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December 18, 2025

This month’s newsletter features a report about the counterproliferation
lessons from the China-linked spread of a German-designed engine that
powers Iran’s Shahed-136 suicide drones, as well as news about the U.S.
seizure of weapon components from a ship bound to Iran from China, Iranian
money laundering through the United Arab Emirates to support Hezbollah, and
the use of Western-made goods by a company linked to the Iranian
military’s nuclear weapons research.

Also featured are profiles of multiple entities involved in Iran’s
acquisition and proliferation of Limbach drone engines. Additions to the
Iran Watch library include a sanctions list update and guidance documents
published by the Australian government.

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PUBLICATIONS

[4]

Credit: Wisconsin Project

Report | [5]The Cat’s Out of the Bag: Counterproliferation Lessons from the
Curious Case of Limbach Engines

The destructive spread of the Iranian-designed Shahed-136 suicide drone
from the Red Sea to Ukraine has been one of the most consequential and
instructive proliferation cases in the past decade. To fly, the drone uses
a piston engine designed by a small German company controlled since at
least 2017 by Chinese investors. This report traces the proliferation of
that engine, and with it Shahed suicide drones, which quietly ramped up in
parallel with a Chinese company’s acquisition of the German firm before
bursting into view globally with Russia’s 2022 invasion of Ukraine,
Tehran’s decision to supply Moscow with drones, and Russia’s successful
push to mass produce its own version of the Shahed-136 with that Chinese
company’s help.

The report then outlines the policy lessons that can be drawn from the
engines’ proliferation and offers recommendations to prevent the production
of sensitive technology from getting out of Western control. These lessons
include the need for export control regimes to have a geographic scope
beyond the targeted end-use countries; the importance of screening foreign
investments in Western firms that produce widely traded dual-use goods; and
the imperative of using targeted sanctions to hold the owners and
affiliates of sanctions-evading companies to account.

[6]READ THE REPORT

ENTITIES OF CONCERN

Iran’s acquisition, reverse-engineering, and onward proliferation of
Western-designed drone engines has been enabled by a network of entities
based in Iran and China.

[7]Shahed Aviation Industries

An Iranian company that specializes in the design and manufacture of
aircraft, including unmanned aerial vehicles (UAVs); subordinate to the
[8]Islamic Revolutionary Guard Corps Aerospace Force; involved in the
production of Shahed-series UAVs.

[9]LEARN MORE

[10]Oje Parvaz Mado Nafar Company

An Iran-based company specialized in manufacturing UAV components; has
helped [11]Abdollah Mehrabi acquire UAV engines for the
[12]Self-Sufficiency Jihad Organization of the IRGC Aerospace Force;
manufactures UAV engines reverse-engineered from foreign models.

[13]LEARN MORE

[14]Yousef Aboutalebi

Managing director of Oje Parvaz Mado Nafar Company; has procured UAV
engines for the IRGC Navy, [15]Iran Aircraft Manufacturing Industries
(HESA), [16]Qods Aviation Industries (QAI), and other Iranian military
entities; has registered companies in China.

[17]LEARN MORE

[18]Beijing MicroPilot UAV Flight Control Systems

A China-based company that sells complete UAVs as well as autopilot systems
and engines for UAVs; sells engines manufactured by Oje Parvaz Mado Nafar
Company, including unlicensed copies of engines originally produced in
Europe that have been used by the Houthis.

[19]LEARN MORE

IN THE NEWS

[20]

U.S. Marines conduct fast-rope training abord the USS Boxer in the
Indo-Pacific Command area of operations. (Photo Credit: Sgt. Joseph Helms,
U.S. Marine Corps)

[21]U.S. Forces Raid Ship, Seize Cargo Headed to Iran from China[22] | Wall
Street Journal

December 12, 2025: U.S. special operations forces boarded a ship in the
Indian Ocean in November and seized dual-use items bound from China to
Iran. According to U.S. officials, the seized items had applications in
conventional weapons and were being delivered to companies that procure
goods for Iran's missile program. The cargo was destroyed after being
seized.

[23]Iranian Funds for Hezbollah Are Flowing Through Dubai | Wall Street
Journal

November 27, 2025: Iran has sent hundreds of millions of dollars to
Hezbollah since late 2024 using money exchanges and other companies in
located in Dubai, in order to help Hezbollah rebuild after its war with
Israel. The transactions are often carried out using the hawala system of
parallel accounts between dealers in Dubai and Lebanon. According to Arab
officials, Iran has also sent couriers with small amounts of cash and
jewelry to avoid Lebanese airport controls that have been tightened as a
result of the Israel-Hezbollah ceasefire agreement. According to a senior
U.S. official, the United States is also concerned about funds being
smuggled to Hezbollah through Turkey and Iraq and wants Lebanon to shut
down the Hezbollah-linked financial institution Al-Qard Al-Hassan.

[24]Iranian Nuclear Scientists Sell Products with Croydon-made Parts |
Financial Times

November 25, 2025: Imen Gostar Raman Kish, a company controlled by senior
officials in Iran's Organization of Defensive Innovation and Research
(SPND), a military nuclear research institute, advertises equipment
containing radiation-detection tubes manufactured by U.K.-based company
Centronic Ltd. The Mindex Center, the export agency of Iran's Ministry of
Defense and Armed Forces Logistics (MODAFL), also advertises the same
equipment. The chairman and vice-chairman of Imen Gostar are both senior
SPND officials sanctioned by the United States, and its CEO traveled to
Russia in 2024 as part of an Iranian delegation seeking technologies usable
in nuclear weapons development. Imen Gostar also claims to sell
plastic-scintillator detectors that contain components produced by
U.S.-based company Eljen Technology as well as a photomultiplier tube
produced by a brand controlled by Exosens, Centronic's France-based parent
company. There is no evidence that the Western manufacturers knowingly sold
the components to Iran.

FROM THE LIBRARY

Australia [25]implemented the snapback of United Nations sanctions on Iran.
* The Ministry of Foreign Affairs and Trade [26]promulgated updated Iran
sanctions regulations – December 11
* The Ministry also [27]published a reference document outlining the
framework of Australia’s Iran-related sanctions – December 12
* The Australian government published advisory notes on Iranian
[28]procurement networks, [29]prohibited exports to Iran, and the sanctions
risks associated with Iranian [30]shadow banking networks – December 12

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 © 2025 - Wisconsin Project on Nuclear Arms Control

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