On March 9, 2022, the US Department of the Treasury’s Office of Foreign Assets Control designated the members of a network based in the People’s Republic of China for supporting Iran’s efforts to procure unmanned aerial vehicles (“UAVs”). OFAC reports that the network, comprised of 5 companies and 1 individual, has facilitated the sale and shipment of thousands of aerospace components worth millions of dollars for the Iran Aircraft Manufacturing Industrial Company (“HESA”), a previously-sanctioned company involved in the production of the Shahed-136 UAVs that Iran has exported to Russia and have been used by Iran to attack oil tankers. According to OFAC, some of the components obtained by the network can be used for UAV applications. HESA was designated in 2008 pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction and their supporters. According to OFAC, the 6 members of the PRC-based network have also been designated pursuant to EO 13382. OFAC also reports that this is the sixth round of sanctions that the US has imposed in connection with production and transfer of Iranian UAVs.
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 US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons. In addition, entities owned 50 percent or more by one or more blocked persons are also blocked.