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July 31, 2024

This month’s newsletter features an investigation of two illicit
procurement agents supplying microelectronics to the Islamic Revolutionary
Guard Corps (IRGC) drone program. The report draws on U.S. government and
court documents, corporate records, social media, and other information to
explain the two agents’ history of collaboration, the tactics they used,
and how their respective networks evolved over time.

The newsletter also includes profiles of front companies supporting Iran’s
defense cooperation with Russia, including the sale of unmanned aerial
vehicles (UAVs), as well as news covering the inauguration of Iranian
President Masoud Pezeshkian, Israel’s military strikes on Yemen’s Hodeidah
port, and the expansion of two key missile production facilities in Iran.
Additions to the Iran Watch library include official statements on the
possibility of revived nuclear diplomacy, Western sanctions announcements,
and U.S. Department of Justice enforcement cases.

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PUBLICATIONS

[4]

Image credit: Wisconsin Project

Enforcement Action | [5]The Convergence and Evolution of Two Networks
Supplying Iran’s UAV Program

As Iran expands its development and production of unmanned aerial vehicles
(UAVs), it continues to seek sensitive electronics manufactured in the
United States and other Western countries. Iranian UAV producers cannot
legally obtain these goods, so they often turn to procurement agents for
help.

The Wisconsin Project conducted an open-source investigation on two such
agents based in Iran and China, Hossein Hatefi Ardakani and Gary Lam,
drawing on U.S. government and court documents, corporate records, social
media, and other information. The report explains the tactics the two
agents employed to funnel U.S.-made components to the Islamic Revolutionary
Guard Corps (IRGC) in Iran, how their respective networks evolved over
time, and what can be done to disrupt their operations.

[6]READ THE ENFORCEMENT ACTION

ENTITIES OF CONCERN

In April, the U.S. Department of the Treasury sanctioned several front
companies facilitating Iran’s defense cooperation with Russia.

[7]Sahara Thunder

A subsidiary of Iran’s [8]Ministry of Defense and Armed Forces Logistics
(MODAFL); serves as the main front company overseeing MODAFL’s commercial
activities related to the sale of UAVs to Russia; also leads a network
involved in the sale and shipment of Iranian commodities on behalf of
MODAFL to China, Russia, and Venezuela.

[9]LEARN MORE

[10]Generation Trading FZE

A MODAFL front company based in the United Arab Emirates; has helped MODAFL
facilitate the sale of sample UAV models, UAV parts, and related ground
stations to Russia’s Alabuga Special Economic Zone in support of Shahed
drone production in Russia.

[11]LEARN MORE

[12]Etemad Tejarat Misagh

An Iran-based trading company; considered by the U.S. Department of the
Treasury to be a MODAFL subsidiary; owns shares in Sahara Thunder.

[13]LEARN MORE

IN THE NEWS

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Iran’s supreme leader inaugurates Masoud Pezeshkian as Iran’s president.
(Credit: IRNA)

[15]Iran’s New President Rekindles Faint Hopes of Rapprochement with West |
The Guardian

July 28, 2024: Iran’s supreme leader formally inaugurated Masoud Pezeshkian
as president of Iran. During the ceremony, Pezeshkian promised constructive
engagement with the West. He appointed Mohammad Reza Aref as his first vice
president and is expected to name Abbas Araghchi as his foreign minister.

[16]Israeli Jets Strike Houthi Targets in Yemen After Tel Aviv Attack |
Reuters

July 20, 2024: Israel carried out an airstrike targeting sites around
Yemen’s port of Hodeidah in retaliation for a Houthi attack on Tel Aviv
using an Iranian-made drone the day before. An Israeli military
spokesperson claimed the Houthis used the port to receive Iranian weapons
shipments. The Houthis, who have already conducted 200 attacks on Israel
since October, said they would respond.

[17]Satellite Photos Show Iran Expanding Missile Production | Reuters

July 8, 2024: Satellite images showed ongoing construction at Iran’s
Modarres military base and Khojir missile production complex, with more
than 30 new buildings across the two sites. Many of the buildings are
surrounded by large dirt berms, the presence of which typically indicates
missile production because the berms are designed to limit damage caused by
accidental explosions. Unnamed Iranian officials confirmed that the
construction was intended to increase the country’s ballistic missile and
drone production.

FROM THE LIBRARY

The surprise election of Masoud Pezeshkian prompted speculation about the
possibility of revived nuclear diplomacy with the United States.
* [18]In a statement, Pezeshkian said he looked forward to “engaging in
constructive dialogue with European countries” but also said his country
would not respond to pressure – July 12.
* When U.S. National Security Communications Advisor John Kirby was asked
if the United States was prepared to make any new diplomatic overtures,
[19]he responded flatly, “No” – July 8.
* U.S. Secretary of State Antony Blinken [20]said that he was waiting to
see whether Iran was serious about pulling back on its nuclear program, but
in the meantime, “We of course have been maximizing pressure on Iran across
the board” – July 19.

The United States and European Union made sanctions-related announcements.
* The U.S. Department of the Treasury [21]designated five individuals and
seven companies in China, Hong Kong, and Iran that have helped MODAFL
procure accelerometers, gyroscopes, and other parts for Iranian missiles
and UAVs – July 30.
* The U.S. Department of State designated [22]Hakiman Shargh Research
Company for its involvement in research and development of chemical weapons
– July 12.
* The European Union [23]extended the duration of its sanctions framework
related to Iran’s military support for Russia and non-state groups in the
Middle East until July 2025 – July 15.

The U.S. Department of Justice publicized two court cases involving the
enforcement of sanctions against Iran.
* Alabama resident Ray Hunt [24]pleaded guilty to violating Iran
sanctions. He used his company, Vega Tools LLC, to illegally export
U.S.-manufactured industrial equipment for use in Iran’s oil, gas, and
petrochemical industries – July 18.
* The United Kingdom [25]extradited Iranian national Saeid Haji Agha
Mousaei to the United States. Mousaei is accused of obtaining advanced
dual-use electronics from the United States and re-exporting them to Iran
– July 23.

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 © 2024 - Wisconsin Project on Nuclear Arms Control

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