Iran Petrochemical Industry Targeted for U.S. Sanctions

The U.S. announced sanctions today aimed at Iran’s petrochemical industry, targeting the Persian Gulf nation’s second-largest source of foreign revenue in an effort further isolate it from the international financial system.

The Treasury Department also cited companies in Kyrgyzstan, Ukraine and the United Arab Emirates, saying they leased aircraft that two Iranian carriers used to move “illicit cargo” to help the Syrian regime fight its opposition.

“We are committed to intensifying the pressure against Iran, not only by adopting new sanctions, but also by actively enforcing our sanctions and preventing sanctions evasion,” Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen said in a statement.

The U.S. is ramping up sanctions in an effort to dissuade Iran from pursuing a nuclear program that the West suspects is meant to produce weapons. Iran insists that it is for civilian purposes.

“It is a losing strategy for companies to assist Iran in evading sanctions and today’s announcement serves as a warning,” said Senator Robert Menendez, the New Jersey Democrat who heads the Senate Foreign Relations Committee. “Cease this illicit activity immediately or face severe consequences.”

‘Economic Hardship’

Iran’s supreme leader, Ayatollah Ali Khamenei, “must understand that every day going forward will result in increased economic hardship unless Iran changes course immediately,” Menendez said in a statement.

The sanctions announcement came a day after an annual State Department report on terrorism said Iran’s sponsorship of terrorism and terrorist activity by Hezbollah, which Iran backs, “have reached a tempo unseen since the 1990s, with attacks plotted in Southeast Asia, Europe, and Africa.”

Kyrgyzstan’s Kyrgyz Trans Avia, Ukraine’s Ukrainian-Mediterranean Air, known as Um Air, and Sirjanco Trading LLC of the United Arab Emirates were all cited for helping Iran’s Mahan Air and Iran Air acquire aircraft that moved people and illicit cargo, according to a Treasury statement.

Petrochemical Sanctions

The petrochemical sanctions, announced by the State and Treasury departments, were the authorized under an executive order President Barack Obama signed last year allowing the U.S. to penalize companies involved in the purchase or acquisition of Iranian petrochemicals.

The Department of State imposed sanctions on Jam Petrochemical Co. and Niksima Food and Beverage JLT for knowingly doing business with Iran’s petrochemical sector, while Treasury designated eight Iranian petrochemical companies as owned or controlled by Iran’s government and subject to sanctions.

Ferland Co., based in Cyprus and Ukraine, was targeted for trying to disguise the source of Iranian oil and evade sanctions by passing it off as Iraqi in origin. To do that, Ferland helped arrange ship-to-ship transfers of oil among three tankers and furnished a falsified certificate of origin, the Treasury said.

The sanctions against Ferland ban visas for corporate officers or loans from U.S. financial institutions, and prohibit financial, property or foreign exchange transactions subject to U.S. jurisdiction.

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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