The US treasury department's Office of Foreign Assets Control (OFAC) has named several Iranian metals companies as Specially Designated Nationals (SDNs).

The companies in the steel, aluminium and iron sectors are likely to be of particular interest to companies with trading links or banks providing letters of credit (L/Cs) and other trade finance in the Middle East.

Revolutionary Guard connections

As well as Iranian metals companies affiliated with the Islamic Revolutionary Guard Corps (IRGC), several trading companies based in Dubai, Germany and China have been designated by OFAC because it believes they are sales agents owned or controlled IRGC affiliates.

Some of these trading companies are known to have marketed themselves as steel and metals suppliers for clients in the Middle East, Africa, and East Asia.

Direct and indirect impacts

The SDNs will have a direct impact on US-based companies and financial institutions because they are now prohibited from dealing with these entities as well as property interests associated with them.

Non-US companies and financial institutions operating internationally may also choose not to do business with the SDNs because of concerns of indirect links to them that could lead to hefty fines if US sanctions are violated.

One of the SDNs, Mobarakeh Steel, is the single largest flat steel producer in the Middle East and North Africa operating out of one of the biggest industrial complexes in Iran.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.