January 4, 2006
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Treasury Employs Financial Sanctions Against WMD Proliferation Supporters in Iran

The U.S. Department of the Treasury today designated two Iranian entities, Novin Energy Company and Mesbah Energy Company, for their support of the proliferation of weapons of mass destruction (WMD). The designation and accompanying asset freeze is administered by the Treasury's Office of Foreign Assets Control.

"Identifying and designating supporters of WMD proliferation disrupts the networks that are vital to illicit weapons programs," said Stuart Levey, Treasury's Under Secretary for Terrorism and Financial Intelligence (TFI). "We will continue to expose and isolate the individuals and entities that facilitate these networks."

Today's action was taken pursuant to Executive Order 13382, an authority aimed at freezing the assets of proliferators of weapons of mass destruction (WMD) and their supporters and prohibiting transactions and trade with those designated entities.  Designation under this Order prohibits all transactions between the designated entities and any U.S. person and freezes any assets the entities may have located under U.S. jurisdiction.

Novin Energy Company and Mesbah Energy Company met the criteria for designation because they are owned or controlled by, or act or purport to act for or on behalf of the Atomic Energy Organization of Iran (AEOI), which was designated in the Annex of E.O. 13382 on June 29, 2005.

Novin has transferred millions of dollars on behalf the AEOI to entities associated with Iran's nuclear program. Novin operates within the AEOI, and shares the same address as the AEOI.

Mesbah is a state-owned company subordinate to the AEOI. Through its role as a front for the AEOI, Mesbah has been used to procure products for Iran's heavy water project. Heavy water is essential for Iran's heavy-water-moderated reactor project, which will provide Iran a potential source of plutonium well-suited for nuclear weapons. Heavy water is believed to have no credible use in Iran's civilian nuclear power program, which is based on light-water reactor technology.

The designations announced today are part of the ongoing interagency effort by the United States Government to combat WMD trafficking by blocking the property of entities and individuals that engage in proliferation activities and their support networks.

Today's action builds on President Bush's issuance of E.O. 13382 on June 29, 2005. Recognizing the need for additional tools to combat the proliferation of WMD, the President signed the E.O. authorizing the imposition of strong financial sanctions against not only WMD proliferators, but also entities and individuals providing support or services to them. The E.O. carried with it an annex that designated eight entities operating in North Korea, Iran, and Syria for their support of WMD proliferation. 

The Treasury designated eight additional North Korean entities on October 21, 2005, pursuant to E.O. 13382. These entities were owned or controlled by, or act or purport to act for or on behalf of KOMID and Korea Ryonbong General Corporation, which were also included in the June 2005 Annex.

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