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OFAC Issues Sanctions Targeting Promotion of Iran’s Drone Program

Washington, D.C. (July 23, 2024) - On May 31, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) listed four entities and one individual for promoting Iran’s unmanned aerial vehicle (UAV) program. U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson stated that Iran’s UAV program was supplying Russia’s arsenal in Ukraine, and OFAC’s latest move is part of ongoing efforts to counter Iran’s destabilizing actions.

Individuals and businesses are urged to take note of these developments, as transacting with these entities or individual may subject an entity to secondary sanctions. Secondary sanctions place penalties on persons and organizations that have engaged in prohibited actions, regardless of the jurisdiction they operate in, even if there is no direct or indirect connection to the U.S. The scope of actions that may expose an individual or organization to secondary sanctions is wide and encompasses the provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

The four newly sanctioned entities are:

  • Rayan Fan Kav Andish Co , also referred to as “RFKA”
     
  • Kish Mechatronics Co.
     
  • Fanavarihaye Hava Pishran Sazeh Sepehr Co LLC, also referred to as “HPSS”
     
  • Mersad Mohajer Co LLC

Additionally, Afshin Khajeh Fard (Khajeh Fard), the head of the Iran Aviation Industries Organization, has been added to OFAC’s Specially Designated Nationals (SDN) list. All the listed entities are Iranian, but also operate outside of Iran as well.

Key Takeaway

Individuals and entities desiring to operate in the unmanned aerial vehicle industry and the industries adjacent to it would be well-advised to conduct appropriate due diligence to ensure that their operations cannot be attributed to the benefit of any designated individual or entity. Failure to do so may restrict an entity’s ability to engage with financial institutions and risks the seizure of assets and funds. 

Lewis Brisbois’s attorneys are actively engaged in the wide range of legal issues in this area and are advising clients on managing legal and business risk as events continue to develop at an accelerated pace. For more information, contact the author or editors of this alert. Visit our Ukraine Conflict Response Practice page for additional alerts in this area.

Author: 

Mamoun Mahayni, Associate

Editors:

Jane C. Luxton, Managing Partner - Washington, D.C.

Andrew Pidgirsky, Partner and Chair of Ukraine Conflict Response Practice

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