On June 6, 2023, US Department of the Treasury’s Office of Foreign Assets Control sanctioned a network of seven individuals and six entities from Iran, the People’s Republic of China (“PRC”) and Hong Kong for facilitating financial transactions and procuring critical parts and technology for Iran’s ballistic missile program. OFAC also designated Davoud Damghani, Iran’s Defense Attaché in Beijing for coordinating defense-related procurements from the PRC for end-users in Iran, including subsidiaries of Iran’s Ministry of Defense and Armed Forces Logistics (“MODAFL”). The MODAFL is a government entity that was designated by the US in 2007 pursuant to Executive Order 13382 for materially contributing to the proliferation of weapons of mass destruction or their means of delivery. All of the new designees were sanctioned by OFAC pursuant to EO 13382.
OFAC reports that the main beneficiary of this international procurement network is Parchin Chemical Industries (“PCI”), a MODAFL subsidiary that produces ammunition, explosives and solid propellants for rockets. PCI was designated by the US in 2008 under EO 13382. Among the newly-designated entities are Zhejiang Qingji Ind. Co., Ltd, a PRC-based company that has allegedly sold centrifuges and related equipment to PCI, Hong Kong Ke.Do International Trade Co., Limited, and Quingdao Zhongrongtong Trade Development Col, Ltd. based in the PRC, that together have reportedly sold tens of millions of dollars’ worth of dual-use, nonferrous metals to PB Sadr, a US-designated entity that serves as a key intermediary for the PCI and its procurement of missile propellant parts. OFAC also designated certain employees, front companies and affiliates of these three entities.
As a result of these designations, all property and interests in property of the 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.