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July 26, 2023

This month’s newsletter features a look at a recent U.S. indictment of
Chinese national Xiangjiang Qiao. Qiao is an associate of Li Fang Wei (Karl
Lee), a major supplier of critical components to Iran’s missile program
from 2006 until at least 2014. Although Lee has garnered less attention in
recent years and may be in prison in China, an examination of open-source
evidence suggests that his network continues to operate.

The newsletter also includes a profile of an Iranian entity newly
identified as producing components for Iran’s drone program, as well as
news about Indonesia’s seizure of an Iranian-flagged tanker, Russia’s
progress in setting up a drone facility backed by Iran, and the European
Union’s plans to keep certain sanctions against Iran that are otherwise set
to expire in October. Additions to the Iran Watch library cover updates to
EU and U.K. sanctions against Iran, U.S. sanctions enforcement efforts, and
U.N. reports on the implementation of Security Council resolution 2231.

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PUBLICATIONS

[4]

A workshop at the Sinotech Dalian Carbon and Graphite Manufacturing
Corporation facility. (Credit: [link removed])

Enforcement Action | [5]Karl Lee’s Network Lives On

From 2006 until at least 2014, Li Fang Wei (Karl Lee) was a major supplier
of critical components to Iran’s missile program. Although he has garnered
less attention in recent years, a new indictment by the U.S. Department of
Justice, a documentary film released in Europe, and other open-source
evidence reveal new insights into the current status of his
network—including the possibility that it continues to operate without
Lee’s active involvement.

[6]READ THE ENFORCEMENT ACTION

ENTITIES OF CONCERN

In July, Conflict Armament Research, a UK-based investigative organization,
identified Sarmad Electronic Sepahan Company as the producer of several
components found in unmanned aerial vehicles (UAVs) used by Russia in
Ukraine. The company is not on any U.N. or Western sanctions list and was
not previously known to be involved in Iran’s drone industry.

[7]Sarmad Electronic Sepahan Company

An Iran-based company specializing in the design and manufacture of
electronic and electromechanical parts, particularly avionics; has supplied
components for the Mohajer-6 and the Shahed-131.

[8]LEARN MORE

[9]Qods Aviation Industries

An Iranian company that designs and manufactures UAVs, including the
Mohajer-6; a subsidiary of the Iran Aviation Industries Organization
(IAIO); has reportedly supplied UAVs to all branches of the Iranian
military and buyers in Africa and Latin America.

[10]LEARN MORE

[11]Shahed Aviation Industries

An Iranian company that specializes in the design and manufacture of
aircraft, including helicopters and UAVs; subordinate to the [12]Islamic
Revolutionary Guard Corps Aerospace Force (IRGCASF); Shahed-series one-way
attack UAVs have been used in strikes against civilian infrastructure in
Ukraine and the Middle East.

[13]LEARN MORE

IN THE NEWS

[14]

A screenshot from an official Russian video showing a soldier operating an
Albatross M5 drone. (Credit: Russian Ministry of Defense via Financial
Times)

[15]Indonesia Seizes Iranian-flagged Tanker Suspected of Illegal Oil
Transfer | Reuters

July 12, 2023: Indonesia's coast guard seized the MT Arman 114, an
Iranian-flagged oil tanker, in the North Natuna Sea on the suspicion that
it was illegally transporting crude oil. The tanker was engaged in a
ship-to-ship oil transfer at sea with the Cameroon-flagged MT S Tinos and
was spoofing its automatic identification system (AIS) data to indicate
that it was in another location, according to Indonesian authorities.

[16]Russia Deploys ‘Albatross’ Made in Iran-backed Drone Factory |
Financial Times

July 6, 2023: The Alabuga special economic zone business park, where the
United States has said Russia and Iran are working together to establish an
unmanned aerial vehicle (UAV) factory, has begun recruiting drone engineers
and Farsi speakers. Albatross, a Russian agricultural drone manufacturer,
has already inaugurated a production facility at the same site and has
supplied 50 M5 reconnaissance drones to the Russian military. Among its
suppliers is Alabuga-Fiber, a carbon fiber producer that operates in the
same business park and that is sanctioned by the United States. Albatross
also claims to import parts from China and advertises equipment made by
U.S., European, and Asian companies.

[17]Europeans Plan to Keep Ballistic Missile Sanctions on Iran | Reuters

June 29, 2023: European diplomats have told their Iranian counterparts that
they plan to retain certain ballistic missile-related sanctions against
Iran that are otherwise set to expire in October. The 2015 nuclear
agreement stipulated that such sanctions would be lifted on Transition Day,
eight years after the agreement was adopted. Retaining the sanctions would
require the approval of all 27 EU member states.

FROM THE LIBRARY

The European Union and the United Kingdom each announced plans for new
sanctions regimes targeting Iran.
* The [18]new EU framework, which has not yet been published, will aim to
counter Iran’s UAV program - July 20.
* The [19]United Kingdom plans to “significantly expand” its authority to
designate Iranian entities, particularly key decisionmakers, by adopting
broader sanctioning criteria - July 6.
* The EU [20]adopted targeted sanctions against five individuals involved
in Iran’s UAV transfers to Russia - July 20.

The United States took steps to enforce sanctions and preserve freedom of
navigation in and around the Persian Gulf amid Iranian [21]seizures of
commercial vessels there.
* The U.S. Department of Justice [22]unsealed an indictment against Gal
Luft, a dual U.S.-Israeli citizen. Luft allegedly attempted to broker deals
for Iranian oil sales - July 20.
* The U.S. Department of Justice [23]filed a forfeiture action for 9,000
rifles, 194 rocket launchers, and over 70 anti-tank missiles that were
seized during four separate interdictions in 2021 and 2023 - July 6.
* Over the span of several hours, the U.S. Navy [24]prevented Iranian
forces from seizing two commercial tankers in international waters off the
coast of Oman - July 5.

The U.N. Security Council released two biannual reports on the
implementation of resolution 2231, which underpins the 2015 nuclear accord
and imposes restrictions on missile-related transfers.
* The [25]U.N. Secretary-General’s report discusses Iran’s drone
transfers to Russia as potential violations of resolution 2231 but the U.N.
secretariat still has not investigated the weapons’ provenance, due to
Russian objections - June 29.
* [26]The 2231 Facilitator’s report contained a claim by Israel’s
permanent representative that Iran attempted to launch a satellite using
the Ghaem-100 rocket on March 4, 2023. The space launch has not been
publicly reported - June 29.

Iran Watch is a website published by the Wisconsin Project on Nuclear Arms
Control. The Wisconsin Project is a non-profit, non-partisan organization
that conducts research, advocacy, and public education aimed at inhibiting
strategic trade from contributing to the proliferation of weapons of mass
destruction.

Copyright © 2023 - Wisconsin Project on Nuclear Arms Control

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