On October 18, 2023, the US Departments of Commerce, State, Treasury, and Justice issued the Iran Ballistic Missile Procurement Advisory (the “Advisory”) to alert persons and businesses to Iran’s ballistic missile procurement activities. The Departments of State and Justice also issued separate statements related to the Advisory. The Advisory and related statements underscore the US Government’s concerns about Iran’s ballistic missile program and its efforts to stymie that program.
In addition, the US Government and 46 (of the 106) Proliferation Security Initiative (PSI)-endorsing States (mostly EU Member States but also other countries such as Argentina, Belize, Canada, Colombia, Japan, South Korea, and Panama) released a joint statement to underscore their commitment to countering Iran’s development, procurement, and proliferation of missiles and missile-related technology amidst the expiration of UN Security Council Resolution 2231. That Resolution was designed to constrain Iran’s ballistic missile program. Our previous blog posts related to UN Security Council Resolution 2231 are available here and here.
Iran Ballistic Missile Procurement Advisory
The Advisory is designed to assist businesses in implementing effective due diligence policies and procedures, and to provide consolidated guidance regarding Iranian missile procurement and related US sanctions and export control restrictions. The Advisory includes five annexes that cover the following:
- Deceptive Techniques Employed by Iranian Ballistic Missile Procurement Networks: These procurement networks use a variety of methods to evade export controls and sanctions, including (i) obscuring the end user through several layers of companies, (ii) falsifying end-use documentation and shipment details, (iii) routing shipments through several countries prior to onward shipping to Iran, and (iv) using deceptive tactics to access the US and international financial systems.
- Iranian Ballistic Missile-Related Entities: The Aerospace Industries Organization and the Islamic Revolutionary Guard Corps, both of which have been sanctioned by the United States, primarily lead Iran’s ballistic missile program and oversee several subordinate missile entities and front companies that procure foreign goods for Iran’s ballistic missile programs.
- Key Goods Sought by Iran’s Missile Program: This list includes a number of US-origin and foreign-produced goods sought by Iran for its ballistic missile program, including (i) production and testing equipment; (ii) goods and materials; (iii) electronics; and (iv) guidance, navigation and control systems.
- Relevant US Sanctions Authorities: The United States has several nonproliferation sanctions authorities that it may use to impose sanctions against entities supporting Iran’s missile procurement, development, and proliferation activities. These include the (i) Iran, North Korea, and Syria Nonproliferation Act, (ii) Missile Sanctions authorities (i.e., Section 73 of the Arms Export Control Act and Section 11B(b)(1) of the Export Administration Act of 1979), (iii) Iran Freedom and Counter-Proliferation Act of 2012, and (iv) Executive Orders (“EOs”) 12938, 13382, and 13949.
- Minimizing Sanctions and Export Control Risk: The Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers a comprehensive trade embargo against Iran, as set forth in the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (“ITSR”). The ITSR generally prohibit most direct or indirect commercial, financial, or trade transactions with Iran by US Persons, non-US entities owned or controlled by US Persons, or parties within the United States, unless authorized by OFAC or exempt. The Department of Commerce’s Bureau of Industry and Security maintains licensing requirements on certain exports and reexports of items (i.e., commodities, software, technology) to Iran under the Export Administration Regulations, 15 C.F.R. Parts 730-774. Criminal and civil penalties can be imposed under both authorities.
Related OFAC and Department of State Designations
On October 18, 2023, OFAC sanctioned eleven individuals, eight entities, and one vessel based in Iran, Hong Kong, the People’s Republic of China (“PRC”), and Venezuela for enabling Iran’s destabilizing ballistic missile and unmanned aerial vehicle programs. These parties were sanctioned pursuant to EO 13382 for engaging in activities that have materially contributed to Iran’s missile program. On October 20, 2023, OFAC sanctioned three PRC entities under the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. Part 544. Among these OFAC designations, the Department of State similarly designated two Iranian individuals pursuant to EO 13382, and two Iran-based entities and four Russia-based entities pursuant to EO 13949 for engaging in activities that have materially contributed to direct or indirect supply, sale, or transfer of arms or related materials to Iran.
