On September 8, 2022, the US Department of the Treasury’s Office of Foreign Assets Control designated 1 individual and 4 entities for assisting Russia in its war against Ukraine by participating in the research, development, production, and shipment of Iranian Unmanned Aerial Vehicles (UAVs) and UAV components for Russia, including the Shahed series of drones that were developed for Iran’s Islamic Revolutionary Guard Corps (IRGC) and the IRGC Aerospace Force (IRGC ASF) and Navy. The US designated the IRGC in 2007 pursuant to the weapons of mass destruction nonproliferation authority, Executive Order 13382, for its role in Iran’s ballistic missile program, and designated the IRGC in its entirety, including the IRGC ASF and Navy, in 2013 pursuant to EO 13382.
OFAC designated the Paravar Pars Company, the Design and Manufacturing of Aircraft Engines (DAMA), and Baharestan Kish Company, three Iran-based companies that were either involved in the development and production of UAVs for the IRGC-owned Shahed-171 UAV program or involved in the manufacture of Shahed UAV components. OFAC also designated Rehmatollah Heidari, the managing director and member of the board of directors of the Baharestan Kish Company. Heidari and the 3 entities were designated by OFAC pursuant to EO 13382 – Heidari for acting on behalf of Baharestan Kish; Paravar Pars for supporting the IRGC ASF; and DAMA and Baharestan Kish for supporting the IRGC. OFAC also designated an Iran-based air transportation service provider, Safiran Airport Services, for coordinating the transport of Iranian UAVs, personnel, and related equipment from Iran to Russia. Safiran was designated by OFAC pursuant to EO 14024 for acting on behalf or in support of the Government of the Russia Federation.
As a result of these designations, all property and interests in property of these designees within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving the designated persons. In addition, any foreign financial institution that knowingly facilitates a significant transaction for a sanctioned person could have its access to the U.S. financial system severed.
On September 8, 2022, OFAC also issued General License 13B pursuant to the Russian Harmful Foreign Activities Actions Regulations, 31 CFR part 587. GL 13B temporarily authorizes certain administrative transactions, including the payment of taxes/fees/import duties and the purchase or receipt of permits licenses, registrations or certifications, which would otherwise be prohibited by Directive 4 issued under Executive Order 14024, provided that the transactions facilitate the “day-to-day operations” of US persons or entities in the Russian Federation. GL 13B expires on December 7, 2022, and effectively replaces and supersedes GL 13A.
Directive 4 was issued by OFAC pursuant to EO 14024 to prohibit US person from engaging in transactions involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, and the transfer of assets to these entities or on their behalf, without first obtaining a license or authorization from OFAC.