US Treasury sanctions Iranian automakers, rail and metals firms

The US Treasury Department announced new sanctions on Thursday 1 October targeting Iran's largest automakers, major rail companies, and manufacturing and metals firms. 1 2 The Treasury said the rail and automotive sectors are among Iran's largest remaining sources of revenue and logistical capacity, and that the action strikes "directly at the critical arteries Iran relies on to sustain its economy and evade sanctions." 1 2 According to JNS, two companies representing some 90% of Iran's domestic auto market were sanctioned, along with various subsidiaries and the country's largest motorcycle manufacturer. 2

The designations also reach foreign firms: auto parts exporters in Indonesia, the United Arab Emirates, Turkey and Hong Kong, and parts of a steel and oil export network spanning China, Germany and the Dominican Republic. Key state and privately owned passenger and freight rail servicers were also listed. 2 Named targets include Iran Khodro (IKCO) and SAIPA, which Treasury said together hold more than 90% of Iran's domestic car market; the state-owned Islamic Republic of Iran Railway Company, Raja Passenger Trains Company and the private freight line Sherkat-E Rah Ahan-E Khamle-O-Naghle; and the motorcycle maker Niroo Motor Shiraz, which the Washington Examiner said cooperates closely with the Guard and Basij. 3 4 The Washington Examiner named foreign targets as the UAE-based Troy Trading Arac Parcalari Sanayi Ve Ticket Limited Sirketi and Hong Kong-based Hessenberg Co., Limited and Tanex Global Trading Hong Kong Limited, plus two Hong Kong-based Iranian businesspeople, Ramin Keshvardoust and Mehnoosh Poursaraf Hamedani, linked to shipments of Iranian steel and oil worth tens of millions of dollars. 4

Anadolu Agency reported that Treasury also added Iran's automotive and rail sectors to its sectoral sanctions determinations, allowing it to target any entity or individual operating in them, and separately designated the Russia-linked A7 Network as a "significant transnational criminal organization", saying it processed more than $17 billion for Iran between January 2025 and June 2026. 5 The measures fall under "Operation Economic Outcast," which the Treasury launched in late August to isolate Iran and choke its revenue. Treasury Secretary Scott Bessent said it had severely diminished Iran's ability to fund its war machine and that the action lays the groundwork to drain the government's revenue "once and for all." 2 JNS notes a US blockade of the Strait of Hormuz remains in place and secondary sanctions have all but shut down Iranian air travel abroad. Arab News describes the move as Washington seeking to exert maximum pressure in its war against Iran. 2 1

Treasury said the blockade has forced Iran to rely more on rail and road for moving petroleum, fertilizer, chemicals and other goods, and that the new sanctions target those alternatives; the Washington Examiner added that Treasury alleges the railways were used to move oil by land and evade the blockade. 3 4 Reuters, carried by the Straits Times and Jerusalem Post, said Operation Economic Outcast was announced on 24 August and aims to force Tehran to negotiate an end to the war, which began with a US-Israeli strike about seven months ago. 3 6 The Washington Examiner reported that the Iranian rial hit a record low against the dollar earlier this week, and that the US blockade began in April after the 7 April ceasefire, was paused from mid-June under a Memorandum of Understanding, and resumed in mid-July when that collapsed; US Central Command said 125 commercial vessels had been redirected as of 30 September. 4