WASHINGTON, D.C. — The U.S. Treasury's Office of Foreign Assets Control published a determination pursuant to Executive Order 13902 targeting the automotive and rail sectors of the Iranian economy on October 1, 2026. The action designated major manufacturers and railway operators for inclusion on the Specially Designated Nationals List subject to secondary sanctions.

Iran Khodro Company was added to the list alongside Saipa Iranian Automobile Manufacturing Company and the Islamic Republic of Iran Railway Company. Heavy Equipment Production Company (HEPCO) also received a designation subject to secondary sanctions as part of the broader sectoral targeting.

The Treasury identified several additional entities in its update to the Specially Designated Nationals List. HEPCO Shanghai Co. Ltd. Fidar Foolad Radman, Bonasol Group Co. Limited, Dominion Trading Group Limited, East Concord Development Limited, Hessenberg Co. Limited, and Integrated Auto Parts LLC were all added to the list. Two individuals, Mehnoosh Poursaraf Hamedani and Ramin Keshvardoust, were also designated subject to secondary sanctions.

In conjunction with the designations, the Office of Foreign Assets Control published an amended Iran-related Frequently Asked Question, FAQ 831. This administrative update accompanied the publication of the determination and the list changes.

What's New

The U.S. Treasury’s designation of HEPCO Shanghai Co. Ltd. is part of a broader pattern of targeting entities linked to Iran’s heavy equipment and manufacturing sectors, which have been used to support the Iranian regime’s military and industrial infrastructure. The U.S. Treasury’s designation of Integrated Auto Parts LLC in the UAE is consistent with prior actions targeting companies involved in the automotive supply chain for Iranian manufacturers, including those that facilitate the export of parts and components.

The Office of Foreign Assets Control (OFAC) has been responsible for implementing economic and trade sanctions based on U.S. foreign policy and national security goals since its establishment in 1953. Iran Khodro Company (IKCO) and SAIPA collectively produced approximately 1.5 million vehicles annually as of 2026, accounting for over 90% of Iran’s domestic auto market, according to the U.S. Treasury’s designation documents. The Office of Foreign Assets Control (OFAC) operates under the authority of the International Emergency Economic Powers Act (IEEPA), which grants the U.S. government the power to impose economic and trade sanctions against foreign entities deemed threats to national security. In 2018, OFAC designated Iran Khodro Company (IKCO), a major Iranian automaker, under Executive Order 13846 for its role in supporting the Iranian regime's military and destabilizing activities.

Why It Matters

The designation targets two automakers that collectively produced approximately 1.5 million vehicles annually as of 2026, accounting for over 90% of Iran’s domestic auto market. By placing these entities on the Specially Designated Nationals List, the U.S. government applies secondary sanctions that restrict their access to the U.S. financial system and prohibit U.S. persons from engaging in transactions with them.

The Office of Foreign Assets Control operates under the authority of the International Emergency Economic Powers Act, which grants the U.S. government the power to impose economic and trade sanctions against foreign entities deemed threats to national security. This action follows a 2018 designation of Iran Khodro Company under Executive Order 13846 for its role in supporting the Iranian regime's military and destabilizing activities, indicating a continued focus on the industrial base of the Iranian economy.