The U.S. Treasury on Oct. 1 added Iran’s largest automakers and key rail operators to sanctions under Operation Economic Outcast, aiming to cut funds that Washington says support Iran’s war, missile and cyber programs. Officials said a U.S. blockade of oil through the Strait of Hormuz has pushed Tehran to rely on autos and rail to move fuel and other goods, and the new designations target those alternative transport routes. Named firms include Iran Khodro (IKCO), SAIPA and several state and private rail companies.
U.S. Sanctions Iran's Auto and Rail Giants, Targeting Supply Lines After Strait Blockade
FILE PHOTO: An Iranian technician works at a production line of carmaker Iran Khodro, west of Tehran February 6, 2016. REUTERS/Raheb Homavandi/TIMA/File Photo
WASHINGTON, Oct. 1 — The Trump administration on Thursday moved to expand economic pressure on Iran by imposing fresh U.S. Treasury sanctions on major automotive and rail companies, as well as suppliers to those sectors. The measures are part of a broader effort to choke off revenue streams Washington says fund Tehran's military and cyber programs.
Operation Economic Outcast, unveiled on Aug. 24, is the Treasury Department program under which the new designations were made. The administration says the program seeks to cut funding for the war, missile development, cyberattacks and the Islamic Revolutionary Guard Corps (IRGC), and to compel Tehran to negotiate an end to the conflict that began after a U.S.-Israeli strike on Iran roughly seven months ago.
The Treasury said a U.S. blockade of Iranian oil transiting the Strait of Hormuz has prompted Tehran to rely more on road and rail networks to move petroleum, fertilizer, chemicals and other goods. Thursday's sanctions are intended to disrupt those alternative logistics routes.
Companies Named
The new designations name two dominant auto manufacturers — Iran Khodro Company (IKCO) and SAIPA Iranian Automobile Manufacturing Company (SAIPA) — which the Treasury says together account for more than 90% of Iran's domestic car market. The department also listed rail operators, including the state-owned Islamic Republic of Iran Railway Company, Raja Passenger Trains Company and the private freight operator Sherkat-E Rah Ahan-E Khamle-O-Naghle (Railway Transportation Company).
“This action directly targets Iran’s enablers and lays the groundwork for the United States and our partners to drain the regime’s revenue once and for all,” Treasury Secretary Scott Bessent said in a statement.
The designations typically impose financial restrictions on listed entities and can deter international companies from doing business with them, increasing Tehran’s economic isolation if partners comply.
The Treasury Department said these steps are intended to reduce the flow of funds that could support Iran’s military and related programs. The administration framed the move as part of an effort to increase leverage over Tehran ahead of any potential negotiations.
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