United States imposes penalties on two Taiwanese companies
The United States has imposed sanctions on two Taiwanese companies, Mecatron Machinery Co. Ltd. and Joemars Machinery and Electric Industrial Co. Ltd., for their involvement in supporting Iran's military drone program. The sanctions were announced by the US Department of State on Thursday.
According to the US Treasury Department, these Taichung-based firms were involved in procuring and facilitating the shipment of critical technology, specifically computer numerical control (CNC) machines and related equipment, to Iran Aircraft Manufacturing Industrial Company (HESA), an Iranian state-owned enterprise linked to the defense ministry that manufactures Iran’s drones.
The sanctions, part of a broader US effort to disrupt Iran’s development of asymmetric weapons capabilities, freeze the U.S. assets of the Taiwanese companies and prohibit U.S. businesses from dealing with them without authorization. The Treasury Department also stated that any entity owned 50 percent or more - directly or indirectly - by one or more blocked person is itself considered blocked.
In response to these sanctions, the Ministry of Economic Affairs in Taipei has announced its intention to urge local companies to comply with international export control laws and step up legal compliance. The ministry plans to invite experts to provide training on US export regulations to help Taiwanese machinery firms avoid sanctions.
The sanctions target five entities and one individual based in Taiwan, Iran, China, and Hong Kong. The US Department of the Treasury's statement emphasized the use of all available means, including sanctions on entities based in third countries, to disrupt Iran's procurement of equipment for its UAV program.
The sanctions are in response to supporting Iran's uncrewed aerial vehicle (UAV) program, which allegedly destabilizes the Middle East and beyond. The US has imposed sanctions on an international procurement network, including the two Taiwanese companies.
HESA manufactures military aircraft and Ababil-series UAVs that have been used by the Islamic Revolutionary Guard Corps, according to the US Department of the Treasury. Iran-based Control Afzar Tabriz Co Ltd procured CNC machines and equipment for HESA, using Mecatron Machinery and Joemars Machinery to ship them to Iran in a knowing breach of sanctions and export controls, according to the Treasury Department.
The US Department of State's statement mentioned that the sanctions support President Trump's efforts to counter Iran's weapons capabilities. Breaches of US sanctions could result in civil or criminal penalties for both US and foreign individuals and entities, as emphasized by the US Treasury Department.
The sanctions aim to counter Iran's aggressive development of missiles and other asymmetric and conventional weapons capabilities, as stated in President Trump's National Security Presidential Memorandum-2. The US government has made it clear that it will use all available means to disrupt Iran's procurement of equipment for its UAV program.
The sanctions on Mecatron Machinery Co. Ltd. and Joemars Machinery and Electric Industrial Co. Ltd., announced by the US Department of State, extend to the aerospace industry, as these Taichung-based firms are accused of supplying critical technology, including CNC machines, to Iran's state-owned aerospace company, HESA. Financial institutions are also advised to comply with the sanctions, as any entity owned 50% or more by these blocked firms is itself considered blocked. Furthermore, the US government, through the sanctions, aims to disrupt the finance and procurement network supporting Iran's uncrewed aerial vehicle (UAV) program, a key part of its unsettling expansion of military capabilities in the Middle East and beyond.
