ababil” series of drones used extensively by the Islamic Revolutionary Guard Corps (IRGC) in military operations. The Iranian Ministry of Defense, the Revolutionary Guard, and HESA were already sanctioned by the United States in 2007 and 2008.
These sanctions were imposed based on U.S. Executive Order 13382 and National Security Presidential Memorandum 2 signed by President Trump, which prohibits Iran from possessing unconventional and conventional weapons capabilities and mandates the dismantling and weakening of the Islamic Revolutionary Guard Corps and its proxy organizations.
The companies sanctioned this time include Changzhou Joemars Industrial Automation Co., Ltd. in Jiangsu Province, China; Clifton Trading Ltd. on Lockhart Road in Wan Chai, Hong Kong; Mecatron Co., Ltd. and Joemars Machinery Co., Ltd. in Taichung, Taiwan.
These four companies are accused of collaborating with Iran’s Control Afzar company to assist the Iranian military in procuring relevant technology. The OFAC of the U.S. Treasury Department announced last Thursday (July 31) the implementation of “secondary sanctions” against these four entities, Control Afzar, and its CEO Javad Alizadeh Hoshyar.
The Treasury Department indicated that Control Afzar had acquired computer numerical control (CNC) machine tools and equipment for HESA. CNC machine tools are widely used in high-end aerospace and defense manufacturing for producing precise and durable parts for commercial and military aircraft. The four companies from China, Hong Kong, and Taiwan were sanctioned for providing (or attempting to provide) financial, material, technical support, goods, or services to Control Afzar.
The investigation found that Control Afzar used Clifton Trading in Hong Kong as an alternate consignee and intermediary to procure on behalf of HESA, intending to conceal Control Afzar’s involvement in the transactions. Mecatron and Joemars Machinery in Taiwan aided in transporting the CNC machines and equipment to Iran to evade sanctions and export controls.
Changzhou Joemars Industrial Co. from China, being a subsidiary of Taiwan’s Joemars Machinery, or acting on its behalf, was also listed as a target for sanctions.
The U.S. Treasury Department stated that all sanctioned individuals and entities will have their assets and property rights in the U.S. frozen, including companies in which they hold or control a stake of 50% or more. Americans and those within the U.S. are prohibited from engaging in transactions with these frozen entities unless authorized by the Treasury Department or eligible for legal exemptions.
John K. Hurley, Deputy Assistant Secretary for Terrorism and Financial Intelligence at the Treasury Department, emphasized that Iran is continuing to develop unconventional weapons like drones with intentions to attack the U.S., U.S. troops abroad, and regional allies. The U.S. will prioritize defending its interests and continue to counter Tehran’s actions that destabilize the region and threaten the safety of the American people.
The U.S. State Department underscored its commitment to utilizing all available means, including imposing sanctions on entities in third countries, to expose and prevent Iran from acquiring equipment and materials for its drone program.