The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has designated five Iranian companies, which it believes enable the development of Iran’s ballistic missiles programme. The five companies, subordinates of the Shahid Bakeri Industrial Group (‘SBIG’), which develops and produces solid-fuel rockets, were placed on the Specially Designated Nationals and Blocked Persons List (‘SDN List’) on 4 January.
In October, President Trump refused to certify Iran’s compliance with the ‘nuclear deal’: the Joint Comprehensive Plan of Action (‘JCPOA’), entered into in 2015 between Iran and the P5+1 (the five permanent members of the UN Security Council – China, France, Russia, the UK, the US – plus Germany and the EU). The JCPOA provides Iran with relief from US, EU and UN nuclear-related sanctions in return for the reduction of Iran’s stockpiles of enriched uranium, and limits its uranium-enrichment capacity.
Although a ‘nuclear deal’, the Trump administration considers that Iran’s ballistic missiles programme violates the spirit of the JCPOA, as well as contravening UN Security Council Resolution 2231. This resolution endorsed the JCPOA and called upon Iran ‘not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons’ until 2023.
Treasury Secretary Steven Mnuchin has linked the designation of the five companies to current unrest in Iran, which, in recent weeks, has seen mass protests against economic hardship and political repression.
Mnuchin said that the sanctions ‘target key entities involved in Iran’s ballistic missile program, which the Iranian regime prioritises over the economic well-being of the Iranian people.’ He also highlighted the ‘regime’s economic mismanagement’ and ‘diversion of significant resources to fund threatening missile systems at the expense of its citizenry.’
The sanctions place an asset freeze on the property of those designated and US citizens are prohibited from dealing with them. Any foreign financial institution that knowingly facilitates significant transactions for the designated parties could be subject to sanctions, including an asset freeze and prevention of access to the US financial markets.
For information on the updates to OFAC’s SDN List see: