Sanctions under Executive Order 13382

Sanctions Under Executive Order 13382 in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): During 2011 the United States imposed targeted financial sanctions on Iranian entities, Iranian individuals and other entities linked to previously designated Iranian entities under Executive Order 13382, “Blocking Property of Weapons of Mass Destruction Proliferators and their Supporters.” See 70 Fed. Reg. 38,567 (July 1, 2005); see also World Encyclopedia of Law 2005 at 1125–31. The United States relies in part on the authorities in Executive Order 13382 to implement its obligations under the Security Council's resolutions concerning Iran. On January 13, 2011, OFAC designated 26 entities under E.O. 13382. 76 Fed. Reg. 15,366 (Mar. 21, 2011). The Treasury Department identified two of the entities as subordinates of Iran's Aerospace Industries Organization (“AIO”) and the other 24 as affiliates of the Islamic Republic of Iran Shipping Lines (“IRISL”). Both AIO and IRISL had been designated previously under E.O. 13382. See Department of the Treasury press release, available at (internet link) treasury.gov/press-center/press-releases/Pages/tg1022.aspx. Effective February 1, 2011, OFAC designated an additional seven individuals and seven entities from Iran, Turkey, and Malta under E.O. 13382. 76 Fed. Reg. 22,167 (Apr. 20, 2011). A Treasury Department press release, available at (internet link) treasury.gov/press-center/press-releases/Pages/tg1044.aspx, identified six of the individuals and five of the entities as part of a “multi-million dollar procurement network” led by Iranian Milad Jafari_ and used to procure metal products for subordinates of AIO. The remaining individual (Adrian Baldacchino, director of IRISL Malta) and two entities (Royal-Med Shipping Agency Ltd. and Maraner Holdings Limited) were designated for their affiliation with IRISL.

Developments

Effective February 17, 2011, OFAC designated one Iranian entity, Bank Refah Kargaran (and its aliases). 76 Fed. Reg. 12,414 (Mar. 7, 2011). A Treasury Department press release, available at (internet link) treasury.gov/press-center/press-releases/Pages/tg1067.aspx, explained that Bank Refah was designated for, among other activity, its financial services to facilitate weapons purchases by the Iranian Ministry of Defense and Armed Forces Logistics (“MODAFL”), the arm of the Iranian military that oversees Iran's ballistic missile program and a previous E.O. 13382 designee (in 2007).

In 2011, OFAC made several additional designations of entities related to, and vessels owned by, IRISL. On March 24, 2011, OFAC designated four vessels and updated information on 10 previously designated IRISL vessels. 76 Fed. Reg. 55,166 (Sep. 6, 2011). On October 27, 2011, OFAC identified one additional vessel as owned by IRISL and updated information on 14 vessels previously designated. 76 Fed. Reg. 72,500 (Nov. 23, 2011). Also on October 27, 2011, OFAC designated six more entities related to IRISL. 76 Fed. Reg. 72,499 (Nov. 23, 2011). Also on October 27, 2011, OFAC supplemented the identifying information for Soroush Sarzamin Asatir Ship Management Company, an entity designated in 2010 under E.O. 13382. 76 Fed. Reg. 72,501 (Nov. 23, 2011). On December 20, 2011, OFAC designated one individual and ten entities (shipping and front companies) affiliated with IRISL. 77 Fed. Reg. 2346 (Jan. 27, 2012).

Effective June 23, 2011, OFAC designated two additional entities, Mehr-E Eqtesad-E Iranian Investment Company and Tidewater Middle East Co. (and their aliases) under E.O. 13382. 76 Fed. Reg. 40,773 (July 11, 2011). Also effective June 23, 2011, OFAC designated Iran Air and Iran Air Tours and their aliases. 76 Fed. Reg. 40,772 (July 11, 2011). A Treasury Department fact sheet, available at (internet link) treasury.gov/press-center/press-releases/Pages/tg1217.aspx, identified the entities as follows: the first entity is owned or controlled by Mehr Bank, a previous designee; Tidewater is “a port operating company owned by Iran's Islamic Revolutionary Guard Corps (IRGC) that has been used by the IRGC for illicit shipments”; Iran Air is a commercial airline used by the IRGC and MODAFL to transport military related equipment; and Iran Air Tours is Iran Air's subsidiary.

On November 21, 2011, the State Department designated four Iranian entities (Nuclear Reactors Fuel Company (SUREH), Noor Afzar Gostar Company (NAGCO), Fulmen Group, and Yasa Part, with their aliases) pursuant to E.O. 13382. 76 Fed. Reg. 73,758 (Nov. 29, 2011). A State Department fact sheet, available at (internet link) state.gov/r/pa/prs/ps/2011/11/177608.htm, and excerpted below, explained the basis for the State Department designations and their relation to the International Atomic Energy Agency's recent conclusions about Iran's nuclear activities. OFAC also designated one individual and six entities on November 21, 2011, all linked to the Atomic Energy Organization of Iran (AEOI), the main Iranian organization responsible for research and development activities in the field of nuclear technology, which was listed in the Annex to E.O. 13382 and was designated by the United Nations Security Council in Resolution 1737. The November 21, 2011 designations pursuant to E.O. 13382 were made in conjunction with other measures announced that day directed at Iran. See discussion in Section A.2.b.(1), supra.

Today, the United States is taking a series of actions to increase pressure on Iran to comply with its full range of international nuclear obligations and to engage in constructive negotiations on the future of its nuclear program. In his report to the International Atomic Energy Agency (IAEA) Board of Governors, which was released to the public last week, the IAEA Director General concluded that Iran has carried out activities relevant to the development of a nuclear explosive device, some of which have continued past 2003. Iran uses a wide network of procurement agents to procure items, equipment, and technology in support of this illicit nuclear program. The actions below target several of these entities involved in Iran's illicit nuclear programs.

As a result of today's actions, U.S. persons are prohibited from engaging in any transactions with today's designees and any assets they may hold under U.S. jurisdiction are frozen.

Details

Department of State Designation of Entities under E.O. 13382:

The new State Department designees are entities that play an important role in Iran's nuclear procurement network. They support a variety of Iran's proscribed nuclear procurement-related activities, including centrifuge development, heavy water research reactor activities, and the uranium enrichment program.

The Nuclear Reactors Fuel Company The Nuclear Reactors Fuel Company (SUREH) was created in 2009 to oversee Iran's fuel manufacturing facilities and organizations. SUREH is responsible for production of fuel for Iran's nuclear reactors—including the 40-megawatt heavy water research reactor (the IR-40)—and has sought commodities for the reactor's fuel assemblies.

SUREH regularly works with known Iranian procurement agents to acquire needed commodities for the IR-40. The IR-40 is currently under construction at Arak, Iran, and when operational, it will provide Iran the capability to produce plutonium in the reactor's spent fuel, which Iran could choose to reprocess for nuclear weapons. Iran claims the reactor will produce radioisotopes for medical and industrial use and to replace the aging Tehran Research Reactor.

In 2011, the IAEA Board of Governors [BOG] found that, contrary to the relevant resolutions of the BOG and UNSC, Iran has not suspended work on all heavy water-related projects, including the IR-40. SUREH's procurement activities are violations of Iran's NPT, IAEA, and UNSC obligations.

The European Union noted in Council Implementing Resolution 503/2011 (May 23, 2011) that SUREH is a company subordinate to the UN-sanctioned Atomic Energy Organization of Iran (AEOI), consisting of the Uranium Conversion Facility, the Fuel Manufacturing Plant, and the Zirconium Production Plant.

Noor Afzar Gostar Company The Noor Afzar Gostar Company has been involved in the procurement efforts for materials for both the IR-40 and probably for Iran's uranium enrichment program.

The European Union noted in Council Implementing Resolution 503/2011 (May 23, 2011) that the Noor Afzar Gostar Company is a company that is a subsidiary of the UN-sanctioned AEOI and is involved in the procurement of equipment for the nuclear program.

Fulmen Group

More about the Issue

The Fulmen Group was involved in procuring goods for the covert uranium enrichment facility at Qom while the facility was still an undeclared site from 2006 through 2008.

From May 2006 until at least September 2008, Fulmen was involved in many facets of the construction of Qom. Additionally, Fulmen has worked with the U.S.- and UN-designated firm Kalaye Electric on the construction of elements of the Natanz Uranium Enrichment Plant.

The preamble of UNSCR 1929 noted that Iran has not established full and sustained suspension of all enrichment-related and reprocessing activities, as set out in Resolutions 1696, 1737, 1747, and 1803, making Fulmen's activities at both Qom and Natanz a material contribution to those facilities' gas centrifuge plant for uranium enrichment.

Iran has failed to meet the requirements of the IAEA Board of Governors regarding disclosure of activity at Qom, including providing the IAEA with design information and permitting the IAEA to verify that information as required by its Safeguards Agreement and by Modified Code 3.1 of the Subsidiary Arrangement to its Safeguards Agreement. Iran also refuses to provide the IAEA with a chronology of the development of Qom, as requested by the IAEA.

The European Union noted in Council Implementing Resolution 668/2010 (July 26, 2010) that Fulmen was involved in the installation of electrical equipment on the Qom/Frodoo site at a time when the existence of the site had not yet been revealed. The EU also noted that Arya Niroo Nik is a shell company used by Fulmen for some of its operations. The EU has also designated Fereydoun Mahmoudian as the Director of Fulmen.

Yasa Part The European Union noted in Council Implementing Resolution 668/2010 (July 26, 2010) that Yasa Part is a company involved with purchasing materials and technologies necessary to nuclear and ballistic programs.

Resources

Notes and References

_ Editor's note: The Treasury press release also related that, on the same day the Jafari network was designated under E.O 13382, the Department of Justice announced the unsealing of a July 21, 2010 federal indictment charging Milad Jafari with one count of conspiracy to illegally export materials from the United States to Iran and to defraud the United States; five separate counts of illegal export and attempted illegal export of materials to Iran; and five additional counts of smuggling materials.

Sanctions under Executive Order 13382

Sanctions under Executive Order 13382