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The U.S. Treasury Department announced June 13, 2006, it has designated four Chinese companies, and one of the firms’ U.S. representative, under Executive Order (EO) 13382 for supplying missile-related and dual-use components to the Iranian military and other Iranian entities. The designation freezes the U.S. assets of the designees and prohibits U.S. persons (including corporations) from engaging in transactions with them.
Treasury indicates the four Chinese firms “have provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of” the Iranian buyers.
Iran presently is reviewing an EU-U.S. proposal to give up proliferation-sensitive aspects of its nuclear program, with the Iranian matter also remaining before the UN Security Council (UNSC) and the International Atomic Energy Agency (IAEA) Board of Governors. China holds a veto on the UNSC.
Designees
Companies subject to the June 13, 2006, Treasury Department designation include:
Iranian entities
The five designated entities are said to have engaged in prohibited business with the following Iranian entities:
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Aerospace Industries Organization (AIO), described as “a subsidiary of the Iranian Ministry of Defense and Armed Forces Logistics … the overall manager and coordinator of Iran's missile program, overseeing all of Iran's missile industries”
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Shahid Hemmat Industrial Group (SHIG), described as being responsible for Iran's liquid-fueled ballistic missile programs, including:
- Shahid Bakeri Industrial Group (SBIG), described as an AIO affiliate involved in Iran's missile programs, producing weapons among which are included two capable of carrying at least chemical warheads:
- the Fateh-110 missile (range 200 km)
- Fajr rocket systems, a series of North Korean-designed rockets produced under license by SBIG (range 40-100 km)
All Three Iranian entities were included in the annex to EO 13382 by President George W. Bush.
EO 13382 Framework
EO 13382, addressing the proliferation of weapons of mass destruction (WMD) and their delivery systems, was signed by Bush to be effective June 29, 2005, under the
EO 13382 freezes U.S. assets of designated entities and prohibits U.S. persons from doing business with them. It also applies itself to mere attempts to evade or avoid the requirements of the Order, mere conspiracy to commit a violation, and not just regular business transactions but also donations to designated persons and entities.
EO 13382 sets out a list of designated entities in its own Annex and delegates to the secretary of state and the secretary of the treasury the authority to designate additional persons and entities, acting in consultation with each other, the attorney general, and other relevant agencies, when the designees have been involved with banned WMD or WMD delivery system proliferation.
Treasury Department WMD/nonproliferation sanctions are administered by the Office of Foreign Assets Control.
In addition to the five entities named on June 13, 2006, the Treasury Department has, acting under EO 13382, designated:
State Department Sanctions
The Chinese firms designated by the Treasury Department on June 13, 2006, previously had been subjected to sanctions by the State Department under the Iran Nonproliferation Act of 2000, with one also having been subjected to an import ban under EO 12938 as amended (EO 12938 most recently was amended by EO 13382).
Further reading:
“Aerospace Industries Organization (AIO),” Jane’s FastTrack to Defence Industry, http://fasttrack.janes.com/janesdata/ft/1998/1999/c00428609.html
“China’s Missile-Related Facilities/Organizations,” Nuclear Threat Initiative,
http://www.nti.org/db/china/mslorg.htm
“Executive Order: Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters,” text of EO 13382, June 29, 2005, http://www.whitehouse.gov/news/releases/2005/06/20050629.html
“Iran Nonproliferation Act of 2000,” 50 U.S.C. 1701 note, June 7, 2006, http://www.state.gov/t/isn/c15234.htm (State Department chart listing dates of sanctions and links to Federal Register notices)
Iran Nonproliferation Act of 2000, Pub. L. 106-178, March 14, 2000,
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?
dbname=106_cong_public_laws&docid=f:publ178.106.pdf (text of Act)
Shirley A. Kan, “China and Proliferation of Weapons of Mass Destruction: Policy Issues,” Congressional Research Service, Jan. 31, 2006, http://fpc.state.gov/documents/organization/61496.pdf
"Nonproliferation: What You Need To Know About Treasury Restrictions: Executive Order 13382, "Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters"; the Weapons of Mass Destruction Trade Control Regulations (Part 539 of Title 31, C.F.R); and the Highly Enriched Uranium (HEU) Agreement Assets Control Regulations (Part 540 of Title 31, C.F.R)" Treasury Department, Office of Foreign Assets Control, June 13, 2006, http://www.treasury.gov/offices/enforcement/ofac/programs/wmd/wmd.pdf
Judy Mathewson, “Chinese Companies Accused by U.S. of Helping Iran on Missiles,” Bloomberg, June 13, 2006, http://www.bloomberg.com/apps/news?pid=
10000080&sid=aSZ1QSUMm.ao&refer=asia
“Treasury Designates U.S. and Chinese Companies Supporting Iranian Missile Proliferation,” Treasury Department news release JS-4317, June 13, 2006, http://www.treas.gov/press/releases/js4317.htm
“US cites China firms for supporting Iran military,” Reuters, June 13, 2006, http://www.boston.com/news/world/asia/articles/2006/06/13/
us_cites_china_firms_for_supporting_iran_military/
“Weapons of Mass Destruction/Non-proliferation Sanctions,” Treasury Department, Office of Foreign Assets Control,http://www.treas.gov/offices/enforcement/ofac/programs/wmd/wmd.shtml
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