The United States has hit Iran’s Persian Gulf Petrochemical Industries Company (PGPIC) with economic sanctions due to its ties with the country’s Revolutionary Guards (IRGC), the Treasury department has said.
The move aims to choke off financing to the country’s largest and most profitable petrochemical group and extends to its 39 subsidiaries and “foreign-based sales agents,” Treasury said in a statement.
Those include UK-based NPC International and Philippines-based and NPC Alliance Corporation that are controlled by PGPIC.
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“This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC,” Treasury secretary, Steven Mnuchin, said in the statement.
The PGPIC group holds 40% of Iran’s total petrochemical production capacity and is responsible for 50% of the country’s petrochemical exports, Treasury said.
Treasury warned that international companies continuing to partner with PGPIC or subsidiaries and sales agents “will themselves be exposed to US sanctions.”
Following Donald Trump’s decision to abandon the 2015 nuclear deal negotiated by his predecessor, US efforts over the past year to choke off Iran’s economy have angered allies as foreign companies get caught up in the dispute.
Several countries have halted oil imports from Iran, while Europe has tried to design a mechanism to continue trading with the country without violating US sanctions.
Treasury said it is penalizing PGPIC due to its links to the economic arm of the IRGC, known as Khatam al-Anbiya. The holding company has awarded contracts to Khatam al-Anbiya “generating hundreds of millions of dollars for an IRGC economic conglomerate that stretches across Iran’s major industries.”
The new sanctions come as the Trump administration has increased economic and military pressure against Iran both because of its nuclear and missile programs as well as its support for proxy groups in Syria, Iraq, Lebanon and Yemen.
Washington in April branded the IRGC a terrorist organisation, the first time it has taken the step against part of a foreign government. The move meant anyone who dealt with the Revolutionary Guards could face prison in the United States.
The new sanctions prohibit the firm and its subsidiaries from accessing the US market or financial system, including through other foreign companies, and blocks all funds or property that is in the United States or held by a US firm.
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The penalties could extend to “any foreign financial institution that knowingly facilitates a significant financial transaction or provides significant financial services for entities designated,” the statement said.
“By targeting this network we intend to deny funding to key elements of Iran’s petrochemical sector that provide support to the IRGC,” Mnuchin said.
Tensions between Washington and Tehran have escalated further in recent weeks after Trump last month deployed additional troops to the region and resumed arm sales to Saudi Arabia to protect against what the United States said was the threat of an imminent attack.
Trump on Thursday said he would be willing to reopen talks as long as Iran agreed to give up nuclear weapons. But Tehran ruled out talks until the United States is ready to “return to normal.”
Three analysts and a former Treasury official said the latest sanctions will likely have only a modest effect because non-US companies already shy away from doing business with Iran’s petrochemicals sector because of existing sanctions.
Suzanne Maloney of the Brookings Institution think tank described the latest US sanctions as “a natural next step in what I think is a deliberately redundant array of restrictions.”
“The administration is banking on the overlapping authorities and obstacles to compound the pressure on the Iranians and create a sense that the entire economy is off limits,” she said.