The US is imposing sanctions on several companies in connection with Iran's steel industry, alleging that revenue from the sector is used by the Iranian regime to fund "nefarious" activities, the US Treasury Department said Jan. 5.
"The Iranian metals sector is an important revenue source for the Iranian regime, generating wealth for its corrupt leaders and financing a range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for foreign terrorist groups, and a variety of human rights abuses, at home and abroad," the Treasury Department said in a statement.
Under Executive Order 13871, the US is targeting a China-based supplier of graphite electrodes, 12 Iranian metal producers and three foreign-based sales agents of a major Iranian metals and mining holding company.
Kaifeng Pingmei New Carbon Materials Technology (KFCC), the graphite electrode supplier, has completed multiple transactions with various Iranian steel companies since December 2019, the department said, adding that sales included a 300 mt electrode shipment to Iran's Pasargad Steel Complex.
The Treasury Department said the 12 Iranian steel manufacturers now designated under EO 13871 have a combined annual output capacity that "reaches millions of metric tons of steel product."
Middle East Mines and Mineral Industries Development Holding Co. (MIDHCO), the metals and mining holding company, has been designated for owning, controlling, or operating Sirjan Iranian Steel and Zarand Iranian Steel Co. Both companies are included among the 12 designated companies associated with Iran's steel sector.
Three of MIDHCO's foreign-based subsidiaries are also subject to sanctions. The subsidiaries include Germany-based GMI Projects Hamburg, China-based World Mining Industry and UK-based GMI Projects.
As a result of the sanctions, the Treasury Department said all property and interests in property of the designated companies that are in the US or in the possession or control of US persons must be blocked and reported to the department's Office of Foreign Assets Control.
"OFAC's regulations generally prohibit all dealings by US persons or within (or transiting) the US that involve any property or interests in property of blocked or designated persons," the department said. "Persons that engage in certain transactions with the persons designated today by OFAC may themselves be exposed to sanctions."
Furthermore, the US State Department is imposing sanctions on KFCC and Iran-based Hafez Darya Arya Shipping Co. (HDASCO), in accordance with the Iran Freedom and Counter-Proliferation Act of 2012, for selling graphite to Iran-based South Kaveh Steel Co. and Arfa Iron and Steel Co. Both South Kaveh and Arfa are based in Iran and included in the Treasury Department's Specially Designated Nationals List.
Sanctions are also being imposed on HDASCO principal executive officer Majid Sajdeh, the department added.
"The United States will continue to aggressively implement sanctions with respect to the Iranian regime, those who evade sanctions, and others who enable the regime to fund and carry out its malign agenda of repression and terror," the State Department said in a separate statement.
