TEHRAN: A handout photo released by the Iranian army on Tuesday shows officials inspecting drones on display before a military drone drill at an undisclosed location.—AFP
TEHRAN: A handout photo released by the Iranian army on Tuesday shows officials inspecting drones on display before a military drone drill at an undisclosed location.—AFP

WASHINGTON: The United States on Tuesday blacklisted a Chinese company that makes elements for steel production, 12 Iranian steel and metals makers and three foreign-based sales agents of a major Iranian metals and mining holding company, seeking to deprive Iran of revenues as US President Donald Trump’s term winds down.

In a statement, the US Treasury Department named the China-based company as Kaifeng Pingmei New Carbon Materials Technology Co Ltd. (KFCC), saying it specialised in the manufacture of carbon materials and provided thousands of metric tonnes of materials to Iranian steel companies between December 2019 and June 2020.

Among the 12 Iranian companies blacklisted are the Pasargad Steel Complex and the Gilan Steel Complex Co, both of which were designated under Executive Order 13871 for operating in the Iranian steel sector.

The others are: Iran-based Middle East Mines and Mineral Industries Development Holding Co (MIDHCO), Khazar Steel Co, Vian Steel Complex, South Rouhina Steel Complex, Yazd Industrial Constructional Steel Rolling Mill, West Alborz Steel Complex, Esfarayen Industrial Complex, Bonab Steel Industry Complex, Sirjan Iranian Steel and Zarand Iranian Steel Co.

The Treasury said it was also designating MIDHCOs Germany-based subsidiary GMI Projects Hamburg GmbH, its China-based World Mining Industry Co Ltd and UK-based GMI Projects Ltd for being owned or controlled by MIDHCO.

“The Trump Administration remains committed to denying revenue flowing to the Iranian regime as it continues to sponsor terrorist groups, support oppressive regimes, and seek weapons of mass destruction,” Treasury Sec­r­e­tary Steven Mnuchin said in the statement. Trump’s term ends on Jan 20, when Democrat President-elect Joe Biden is to be sworn in to succeed him.

Iran’s blocked oil & gas revenues

South Korea holds $7 billion in Iranian funds from oil sales, according to Iranian officials.

Iran has been unable to obtain tens of billions of dollars of its assets in foreign banks, mainly from exports of oil and gas, due to US sanctions on its banking and energy sectors.

Iran has repeatedly asked the countries for access to the blocked revenues, even offering barter deals. But its efforts, including attempts to buy humanitarian goods and medicine which are exempt from US sanctions, have mostly failed.

Some of the frozen assets consist of money that Iran paid to Western countries for military purchases that were never delivered to Tehran when the Islamic Republic was established following its 1979 revolution.

Iran seized a South Korean ship on Monday in what Washington has suggested is an attempt to assert Iranian demands for its frozen revenues there.

South Korea, normally one of Iran’s largest oil customers, received a waiver in 2018 from the United States to continue purchases of Iranian oil for several months.

However, after the United States placed a total ban on Iran’s oil exports and sanctions on its banking sector in 2019, the revenues became blocked in Seoul.

The Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati warned Seoul in June 2020 that Iran would take legal action to gain access to the funds. Neighbouring Iraq owes more than $6 billion to Tehran for importing gas and electricity, according to Iranian officials. Iran reduced the gas flows to Iraq in December as a warning to Baghdad to settle its outstanding gas dues.

Iraq has paid some of its debts over the years, but US sanctions and economic troubles in the country have made the transfer of money much slower than Iran expected.

Hemmati said in October that Baghdad had agreed to release frozen funds for the purchase of basic commodities.

Iranian state media have assessed Iranian revenues in the Chinese banks as high as $20 billion.

However, Iranian Foreign Ministry spokesman Saeed Khatibzadeh said in October 2020 that Iran had no blocked assets in China. He said Iran had some “revenues” in the country that could be used when Iran needed them.

China has continued buying Iranian oil in defiance of the US sanctions, providing Tehran’s struggling economy with a financial lifeline.

Published in Dawn, January 6th, 2021

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