During the past several months, the U.S. Departments of State and the Treasury have placed sanctions on several Iranian entities that they claim have engaged in activities related to Tehran’s nuclear and ballistic missile programs. Meanwhile, the international community has moved forward in implementing other sanctions on Iran that were imposed in UN Security Council resolutions.
In June 2005, President George W. Bush authorized the Treasury Department in Executive Order 13382 to freeze the U.S. assets of foreign entities suspected of supplying or supporting the development of unconventional arms and ballistic or cruise missile programs. (See ACT, September 2005. ) The order bars U.S. citizens, companies, and institutions from doing business or facilitating transactions with sanctioned entities, a term that encompasses individuals, private companies, or government agencies. Other foreign entities that do business with those already sanctioned risk being penalized as well.
The Treasury Department recently added a total of seven Iranian entities in three separate announcements. The first announcement was in April, the second and third in June. Earlier this year, the department added nine entities to the list, six of which were Iranian. (See ACT, March 2007. )
The U.S. government has designated a total of 43 entities under the executive order; 20 are Iranian. Of those, 15 are subsidiaries of five other entities.
Whether any of these designees have any assets under U.S. jurisdiction is unclear. Treasury Department spokesperson Molly Millerwise told Arms Control Today June 28 that the department does not disclose such information. Asked whether the assets belonging to subsidiaries of designated parent entities also are frozen, Millerwise explained that “all of” a designated company’s “property and interests in property are blocked. Depending on the facts and circumstances, its investments in other companies may be considered blocked property.”
Almost all of the recently designated entities are listed in an annex to UN Security Council Resolution 1737, which was adopted last December. The two exceptions are Iran’s Aerospace Industries Organization and a related entity, Mizan Machine Manufacturing Group. The resolution imposed a series of sanctions on Iran, including restrictions on importing and exporting a variety of goods and technologies related to Tehran’s nuclear and missile programs. (See ACT, April 2007. )
On April 3, the State Department designated Iran’s Defense Industries Organization under the executive order for activities “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,” according to an announcement in the Federal Register. The State Department provided no details, but the annex to Resolution 1737 describes the Defense Industries Organization as an “overarching” entity controlled by Iran’s Ministry of Defense and Armed Forces Logistics. Some of the organization’s “subordinates” have been involved in Iran’s centrifuge and missile programs, according to the annex. The April 3 designation was the first such action by the State Department under the executive order.
On June 8, the Treasury Department designated two companies, Pars Tarash and Farayand Technique, for their involvement with Iran’s gas centrifuge-based uranium-enrichment program. There is widespread concern within the international community that this program could be used to produce fissile material for nuclear weapons. Tehran maintains that the program is exclusively to produce fuel for nuclear reactors (see page 26 ).
The companies are connected to Iran’s Atomic Energy Organization, the Kalaye Electric Company, or both, according to a department press release.
Bush included the Atomic Energy Organization, which the Treasury Department describes as “the main Iranian institute for research and development activities in the field of nuclear technology,” in an annex to the original 2005 executive order. The Kalaye Electric Company, a subsidiary of the organization, was similarly designated in February 2007. (See ACT, March 2007. )
On June 15, the department designated two individuals, Mohammad Qannadi and Ali Hajinia Leilabadi. According to a department press release issued that day, Qannadi and Leilabadi act or purport to act “for or on behalf of” Iran’s Atomic Energy Organization and the Mesbah Energy Company respectively. The Mesbah Energy Company is an Atomic Energy Organization “subordinate,” which the Treasury Department designated in January 2006.
Mesbah Energy Company has been used to “procure products for Iran’s heavy water project,” the press release stated. Iran is constructing a heavy water-moderated nuclear reactor and an associated heavy-water plant. The annex to Resolution 1737 describes the company as a “provider” for the reactor project. The United States and other countries suspect that the reactor could be used to produce plutonium for fissile material in nuclear weapons.
The United States also has targeted entities involved in Iran’s ballistic missile program. On June 8, the Treasury Department designated Fajr Industries Group and Mizan Machine Manufacturing Group under the 2005 executive order. Both are connected to Iran’s Aerospace Industries Organization, according to the department.
The Aerospace Industries Organization, which was also identified in the original executive order’s annex, “is a subsidiary of the Iranian Ministry of Defense and Armed Forces Logistics, and is the overall manager and coordinator of Iran’s missile program.”
Both of the newly designated entities are involved in procuring equipment and materials for Iran’s ballistic missile program, according to the department, whose June 8 press release provided some details about these activities.
For example, it stated that Fajr Industries Group “has consistently procured a wide range of missile guidance and control equipment on behalf of” the Aerospace Industries Organization. Since the late 1990s, the company has “purchased high strength steel alloy, useful for guidance equipment in ballistic missiles,” the press release said.
For its part, the Mizan Machine Manufacturing Group purchased in April 2005 “a state-of-the-art crane…probably intended for use in Iran’s Shahab missile program,” the press release says, adding that such cranes “can be used to support missiles…in the field or at storage facilities.” The Shahab-3 is the longest-range missile that Iran has deployed to date. (See ACT, January/February 2007. )
Additionally, the company acted on behalf of the Shahid Hemmat Industrial Group, a “subordinate entity” of the Aerospace Industries Organization, to acquire equipment “that could be used to calibrate guidance and control instruments for more accurate [ballistic missile] targeting.”
State Department Sanctions
Earlier this year, the State Department imposed sanctions on 31 entities under the Iran and Syria Nonproliferation Act for unspecified transfers of items, either to or from Iran or Syria, related to weapons of mass destruction, certain conventional weapons, and ballistic or cruise missiles.
For two years, the sanctioned entities will be prohibited from receiving U.S. government contracts, assistance, or military trade, as well as any goods controlled by the 1979 Export Administration Act, which regulates exports that have both civilian and military purposes. The State Department provided no details about the entities’ activities.
According to announcements published in the Federal Register Jan. 5 and April 23, two dozen entities located in 10 countries were sanctioned in January; 13 entities located in seven countries were sanctioned in April. The State Department in April also sanctioned Hezbollah, a foreign terrorist organization.
Of the penalized entities, four were Iranian. One of these, the Sanam Industrial Group, also is designated under Resolution 1747, which contains an annex similar to that of Resolution 1737. The council adopted Resolution 1747 March 24. Iran’s Defense Industries Organization was sanctioned both in January and April.
Except for Hezbollah, the other entities are located in 10 other countries: China, Iraq, Malaysia, Mexico, North Korea, Pakistan, Russia, Singapore, Sudan, and Syria. Six of these entities were sanctioned both in January and April.
Implementation of UN Sanctions Continues
Belgium’s UN permanent representative Johan Verbeke, who chairs the committee overseeing the sanctions imposed on Iran, gave a progress report to the Security Council June 21. The Security Council set up the committee to monitor countries’ compliance with Resolutions 1737 and 1747.
Verbeke said that the committee, which is required to report to the Security Council every 90 days about its progress, has received reports from 50 states and the European Union regarding their implementation of Resolution 1747. That resolution called on all countries to report on their implementation of the sanctions within 60 days.
A total of 73 countries have submitted reports regarding their implementation of Resolution 1737, he added. As of March 23, some 51 states and the EU had done so, Verbeke reported at the time. The United Nations has a total of 192 member states. (See ACT, May 2007 .)In addition to receiving governments’ reports, the committee adopted guidelines May 30 for implementing the resolutions, Verbeke said.