On June 25, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that its recent designations to the Specially Designated Nationals and Blocked Entities (SDN) List targeted Iran’s steel, aluminum, copper, and iron sectors. OFAC designated eight entities operating in the Iranian metals sector including companies from Iran, the United Arab Emirates (UAE), Hong Kong, and Germany. OFAC designated these entities pursuant to President Trump’s May 2019 Executive Order (E.O.) 13871, which authorizes OFAC to impose sanctions with respect to the metals sectors of Iran.

Five of the designated companies are linked to Esfahan’s Mobarakeh Steel Company (“Mobarakeh”), Iran’s largest steel manufacturer. Mobarakeh was designated in 2018 due to its link to the Islamic Revolutionary Guard Corps (IRGC), and was sanctioned by the seven member nations of the Terrorist Financing Targeting Center in October 2019 for being part of Iran’s terror support network. OFAC designated one Germany-based and three UAE-based sales agents for being owned or controlled by Mobarakeh. The other three entities designated to the SDN List are Iran metals producers. All property and interest in property of these SDNs and any entities in which they own a 50% or greater interest are blocked and may not be dealt with by U.S. persons. Foreign persons dealing with these entities may also expose themselves to U.S. sanctions.

Treasury Secretary Steven T. Mnuchin stated the following with respect to this recent action: “The Iranian regime continues to use profits from metals manufacturers and foreign sales agents to fund destabilizing behavior. The United States remains committed to isolating key sectors of the Iranian economy until the revenues from such sectors are refocused toward the welfare of the Iranian people.”