Guidance on Actions Exporters Can Take to Prevent Illicit Diversion of Items to Support Iran’s Nuclear Weapons or Ballistic Missile Programs

It is the policy of the United States to counter Iran’s pursuit of technology that could enable it to develop nuclear weapons and missiles capable of delivering them. In support of this effort, the United States maintains comprehensive economic sanctions on Iran.

Iran’s Illicit Procurement Efforts

  • Iran is currently trying to procure items for its uranium enrichment centrifuge program. For this program, Iran will need to procure items on the Commerce Control List (CCL) such as carbon fiber (controlled under Export Control Classification Numbers (ECCNs) 1A002, 1C010, 1C210, 1C990) and filament winding machines (ECCNs 1B001, 1B101, 1B201), as well as items classified as EAR99, such as epoxy resin. Epoxy resin and related hardening/accelerator agents are necessary to bind the carbon fibers used in both uranium centrifuge and missile structures. Thus, U.S. manufacturers of such items should be particularly vigilant.
  • As outlined in International Atomic Energy Agency (IAEA) Director General El Baradei’s report of February 22, 2008, Iran has admitted to attempting to evade international sanctions to procure sensitive items, using deceptive procurement tactics to obtain items that can contribute to its weapons of mass destruction (WMD) programs.
  • Specifically, Iranian entities form front companies in other countries for the sole purpose of exporting dual-use items, including U.S.-origin items, to Iran that it can use in its nuclear and missile programs. These companies appear to be procuring dual-use items for commercial activities and enable Iran to obtain materials that would typically be prevented by export control restrictions in supplier countries. They make it difficult for businesses to know that the end user is in Iran. Furthermore, these front companies are often in third countries where U.S. companies have strong trading relationships.

Exporter Diligence

  • Not all items that Iran could use for WMD-development activities are listed on the CCL. Therefore, exporters must be vigilant on the potential end use of all items exported from the United States. (e.g., epoxy resin).
  • The exportation of any item that is subject to the EAR (including an EAR99 item) to Iran without a license is prohibited under regulations maintained by the Department of the Treasury's Office of Foreign Assets Control (OFAC). This includes any exports to a third country if the exporter knows or has reason to know that the item will be reexported to Iran.
  • Exporters should screen parties to a transaction against the Denied Persons List, Entity List, Unverified List, BIS General Orders, and the Specially Designated Nationals and Blocked Persons List.
  • Exporters should take note of any abnormal circumstances in a transaction that indicate that the export may be destined for an inappropriate end use, end user, or destination. For example:
    • unusual quantity requests;
    • paying above market prices or using unusual payment methods;
    • waivers of normal installation, training or maintenance agreements; and
    • requests for delivery to one country with original orders from a second country or direct delivery to a freight forwarder.
  • When such "red flags" arise, you should check out the suspicious circumstances and inquire about the end use, end user, or ultimate country of destination.
  • If you encounter “red flags” that you are unable to resolve with reasonable inquiry, contact BIS and the Office of Export Enforcement.
  • Companies should have in place an export compliance program and/or business procedures to be immediately responsive to theft or unauthorized delivery.
  • If you believe a previous shipment has been diverted and may have gone to an end user in Iran, we encourage you to report it to BIS.

Summary Of Steps U.S. Exporters Can Take To Prevent Unauthorized Exports To Iran

  • Remain vigilant and know your customer. 
  • Understand “Red Flag” indicators.
  • Be cautious of customers operating in transshipment countries or free trade zones.
  • Be familiar with U.S. Government screening lists. See the Consolidated Screening List.
  • Contact BIS if something does not seem right about the transaction or if you suspect a shipment may have been diverted to Iran.
  • Subscribe to the Department of the Treasury, OFAC's service to receive notifications of changes to the List of Specially Designated Nationals and Blocked Persons.
   

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