U.S. Sanctions Iran’s Construction Sector

November 1, 2019

On October 31, the U.S. State Department announced sanctions on Iran’s construction sector and the sale of certain materials used in Tehran’s nuclear, military or ballistic missile programs. The sale of raw and semi-finished metals, graphite, coal, and software for integrating industrial purposes would be prohibited if the materials were deemed to be used in Iran’s construction industry. The United States targeted the construction sector after determining that the sector was “controlled directly or indirectly” by the Islamic Revolutionary Guard Corps, which has been designated a foreign terrorist organization.

The State Department also announced the renewal of waivers for an additional 90 days that allow Russian, Chinese and European companies to continue working on non-proliferation projects at Iranian nuclear facilities. “This decision will help preserve oversight of Iran’s civil nuclear program, reduce proliferation risks, constrain Iran’s ability to shorten its “breakout time” to a nuclear weapon, and prevent the regime from reconstituting sites for proliferation-sensitive purposes,” said State Department spokeswoman Morgan Ortagus. The following is a press statement and a fact sheet by State Department.

 

State Department Press Release

State Department SealSecretary Pompeo is continuing restrictions on the Iranian regime’s nuclear program.  This decision will help preserve oversight of Iran’s civil nuclear program, reduce proliferation risks, constrain Iran’s ability to shorten its “breakout time” to a nuclear weapon, and prevent the regime from reconstituting sites for proliferation-sensitive purposes.

Concurrently, the Secretary made two determinations with sanctions implications pursuant to Section 1245 of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA): one identifying the construction sector of Iran as being controlled directly or indirectly by the Islamic Revolutionary Guard Corps (IRGC); and one identifying four strategic materials as being used in connection with Iran’s nuclear, military, or ballistic missile programs.  With these determinations, the United States will have additional authorities to prevent Iran from acquiring strategic materials for the IRGC, its construction sector, and its proliferation programs.

The United States is resolute in its commitment to negotiating enduring restrictions that deny Iran any pathway to a nuclear weapon and to using the full range of our diplomatic and economic tools to constrain Iran’s destabilizing proliferation activities.  As long as the Iranian regime continues to reject diplomacy and to expand its nuclear program, the economic pressure and diplomatic isolation will intensify.

 

State Department Fact Sheet

Pursuant to Section 1245 of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA), the Secretary of State has made two findings: one identifying the construction sector of Iran as being controlled directly or indirectly by the Islamic Revolutionary Guard Corps (IRGC); and one identifying four strategic materials as ones that are being used in connection with the nuclear, military, or ballistic missile programs of Iran.

First, the Secretary of State, in consultation with the Secretary of the Treasury, has determined that the construction sector of Iran is controlled directly or indirectly by the IRGC.  As a result of this determination, the sale, supply, or transfer to or from Iran of raw and semi-finished metals, graphite, coal, and software for integrating industrial purposes will be sanctionable if those materials are to be used in connection with the Iranian construction sector.

Second, the Secretary of State, in consultation with the Secretary of the Treasury, has determined that the following certain types of those materials are used in connection with the nuclear, military, or ballistic missile programs of Iran:  stainless steel 304L tubes; MN40 manganese brazing foil; MN70 manganese brazing foil; and stainless steel CrNi60WTi ESR + VAR (chromium, nickel, 60 percent tungsten, titanium, electro-slag remelting, vacuum arc remelting).  As a result of this determination, the sale, supply, or transfer to or from Iran of those materials will be sanctionable (regardless of end-use or end-user).

With these actions, the United States is continuing a campaign to maximize economic pressure on the Iranian regime.  This campaign aims to fundamentally change the Iranian regime’s behavior, block all paths to a nuclear weapon, and end Iran’s state-sponsorship of terrorism and regional malign activity.