PRESS RELEASES
Treasury Sanctions Key Actors in Iran’s Steel Sector
January 5, 2021
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a China-based supplier of graphite electrodes, a key element in steel production, as well as twelve Iranian producers of steel and other metals products, and three foreign-based sales agents of a major Iranian metals and mining holding company. The Iranian metals sector is an important revenue source for the Iranian regime, generating wealth for its corrupt leaders and financing a range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for foreign terrorist groups, and a variety of human rights abuses, at home and abroad.
“The Trump Administration remains committed to denying revenue flowing to the Iranian regime as it continues to sponsor terrorist groups, support oppressive regimes, and seek weapons of mass destruction,” said Secretary Steven T. Mnuchin.
Today’s action was taken pursuant to Executive Order (E.O.) 13871, which imposes sanctions on several sectors of the Iranian economy, including Iran’s steel sector, that continue to generate significant revenue for the Iranian regime.
Chinese Supplier of Materials Critical to Iranian Steel Production
Chinese company Kaifeng Pingmei New Carbon Materials Technology Co., Ltd. (KFCC) specializes in the manufacture of carbon materials, key elements in steel production. Between December 2019 and June 2020, KFCC fulfilled orders totaling thousands of metric tons of materials for several Iranian steel companies. In mid-2020, KFCC, working with an Iranian trading firm, sold 300 metric tons of graphite electrodes and miscellaneous equipment to Pasargad Steel Complex in Iran.
KFCC is being designated pursuant to E.O. 13871 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Iranian steelmaker Pasargad Steel Complex, an entity designated pursuant to E.O. 13871 for operating in the steel sector of Iran.
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Sanctions Implications
All property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.
In addition, persons that engage in certain transactions with the persons designated today by OFAC may themselves be exposed to sanctions. Furthermore, any foreign financial institution that knowingly conducts or facilitates a significant transaction for or on behalf of the persons designated by OFAC today could be subject to U.S. correspondent or payable-through account sanctions.
View identifying information on today’s designations.
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https://www.state.gov/sanctioning-companies-supporting-irans-metal-industry/
Sanctioning Companies Supporting Iran’s Metal Industry
PRESS STATEMENT
MICHAEL R. POMPEO, SECRETARY OF STATE
JANUARY 5, 2021
Today, the United States is imposing sanctions on 17 companies and one individual in connection with Iran’s metals industry. The Iranian regime uses revenue from its metals sector to fund the regime’s destabilizing activities around the world.
The Department of State is designating China-based Kaifeng Pingmei New Carbon Materials Technology Co., LTD (KFCC) and Iran-based Hafez Darya Arya Shipping Company (HDASCO), a subsidiary of the Islamic Republic of Iran Shipping Lines (IRISL), pursuant to Section 1245(a)(1)(C)(i)(II) of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA). Both companies knowingly sold, supplied, or transferred, directly or indirectly, graphite to or from Iran and such graphite was sold, supplied, or transferred to or from an Iranian person (South Kaveh Steel Company and Arfa Iron and Steel Company) included on the Department of Treasury’s Specially Designated Nationals List. The State Department is also imposing sanctions on Majid Sajdeh, who is a principal executive officer of HDASCO.
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The United States will continue to aggressively implement sanctions with respect to the Iranian regime, those who evade sanctions, and others who enable the regime to fund and carry out its malign agenda of repression and terror.
1) For the criteria we use to determine what designation notices to include in the Research System, see Introductory Note Common to all Derivative Designation Notices Included in the Research System.
2) This designation notice includes some designations that are of a "pure secondary sanctions" nature, meaning that they were made in response to international trade transactions that were not alleged to have been deceptive, contrary to international law, or illegal in any country having jurisdiction over the transactions.
This is a relatively rare case of the "material assistance" designation criterion being invoked in response to an international trade transaction not involving a government-owned entity and not involving the oil and gas sectors. The rare nature of the designation—in particular as it relates to the extent to which it can be seen as a signal that the "material assistance" criterion will be used as a "quasi secondary sanctions" authority in the future—is tempered by the fact that the transactions were relatively clearly within the scope of the "significant transaction" criterion of EO 13871. Compare Treasury Targets Iran’s Billion Dollar Metals Industry and Senior Regime Officials, a similar designation notice.
Kaifeng (KFCC) was designated by both Treasury (EO 13871) and the State Department (section 1245 of IFCA). Compare Imposing Sanctions Related to the Islamic Republic of Iran Shipping Lines and Iranian Shipping Entities (State Dep't), where a Chinese entity was designated solely pursuant to section 1245 of IFCA for metals-related transactions.