Drone Manufacturers and Suppliers to Russia Blasted by Governments

By David Williams, ACSS Editor
January 14, 2023

The extent of sanctions against Russia has been far-reaching, without a stone being unturned. The US, EU, UK, Canada and other countries have broad programs often working in concert. Russia’s manufacturing abilities have been weakened, and it has turned to other countries for supplies.

As a country marked with many sanctions itself, Iran’s choice of trading partners is limited. In that respect, Russia and Iran are like two peas in a pod.

As a prominent manufacturer and supplier of unmanned aerial vehicles (UAVs) or “drones,” Iran has secured in Russia a keen buyer. Drones have multiple uses, among them deployment in war. Ukraine knows only too well this application, having suffered casualties and destruction from their guidance by Russian tacticians attacking military and urban targets.

Iran’s and Russia’s action violates UN Security Council Resolution 2231, which provides that the transfer from or to Iran of specified items requires prior approval from the Security Council.

UAVs and dual-use goods supplied to make drones are on the radar of government agencies, and a raft of designations have mirrored their illegal supply to Russia.

OFAC Sanctions QAI, Executives and AIO Director

The US has rallied to Ukraine’s defense by sanctioning Qods Aviation Industries (QAI), a key Iranian drone manufacturer. Six QAI executives and board members were designated by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). OFAC updated QAI’s entry on the Specially Designated Nationals and Blocked Persons List (SDN List) to include its new alias, Light Airplanes Design and Manufacturing Industries.

OFAC also designated the director of Iran’s Aerospace Industries Organization (AIO), the key organization responsible for overseeing Iran’s ballistic missile programs.

Secretary of the Treasury Janet Yellen said: “We will continue to use every tool at our disposal to deny Putin the weapons that he is using to wage his barbaric and unprovoked war on Ukraine. The Kremlin’s reliance on suppliers of last resort like Iran shows their desperation in the face of brave Ukrainian resistance and the success of our global coalition in disrupting Russian military supply chains and denying them the inputs they need to replace weapons lost on the battlefield. The United States will act swiftly against individuals and entities supporting Iran’s UAV and ballistic missile programs and will stand resolutely in support of the people of Ukraine.”

The designations are pursuant to Executive Order (EO) 13382, Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters. They follow the December 9, 2022, November 15, 2022, and September 8, 2022, designations of individuals and entities involved in the production and transfer of Iranian Shahed- and Mohajer-series UAVs, which OFAC said Moscow is using in attacks targeting Ukraine’s critical infrastructure.

QAI, overseen by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), was designated under EO 13382 on December 12, 2013. MODAFL and the US-designated Islamic Revolutionary Guard Corps (IRGC) contract with QAI for aviation and air defense-related projects, most notably the design and manufacture of the Mohajer-6 UAVs transferred to Russia, OFAC said. QAI was designated under EO 14024, Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation, on November 15, 2022.

Executives Designated under EO 13382

  • Seyed Hojatollah Ghoreishiis responsible for negotiating Iran’s agreement with Russia to supply Iranian UAVs for Russia’s war in Ukraine, OFAC said. Ghoreishi is the QAI chairman, head of the supply, research, and industry affairs section of MODAFL and deputy minister of defense.
  • Ghassem Damavandian,QAI managing director and a member of the firm’s board, has “likely facilitated” the supply of UAVs to Iranian military services and trained Russian personnel on their use, OFAC said.
  • Hamidreza Sharifi-Tehrani, a primary member of QAI’s board, has “undoubtedly been involved” in the supply of UAVs and related equipment to Iranian military services, OFAC said, pointing to his travel to “international conferences related to UAVs.”
  • Fellow board members Reza Khaki, Majid Reza Niyazi-Angili, and Vali Arlanizadeh.
  • AIO director Nader Khoon Siavash oversees Iran’s ballistic missile programs. In his role as AIO Director, OFAC said Siavash oversees AIO’s ballistic missile production and testing, and he deals with international suppliers. AIO was sanctioned under EO 13382 on June 28, 2005. OFAC said Iran’s central bank has siphoned millions in discounted foreign currency “ostensibly earmarked for importers of essential goods to AIO, underscoring the regime’s prioritization of its missile programs at the expense of its own citizens.”

EU, UK and Canada Add to their Designation Lists

In October, EU member states and the UK agreed on fresh sanctions against three individuals and one entity for supplying Iranian drones. Both cited Russia’s and Iran’s violation of UN Security Council Resolution 2231.

The individuals are major general Mohamad Bagheri, chief of staff of the Iranian armed forces, general Sayed Hojatollah Qureishi, the head of the supply, research and industrial affairs division at Iran’s ministry of defense and armed forces logistics, and brigadier general Saeed Aghajani, the UAV IRGC aerospace force command chief. The entity is Shahed Aviation Industries, which designs and develops kamikaze drones.

The UK Foreign, Commonwealth & Development Office said that open-source evidence had shown Russia’s defense company and drone producer Kronshtadt “struggles to maintain production” since being sanctioned in March 2022. The EU said it has proof that Iran sold drones to Russia since the war began last February.

Designees are subject to travel bans and asset freezes, and EU and UK citizens and companies are forbidden from making funds available to them.

Canada sanctioned Shahed Aviation Industries and QAI in November. It later added Baharestan Kish, a company contracted with the Islamic Revolutionary Guard Corp to provide drone research.

Australia is Distinguished by its Absence

By contrast, Australia is out of step with its allies in imposing sanctions on Iran’s participation in the Russia-Ukraine war. Oved Lobel, a policy analyst at the Australia/Israel & Jewish Affairs Council, has been critical of the Australian government.

“Australia has a moral and strategic imperative to join its allies in punishing Iran not only for its domestic crackdown but for its material aid to Russia in killing Ukrainians as well,” Nobel wrote in news.com.au. This will not only provide practical help for Iranian protesters and Ukrainian civilians, but it will send a powerful message that Australia is willing to stand up for its principles and act in concert with like-minded countries,” he wrote.

“Conversely, an inability or unwillingness to take a stand on such a straightforward issue sends precisely the opposite message, whetting the appetite of an imperial power far more dangerous and far closer to home.”

Following the Law

There are contrasting opinions on sanctions policies. Sanctions compliance officers are concerned with following the law in their jurisdiction. While they are entitled to disagree with it personally, in a place of work, their job is to ensure their companies comply with sanctions law.

The West is on the same page regarding its trade restrictions with Russia and Iran. It also follows United Nations directives, such as curtailing trade with Iran to control its nuclear program.

Sanctions have long played a role as a peaceful alternative to military force to effect change. While the war in Ukraine shows no signs of ending, the West will continue to maintain and step up its sanctions program. All we can hope for is a quick and peaceful outcome.

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