Iran Watch Newsletter: July 2020

July 31, 2020

Publication Type: 

  • Newsletters

This month’s newsletter includes a new Iran Watch podcast about the techniques that Iranian vessels use to transport illegal goods and evade sanctions. Two experts from the U.S. State Department explain how the United States has been working to combat these tactics. The newsletter also features analysis of efforts by two exporters to send U.S.-origin goods to key industries in Iran, in violation of sanctions.  

In addition, the newsletter includes documents from the Iran Watch library about an explosion at the Natanz nuclear complex, a dispute about the Joint Comprehensive Plan of Action (JCPOA) between Iran and a trio of European countries, profiles of Iran’s Ministry of Defense and shippers that transport illicit goods on its behalf, and news about an Iranian military drill and the activities of an Iranian state-owned enterprise in Venezuela. 

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Iran Watch Publications:
 

How to Prevent Iran from Evading Sanctions at Sea

In the inaugural episode of Iran Watch’s podcast—Iran Watch Listen—we discuss the impact of a recent U.S. government maritime advisory on Iran’s ability to evade U.S. sanctions with two experts from the U.S. State Department: Blake Pritchett, the Deputy Director of the Office of Economic Sanctions Policy and Implementation, and Jen Chalmers, Chief of the Disruption Operations and Transport Team in the Office of Counterproliferation Initiatives. We discuss the deceptive shipping practices used by Iran, recent outreach by the U.S. government to industry on how to counter these practices, and relevant industries’ response. We also highlight how Iran smuggles goods ranging from arms to oil at sea.

Listen to the podcast here, and subscribe to Iran Watch Listen on Apple PodcastsSpotifyStitcher, or wherever you get your podcasts.

How Iran’s Oil Industry Gets American Machinery

Iran’s most notorious attempts to smuggle goods from the United States involve complex procurement networks seeking items for nuclear, missile, and military programs. Often, however, Iran employs these networks to serve key industries. Recent U.S. enforcement cases against two exporters highlight this trend. Over the course of a decade, these exporters used front organizations, falsified documents, and shipped products through third countries to supply Iran’s petroleum industry, in violation of U.S. trade restrictions.

Read an analysis of this enforcement action here.

Iran Watch Library:
 

In response to criticism by France, Germany, and the U.K. at the IAEA, Iran triggers JCPOA dispute resolution mechanism: 

Entities of Proliferation Concern:
 

E-Sail Shipping Company
A Shanghai-based shipping company and wholly-owned subsidiary of Islamic Republic of Iran Shipping Lines (IRISL), which has provided logistical services to Iran's Ministry of Defense Armed Forces Logistics (MODAFL).

Islamic Republic of Iran Shipping Lines (IRISL)
An Iranian state-owned enterprise involved in transporting prohibited military-related cargo and facilitating shipments on behalf of and destined for MODAFL and its subordinates. 

Ministry of Defense and Armed Forces Logistics (MODAFL)
Iran’s defense ministry; responsible for military-related research, development, and manufacturing, including support for Iran’s missile and nuclear programs.

In the News:
 

July 28: The Islamic Revolutionary Guard Corps (IRGC) Aerospace Force and Navy began the "Great Prophet 14" military exercise in the province of Hormozgan. The drill involves drone, missile, and radar units from the IRGC Aerospace Force and units specializing in drones, missiles, and ships from the IRGC Navy. The Noor 1 military satellite, which the IRGC put into orbit in April using a three-stage Qased launch vehicle, will monitor the exercise.

July 5: Etka, an Iranian company subordinate to the Iranian Ministry of Defense and Armed Forces (MODAFL) and tied to the Islamic Revolutionary Guard Corps (IRGC) has established a retail supermarket in Venezuela. Etka is supporting a military-run emergency food program that Colombia, Mexico, and the United States have described as a front for money laundering. Etka's chief executive, Issa Rezaie, has held positions at several IRGC-owned companies. Ekta was originally set up as a social security trust for Iranian military veterans.

July 5: Iranian officials acknowledged that an explosion at the Natanz nuclear complex caused significant damage and set the country's nuclear program back by months. The explosion took place at a warehouse where advanced centrifuges are assembled, according to a spokesman for the Atomic Energy Organization of Iran. The spokesman said that the warehouse held "advanced equipment and precision measurement devices" that were "either destroyed or damaged," which may "slow down the development and expansion of advanced centrifuges." A Middle Eastern intelligence officer and a member of the Islamic Revolutionary Guard Corps (IRGC) asserted that the explosion was caused by a bomb. Israel may be responsible for the attack; Israeli officials neither confirmed nor denied involvement.