On December 19, 2023, the US Department of the Treasury’s Office for Foreign Assets Control designated four individuals and ten entities for their participation in a network that supports Iran’s unmanned aerial vehicle (“UAV’) production. According to OFAC, the network, comprised of individuals and entities based in Iran, Malaysia, Hong Kong and Indonesia, is responsible for the procurement of hundreds of thousands of dollars’ worth of components from the United States and abroad for the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization (“IRGC ASF SSJO”) and its UAV program. According to OFAC, the network is led by Iran-based Hossein Hatefi Ardakani, who allegedly contracted with the IRGC ASF SSJO using Iran-based companies that he owns or controls, and funneled foreign defense procurements through front companies in Malaysia, Hong Kong, and other locations.
These designations were issued pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction and their means of delivery. As a result of the 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. Entities owned 50 percent or more by one or more blocked persons are also blocked.
The designations were part of a joint action taken with the US Department of Justice and the Department of Homeland Security to disrupt the international procurement network. Following a multi-year investigation by Homeland Security Investigations, the DOJ announced on December 19, 2023 the unsealing of an indictment charging Ardakani and his codefendant Gary Lam with crimes related to the procurement of US-manufactured dual-use microelectronics for the IRGC ASF SSJO and its UAV program. Lam, whose primary name is Lin Jinghe, was designated by OFAC on October 18, 2023 for his support of an Iran-based procurement agent working on behalf of an IRGC-owned company. In addition to the indictment, a separate but related seizure action was concurrently unsealed that targeted Nava Hobbies SDN BHD and Arta Wave SBN BHD, two of the new OFAC designees. The action enabled the United States to seize more than $800,000 from the companies based on alleged violations of US laws, including US sanctions targeting Iran and money laundering violations.