US Targets Iranian Drone Industry In New Sanctions
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) said Thursday it is sanctioning over one dozen entities, individuals, and vessels that have played a central role in facilitating and financing the clandestine sale of Iranian unmanned aerial vehicles (UAVs) for Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which itself is involved in supporting Iran’s Islamic Revolutionary Guard Corps (IRGC) and Russia’s war in Ukraine.
Sahara Thunder is the main front company that oversees MODAFL’s commercial activities in support of these efforts. Sahara Thunder also plays a key role in Iran’s design, development, manufacture, and sale of thousands of UAVs, many of them ultimately transferred to Russia for use in its war of aggression against Ukraine. OFAC is also sanctioning two companies and a vessel involved in the shipment of Iranian commodities for Sepehr Energy Jahan Nama Pars, which similarly plays a leading role in the commercial activities of Iran’s Armed Forces General Staff (AFGS). Concurrent with this action, the United Kingdom and Canada are imposing sanctions targeting several entities and individuals involved in Iran’s UAV procurement and other military-related activities.
“Iran’s Ministry of Defense continues to destabilize the region and world with its support to Russia’s war in Ukraine, unprecedented attack on Israel, and proliferation of UAVs and other dangerous military hardware to terrorist proxies,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States, in close coordination with our British and Canadian partners, will continue to use all means available to combat those who would finance Iran’s destabilizing activities.”
Today’s action is being taken pursuant to the counterterrorism authority in Executive Order (E.O.) 13224, as amended, E.O. 13382, a counterproliferation authority, and E.O. 14024, which targets Russia’s harmful foreign activities. OFAC designated MODAFL pursuant to E.O. 13224 on March 26, 2019 for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007 for providing support to multiple terrorist groups. The Department of State designated MODAFL pursuant to E.O. 13382 and E.O. 14024 on October 25, 2007 and February 23, 2024, respectively.
The Iranian government allocates billions of dollars’ worth of commodities to Iranian military entities including MODAFL and the AFGS as part of the Iranian military’s annual budget. Sahara Thunder, which is subordinate to MODAFL, oversees MODAFL’s commercial activities. In November 2023, OFAC sanctioned the network of Sepehr Energy Jahan Nama Pars Company (Sepehr Energy), which plays a similar role leading the sale of Iranian commodities on behalf of the AFGS.
Sahara Thunder has also played an instrumental role in the Iranian military’s sale of UAVs. MODAFL has cooperated with Russia to finance and produce Iranian-designed one-way attack UAVs at the U.S.-sanctioned Joint Stock Company Special Economic Zone of Industrial Production Alabuga (SEZ Alabuga) facility in Russia under a $1.75 billion contract. As of late 2022, Russian officials were negotiating a deal for Sahara Thunder to deliver and produce thousands of UAVs per year at this facility. Such UAVs have been used by the Russian military in Ukraine against critical infrastructure and civilian targets.
U.S.-sanctioned Generation Trading FZE has been used as part of this network to receive millions of dollars’ worth of payments from SEZ Alabuga and its subsidiaries as part of Russia’s contract with MODAFL.
Generation Trading FZE was designated on February 23, 2024 pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, MODAFL. SEZ Alabuga was designated pursuant to E.O. 14024 on February 23, 2024, for operating or having operated in the defense and related materiel sector of the Russian Federation economy.
Sahara Thunder is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, MODAFL. Sahara Thunder is also being designated pursuant to E.O. 14024 for operating in the defense and related materiel sector of the Russian Federation economy.