On 10 and 11 September 2024, the US, UK and France and Germany took coordinated action in response to Iran’s support for Russia’s war effort and, in particular, the supply of ballistic missiles by Iran to Russia for use in Ukraine. The measures announced include restrictions on Iran’s national airline, Iran Air, travel bans and asset freezes on Iranian individuals and organisations involved in ballistic missile and drone supply chains, and new Russian shipping sector sanctions.
On 13 September, the UK announced new trade sanctions targeting goods and technology of strategic concern to the UK, including, among others, certain unmanned aerial vehicles, turbojets, semiconductor devices, machines and apparatus for the manufacture of semiconductor devices, certain communication devices and electric motors and generators. The measures prohibit the export, supply, delivery and making available to, or for use in, Iran of these items, along with the provision of certain associated services. According to the notice to exporters the measures are designed to “disrupt Iran’s production and supply of unmanned ariel vehicles and missiles.”
On 13 September, the EU more broadly similarly announced that it would introduce further restrictive measures against Iran, which are expected to include the designation of individuals and entities involved with Iran’s ballistic missile and drone programmes, and additional sanctions measures against Iran’s aviation sector.
US announces sanctions against Iran Air; UK and France cancel bilateral air services agreement
Iran Air was previously identified as meeting the definition of the Government of Iran pursuant to Executive Order (“EO“) 13599 on 5 November 2018, for being owned or controlled by the Government of Iran, and was therefore already an SDN under US sanctions. However, OFAC has now designated it under two additional EOs, namely:
- EO 13949, for materially contributing to the transfer (directly or indirectly) of arms or related materials in Iran; and
- EO 14024, for operating or having operated in the Russian transportation sector.
Designation under these additional EOs primarily increases the secondary sanctions risks for non-US parties dealing with Iran Air. For example, foreign financial institutions risk designation as an SDN or restrictions or prohibitions on US correspondent or payable-through accounts if they engage in or facilitate significant transactions involving, or provide any services to, Iran Air.
The EU and UK have not yet designated Iran Air. However, in a joint statement issued on 10 September, the UK, France and Germany have confirmed that they are “working towards imposing sanctions on Iran Air”, with the UK and France taking steps to cancel bilateral air services arrangements with Iran.
Notably, France, Germany and the UK also gave a joint statement to the International Atomic Energy Agency (“IAEA”) Board of Governors on the Joint Comprehensive Plan of Action (“JCPoA”) entered into with Iran in relation to the dismantling of it’s nuclear programme. As part of this statement it was noted that Iran “has been blatantly violating all JCPoA limits on both enrichment and accumulation of enriched uranium. Its stockpile of high enriched uranium up to 60 % has continued to grow significantly, without any credible civilian justification”.
New US and UK designations
Iran-related designations
In addition, the US and UK have placed sanctions on key individuals and organisations accused of facilitating Iran’s military support to Russia, most notably for being involved in ballistic missile and drone supply chains.
Specifically, the new designations include:
- US sanctions on Azadegan Transportation Company, a ground cargo transport company and related entities and persons;
- US sanctions on Farzanegan Propulsion Systems Design Bureau and related persons;
- US and UK asset freezes and travel bans placed on three Ministry of Defence and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps Aerospace Force (IRGC-ASF) individuals; and
- UK asset freezes on 4 companies linked to the supply of weapons to Russia: The Anzali Free Trade Industrial Zone Organisation (Anzali FTZ), Baharestan Kish Company, Saad Sazeh Faraz Sharif (SSFS), and Chekad Sanat Faraz Asia (CSFA).
As regards the EU, the list of sanctioned individuals and entities is yet to be released.
Russia-related designations
In addition to the above sanctions placed on Iranian individuals and organisations, the UK has sanctioned three further Russian organisations for their intent to use the weapons system to bring destruction to Ukraine, namely: The 924th State Centre for Unmanned Aviation, The Russian Aerospace Forces (VKS), and Command of the Military Transport Aviation (VTA).
New shipping sector sanctions
Simultaneously to the above, the UK has announced further shipping sanctions against Russian vessels. These include:
- 10 Russian vessels (sanctioned as being “high-volume offenders” for their role in Russia’s ‘shadow fleet’, used by Russia to undermine sanctions and continue unfettered trade in Russian oil); and
- 5 Russian cargo ships (for their role in transporting weapons supplies from Iran to Russia).
Ships designated under shipping sanctions are prohibited from entering a port in the UK, can be detained, and are refused permission to register on the UK Ship Register or have its existing registration terminated.
Finally, the US has updated its sanctions on the Russian marine shipping company, TransMorFlot LLC, and a number of persons and vessels related to it and MG-FLOT.
If you have any questions on how the above developments may impact your organisation, please reach out to our team below.
