US imposes sanctions on Iran's key steel companies in final weeks of Trump's presidency

The United States Treasury Department on Tuesday imposed sanctions on Iran's key steel sector, which is one of the major sources of income for the Islamic Republic. The sanctions come in the final days of the Trump administration, which is scheduled to handover the powers on January 20. Washington designated 12 Iranian producers of steel and other metal products, including a China-based supplier of graphite electrodes and three foreign-based sales agents of Iranian metals and mining holding company.

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"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," Secretary Steven T. Mnuchin said in a statement.

Sanctions key steel companies

The Chinese company Kaifeng Pingmei New Carbon Materials Technology Co., Ltd. (KFCC), which has been sanctioned by the Trump administration, allegedly supplied thousands of metric tons of materials to several Iranian steel companies between December 2019 and June 2020. Treasury Department's Office of Foreign Assets Control (OFAC) also designated 12 Iranian steel companies, whose combined annual output capacity reaches millions of metric tons of steel product.

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The United States alleges that these companies help generate millions of dollars in funds for the "corrupt Iranian regime", which is seeking to develop weapons of mass destruction. This comes days after Iran announced that it has started enriching uranium to up to 20 percent purity, way above the threshold set under the 2015 nuclear deal. Iran is allowed to enrich uranium with not more than 4% purity. Although enriching uranium with a 20% purity mark is a violation of the deal, it is way below the 90% purity level needed to produce nuclear weapons.  

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The Trump administration has imposed several sanctions targeting the Iranian regime since 2018, ever since the United States withdrew from the Obama-era nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA). When Iran and other major powers of the world, including the US signed an agreement in 2015, it was agreed that Tehran would limit its uranium enrichment and, in return, economic sanctions against the regime would be lifted. 

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