Key Notes:

  • In response to ballistic missile tests, the Trump administration places 25 Iranian persons/entities on the Specially Designated Nationals List.
  • OFAC expands list of medical devices requiring authorization for export to Iran after the Obama administration had relaxed sanctions in this area.

New Sanctions in Response to Iran’s Ballistic Missile Program and Continued Support of Terrorism

On February 3, 2017, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a Specially Designated Nationals (SDN) List Update, adding 13 individuals and 12 entities to the SDN List. In a press release, OFAC announced that the additional individuals and entities were sanctioned due to their involvement in “procuring technology and/or materials to support Iran’s ballistic missile program, as well as for acting for or on behalf of, or providing support to, Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).”

OFAC stated that the sanctions were “fully consistent with the United States’ commitments under the Joint Comprehensive Plan of Action (JCPOA),” and that the sanctions were an effort to counter Iran’s hostile activity that was outside the scope of the JCPOA. The sanctions block all property and interests in property of those added to the SDN List. Further, no U.S. person may engage in any transactions with those listed.

In taking this action, OFAC designated several networks and supporters of Iran’s ballistic missile procurement, including a critical Iranian procurement agent (Abdollah Asgharzadeh) and eight individuals and entities in his Iran- and China-based network, an Iranian procurement company and its Gulf-based network, and five individuals and entities that are part of an Iran-based procurement network connected to Mabrooka Trading. OFAC also designated a key IRGC-QF-run support network working with Hizballah, including IRGC-QF official Hasan Deghan Ebrahimi, his associates, Muhammad Abd-al-Amir Farhat and Yahya al-Hajj, and several affiliated companies in Lebanon. Finally, OFAC designated Ali Sharifi, an individual providing procurement and other services on behalf of the IRGC-QF.

The sanctions come after two recent ballistic missile tests by Iran, in addition to a recent attack on a Saudi naval vessel by Tehran-backed militants in Yemen. This action comes just days after National Security Advisor Michael Flynn put Iran “on notice” after its latest missile test. Prior to the implementation of the new OFAC sanctions, President Trump had posted several tweets regarding Iran’s behavior: “Iran is playing with fire – they don’t appreciate how ‘kind’ President Obama was to them. Not me!” and “Iran has been formally PUT ON NOTICE for firing a ballistic missile. Should have been thankful for the terrible deal the U.S. made with them!”

Upon announcing the sanctions on these 25 Iranian persons and entities, Flynn issued a brief statement asserting that, “The international community has been too tolerant of Iran’s bad behavior. … The Trump Administration will no longer tolerate Iran’s provocations that threaten our interests.” The White House indicated that these sanctions were actually already “in the pipeline” before President Trump took office, and indicated that further actions may be taken. When asked whether his administration’s new posture could mean military action, President Trump answered, “Nothing’s off the table.”

While this placement of individuals and entities on the SDN List is not in itself a shift in policy from the Obama administration towards Iran, it does appear to indicate that President Trump will be strictly enforcing what his administration sees as the scope of authorized activities by Iran under the terms of the JCPOA. Iran immediately countered that it has the right to conduct ballistic missile tests for defensive purposes and that none of the missiles are designed to be capable of carrying nuclear warheads. However, the United States and other western countries state that in an agreement separate from the JCPOA, Tehran agreed to an eight-year extension of a ban on its ballistic missile program.

The immediate aftermath of the placement of these Iranian parties on the SDN List was that Iran held military exercises involving its missile and radar systems.

OFAC Updates the List of Medical Devices Requiring Authorization for Export to Iran

On February 2, 2017, OFAC updated the existing list of medical devices requiring specific licensing authorization for export to Iran. Pursuant to the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR), OFAC updated and clarified the scope of medical devices that are not authorized for exportation or reexportation pursuant to the general license at 31 C.F.R. § 560.530(a)(3)(i).

This update comes just over a month after the Obama administration issued a final rule in December 2016 amending ITSR to expand the scope of permissible exports or reexports of medicine and medical devices to Iran to cover a broader range of medical devices, in particular products used for nuclear medicine purposes. The general license for medical devices under § 560.530 authorizes export or reexport to Iran of medical devices that are generally subject to the Export Administration Regulations (EAR) and designated as “EAR99.” While OFAC offered no comment on the February 2 update, the expanded list appears to cover medical devices that might possibly have some use in a nuclear weapons research program. Iran called the decision by the Trump administration “inhumane,” stating that the equipment has diagnostic and treatment applications.

As a result of this update to the List of Medical Devices Requiring Specific Authorization, exporters will need to obtain a specific OFAC license prior to exportation of certain medical supplies and equipment (such as oxygen generators, pumps with certain flow rates, and certain diagnostic medical imaging equipment). Further, the list expands the types of laboratory equipment which will require an OFAC authorization before exporting to Iran.