U.S. sanctions two Taiwan firms over support for Iran's military drone program

Washington, July 31 (CNA) The United States is imposing sanctions on an international procurement network -- including two Taiwanese companies -- for supporting Iran's unmanned aerial vehicle (UAV) program, the U.S. State Department said Thursday.

The sanctions target five entities and one individual based in Iran, China, Taiwan and Hong Kong for procuring technology and equipment to support Iran's drone development, the State Department said.

The two Taiwanese companies are Mecatron Machinery Co. Ltd. and Joemars Machinery and Electric Industrial Co. Ltd, which are based in Taichung.

"Today's action supports President Trump's National Security Presidential Memorandum-2 to counter Iran's aggressive development of missiles and other asymmetric and conventional weapons capabilities," the department said in a statement.

"The United States will use all available means, including sanctions on entities based in third countries, to expose and disrupt Iran's schemes to procure equipment and items supporting its UAV program, which destabilizes the Middle East and beyond," the department said.

In a separate statement, the U.S. Treasury Department said the five entities and one individual had procured technology to support the Iran Aircraft Manufacturing Industrial Company (HESA), which is sanctioned by the department's Office of Foreign Assets Control (OFAC).

HESA, a state-owned subsidiary of Iran's Ministry of Defense and Armed Forces Logistics, manufactures military aircraft and Ababil-series UAVs that have been used by the Islamic Revolutionary Guard Corps (IRGC), the Treasury Department said.

Iran-based Control Afzar Tabriz Co. Ltd. procured computer numerical control (CNC) machines and equipment for HESA, using Mecatron Machinery and Joemars Machinery to ship them to Iran in knowing violation of sanctions and export controls, the Treasury Department said.

Joemars Machinery also established a China-based subsidiary, Changzhou Joemars Industrial Automation Co. Ltd., according to the Treasury Department.

All property and interests in property of the designated individuals or entities that are in the United States -- or in the possession or control of U.S. persons -- are frozen and must be reported to OFAC, the Treasury Department said.

The department also said that any entity owned 50 percent or more -- directly or indirectly -- by one or more blocked persons is itself considered blocked. OFAC regulations also generally prohibit U.S. persons, or anyone conducting transactions in or through the United States, from dealing with the property or interests of such individuals or entities.

The Treasury Department added that violations of U.S. sanctions could result in civil or criminal penalties for both U.S. and foreign individuals and entities.

In response, Taiwan's Ministry of Economic Affairs said it would urge local companies to comply with international export control laws and step up legal compliance. It also plans to invite experts to provide training on U.S. export regulations to help Taiwanese machinery firms avoid sanctions.