This month’s newsletter features an article analyzing recent trends in U.S. sanctions on Iran. The United States has sought to give its sanctions more bite by coordinating designations with allied countries and sanctioning companies’ broader business networks. Additionally, the U.S. Treasury Department may have a newfound appetite for targeting Iran’s industrial capacity, although it has so far shied away from systematically clamping down on Iranian oil exports.

The newsletter also includes profiles of companies producing components for Iran’s Shahed-series unmanned aerial vehicles (UAVs), as well as news about sanctioned airline Mahan Air’s smuggling of two commercial aircraft from Lithuania, Iran’s nuclear response following its censure at the International Atomic Energy Agency (IAEA), and the Houthis’ unveiling of their “Palestine” ballistic missile resembling an Iranian model. Additions to the Iran Watch library include official statements and documents from the meeting of the IAEA Board of Governors, U.S. and allied restrictive measures on Iran, and U.S. designations targeting the Houthis.

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PUBLICATIONS

Image Credit: Wisconsin Project

Articles and Reports | Three Emerging Shifts in U.S. Sanctions on Iran

Following Iran’s large-scale missile and drone attack on Israel on April 13, the United States pledged to increase economic pressure on Iran and hold it accountable for the attack, including through new sanctions and export controls.

The subsequent sanctions packages exemplified three emerging shifts in U.S. sanctions on Iran: more coordination on designations with allied countries; a greater effort to sanction companies’ broader business networks, including their key officials; and perhaps a renewed appetite for sanctioning Iran’s industrial capacity. While these efforts may not cause the level of economic pain that cutting off Iran’s oil exports might, they can nevertheless have an impact.

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ENTITIES OF CONCERN

In December 2023, the European Union sanctioned Iranian companies producing components for Shahed-series UAVs.

Chekad Sanat Faraz Asia

Specializes in the production of goods made from composite materials; considered by the European Union to be the same entity as Shakad Sanat Asmari.

Daria Fanavar Borhan Sharif

Offers aerospace engineering services and manufactures parts for Shahed-series UAVs; considered by the European Union to be the same entity as Sadid Sazeh Parvaz Sharif.

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IN THE NEWS

The Houthis in Yemen recently unveiled the “Palestine” missile. (Credit: Screen capture from Houthi media)

Iran Smuggles Two Planes out of Lithuania, Bypassing Sanctions | Lithuanian Radio and Television

June 20, 2024: Iran’s Mahan Air smuggled two Airbus A340 planes, owned by Gambian leasing company Macka Invest, into Iran as they flew from Lithuania to Sri Lanka and the Philippines. The aircraft operators switched off the planes' automatic transponders after entering Iranian airspace, but aviation data shows they landed in Tehran and Chabahar. Authorities at the Lithuanian airport prevented a third Macka Invest airplane, which carried spare parts, from taking off after learning that the first had diverted to Iran.

Iran Installing and Starting Cascades of Advanced Centrifuges as Tensions High Over Nuclear Program | Associated Press

June 14, 2024: Following a formal censure by the IAEA Board of Governors over its nuclear program, Iran began feeding uranium into three new cascades of advanced IR-4 and IR-6 centrifuges at the Natanz enrichment facility. It also plans to install 18 more cascades of IR-2m centrifuges at Natanz and eight cascades of IR-6 centrifuges at Fordow.

Yemen’s Houthi Rebels Unveil Solid-fuel ‘Palestine’ Missile That Resembles Iranian Hypersonic | Associated Press

June 6, 2024: Yemen’s Houthi rebels fired a new type of solid-fuel missile called “Palestine” at Israel’s Eilat port. The Houthis claimed the weapon was locally made, but its design elements resembled those of missiles developed by Iran's Islamic Revolutionary Guard Corps, including the hypersonic Fattah system.

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FROM THE LIBRARY

At its quarterly meeting, the IAEA Board of Governors passed a resolution calling on Iran to improve its cooperation with the agency to resolve outstanding nuclear safeguards issues.

• Ahead of the meeting, the IAEA director-general issued two reports on Iran’s implementation of nuclear-related commitments under the Joint Comprehensive Plan of Action and safeguards commitments under the Non-Proliferation Treaty – May 27.
• During the meeting, France, Germany, and the United Kingdom noted that several safeguards issues had gone unresolved for five years and put forward the resolution censuring Iran – June 5.
• China, Iran, Russia, and several other countries issued a joint statement calling the resolution “unconstructive and confrontational” and urging the board not to adopt it  – June 5.
• China, Iran, and Russia also issued a joint statement blaming the United States and European countries for the failure to revive the JCPOA – June 6.

The United States and its allies announced new restrictive measures targeting Iran’s military programs.

• Following its summit in Italy, the Group of Seven threatened new sanctions on Iran in response to its destabilizing activities in the Middle East – June 14.
• Canada announced its decision to list the IRGC as a terrorist group – June 19.
• The U.S. Treasury Department designated nearly 50 entities that are part of a “shadow banking” network supporting the IRGC and the Ministry of Defense and Armed Forces Logistics – June 25.

In the face of continued Houthi attacks on commercial shipping in the Red Sea, the United States unveiled new sanctions aimed at cutting off the group’s sources of funding and procurement.

• On June 10, the Treasury Department announced the seventh round of sanctions targeting the network of Houthi financial facilitator Sa’id al-Jamal – June 10.
• The Treasury Department also sanctioned seven entities in China, Hong Kong, and Oman that have helped the Houthis procure materials and equipment for weapons manufacturing in Yemen – June 17.