Iran Watch Newsletter: July 2024

July 31, 2024

Publication Type: 

  • Newsletters

This month’s newsletter features an investigation of two illicit procurement agents supplying microelectronics to the Islamic Revolutionary Guard Corps (IRGC) drone program. The report draws on U.S. government and court documents, corporate records, social media, and other information to explain the two agents’ history of collaboration, the tactics they used, and how their respective networks evolved over time.

The newsletter also includes profiles of front companies supporting Iran’s defense cooperation with Russia, including the sale of unmanned aerial vehicles (UAVs), as well as news covering the inauguration of Iranian President Masoud Pezeshkian, Israel’s military strikes on Yemen’s Hodeidah port, and the expansion of two key missile production facilities in Iran. Additions to the Iran Watch library include official statements on the possibility of revived nuclear diplomacy, Western sanctions announcements, and U.S. Department of Justice enforcement cases.

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PUBLICATIONS

 


Image Credit: Wisconsin Project

Enforcement Actions | The Convergence and Evolution of Two Networks Supplying Iran’s UAV Program

As Iran expands its development and production of unmanned aerial vehicles (UAVs), it continues to seek sensitive electronics manufactured in the United States and other Western countries. Iranian UAV producers cannot legally obtain these goods, so they often turn to procurement agents for help.

The Wisconsin Project conducted an open-source investigation on two such agents based in Iran and China, Hossein Hatefi Ardakani and Gary Lam, drawing on U.S. government and court documents, corporate records, social media, and other information. The report explains the tactics the two agents employed to funnel U.S.-made components to the Islamic Revolutionary Guard Corps (IRGC) in Iran, how their respective networks evolved over time, and what can be done to disrupt their operations.

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ENTITIES OF CONCERN

 

In April, the U.S. Department of the Treasury sanctioned several front companies facilitating Iran’s defense cooperation with Russia.

Sahara Thunder

A subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL); serves as the main front company overseeing MODAFL’s commercial activities related to the sale of UAVs to Russia; also leads a network involved in the sale and shipment of Iranian commodities on behalf of MODAFL to China, Russia, and Venezuela.

Generation Trading FZE

A MODAFL front company based in the United Arab Emirates; has helped MODAFL facilitate the sale of sample UAV models, UAV parts, and related ground stations to Russia’s Alabuga Special Economic Zone in support of Shahed drone production in Russia.

Etemad Tejarat Misagh

An Iran-based trading company; considered by the U.S. Department of the Treasury to be a MODAFL subsidiary; owns shares in Sahara Thunder.

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IN THE NEWS

 


Iran’s supreme leader inaugurates Masoud Pezeshkian as Iran’s president. (Credit: IRNA) 

Iran’s New President Rekindles Faint Hopes of Rapprochement with West | The Guardian

July 28, 2024: Iran’s supreme leader formally inaugurated Masoud Pezeshkian as president of Iran. During the ceremony, Pezeshkian promised constructive engagement with the West. He appointed Mohammad Reza Aref as his first vice president and is expected to name Abbas Araghchi as his foreign minister.

Israeli Jets Strike Houthi Targets in Yemen After Tel Aviv Attack | Reuters

July 20, 2024: Israel carried out an airstrike targeting sites around Yemen’s port of Hodeidah in retaliation for a Houthi attack on Tel Aviv using an Iranian-made drone the day before. An Israeli military spokesperson claimed the Houthis used the port to receive Iranian weapons shipments. The Houthis, who have already conducted 200 attacks on Israel since October, said they would respond.

Satellite Photos Show Iran Expanding Missile Production | Reuters

July 8, 2024: Satellite images showed ongoing construction at Iran’s Modarres military base and Khojir missile production complex, with more than 30 new buildings across the two sites. Many of the buildings are surrounded by large dirt berms, the presence of which typically indicates missile production because the berms are designed to limit damage caused by accidental explosions. Unnamed Iranian officials confirmed that the construction was intended to increase the country’s ballistic missile and drone production.

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FROM THE LIBRARY

 

The surprise election of Masoud Pezeshkian prompted speculation about the possibility of revived nuclear diplomacy with the United States.

  • In a statement, Pezeshkian said he looked forward to “engaging in constructive dialogue with European countries” but also said his country would not respond to pressure – July 12.
  • When U.S. National Security Communications Advisor John Kirby was asked if the United States was prepared to make any new diplomatic overtures, he responded flatly, “No” – July 8.
  • U.S. Secretary of State Antony Blinken said that he was waiting to see whether Iran was serious about pulling back on its nuclear program, but in the meantime, “We of course have been maximizing pressure on Iran across the board” – July 19.

 

The United States and European Union made sanctions-related announcements.

 

The U.S. Department of Justice publicized two court cases involving the enforcement of sanctions against Iran.

  • Alabama resident Ray Hunt pleaded guilty to violating Iran sanctions. He used his company, Vega Tools LLC, to illegally export U.S.-manufactured industrial equipment for use in Iran’s oil, gas, and petrochemical industries – July 18.
  • The United Kingdom extradited Iranian national Saeid Haji Agha Mousaei to the United States. Mousaei is accused of obtaining advanced dual-use electronics from the United States and re-exporting them to Iran – July 23.