US imposes sanctions on Iran's drone industry in retaliation for attack on Israel

The United States has announced new sanctions against Iran and that country's drone industry, five days after the Islamic Republic's attack on Israel and in a coordinated punishment with the United Kingdom and the European Union, which have taken similar measures (although the EU has not yet specified them). Washington, which does not rule out imposing additional sanctions, has targeted 16 individuals and two entities involved in the production of unmanned aerial vehicles, in particular the Shahed used in the coup in the early hours of last Sunday. It also penalizes companies in the Iranian steel sector, and warns of additional steps in the immediate future.

“We are committed to Israel's security. We are committed to the safety of our staff and our partners in the region. And we will not hesitate to take all necessary measures to hold Iran to account,” said the President of the United States, Joe Biden, in a statement after the announcement of the sanctions.

Washington has stressed that this is a punishment adopted in coordination with allies: the European Union already announced on Wednesday that it would adopt measures and the United Kingdom, which will include the Islamic Revolutionary Guard Corps Navy in its sanctions, has also done so. It is a joint step with which Israel's partners try to demonstrate to Prime Minister Benjamin Netanyahu that there are alternative ways to hold Tehran to account, as they try to dissuade their ally from responding to the attack with military measures that could escalate the conflict and lead to unforeseeable consequences in the region.

In continued contacts between the United States and Israel since the offensive, which American fighter jets helped repel, the Biden Administration has insisted time and again that it will not engage in any measure of military aggression against Iran. Washington emphasizes to its ally that the success of the defensive systems on Sunday the 14th made Israeli superiority clear and that no more violent blow is necessary. Retaliation should focus on economic and diplomatic measures, in the opinion of the US Government.

“Together with our partners and allies, the United States defended Israel. We contributed to defeating that attack. And today we hold Iran accountable by imposing new sanctions and export controls on Iran,” Biden said in his statement.

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So far, the Netanyahu government has limited itself to indicating that it will respond, but has not specified how. It is something that could be addressed in the virtual meeting that Israeli and American representatives – including White House National Security Advisor Jake Sullivan – hold this Thursday to discuss Israel's plans for a ground offensive against the city of Rafah, in Gaza. .

The Treasury Department has designated five companies that provide components for the production of steel from the Khuzestan Steel Company (KSC), one of the largest steel manufacturers in Iran, or purchase its finished products. Three subsidiaries of the vehicle manufacturer Bahman Group, which Washington accuses of providing material support to the Iranian Islamic Revolutionary Guard, are also sanctioned.

“We use the Treasury's economic tools to degrade and hinder key aspects of Iranian malign activity, including its drone program and the revenue the regime generates to support its terrorism,” said Treasury Secretary Janet Yellen, pointing to additional measures in the future: “We will continue to deploy our sanctions authority to counter Iran with new steps in the coming days and weeks.”

Key technologies

The Commerce Department, for its part, has imposed new controls to restrict Iran's access to key technologies in the development of missiles and drones, including microelectronics products. These controls will also apply to products manufactured outside the United States, but that use American technology, and are in addition to the export restrictions that already existed for Iran, “including controls directed against Iranian participation in the supply of drones in support of “Russia's illegal war in Ukraine,” State Department spokesman Matthew Miller said in a statement.

The United States maintains a long list of sanctions against Iran, and had already imposed punitive measures against the drone industry last October.

The announcement by the Biden Administration comes after a meeting of the finance ministers and governors of the central banks of the G-7, the group of industrialized countries, in which the participants agreed to “intense coordination of any future measures to reduce the Iran's ability to acquire, produce or transfer weapons that contribute to destabilizing regional activities.

“We are committed to acting collectively to increase economic pressure against Iran. And our allies and partners have approved, or will approve, additional sanctions and measures to restrict destabilizing Iranian military programs,” the US president stated in his statement.

The State Department also points out the possibility of additional sanctions: “We will continue to work with our partners and allies to use the full range of tools at our disposal to stem revenue flows and cut off networks that support reckless Iranian proliferation that stabilizes the Middle East. and beyond”.

One possibility that the Treasury Department does not rule out, when applying new sanctions, is to punish the Iranian oil sector, one of the pillars of the country's economy. Speaking earlier this week, Yellen did not reject playing that card. But Washington would have to tread very carefully to avoid destabilizing global energy markets, something it does not want at any time, least of all in a year of an electoral campaign. Something that he has already had to take into account this week, when he announced the return of sanctions against the Venezuelan oil sector as a measure of pressure for the holding of free elections in the Andean country.

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