US hits Iran's largest petrochemical group with sanctions

Iran's petrochemical group PGPIC given sanctions over ties with the country's Revolutionary Guards

The US Treasury Department building in Washington, DC.  AFP 

The US has hit Iran's largest petrochemical group with economic sanctions due to its ties with the country's Revolutionary Guards (IRGC).

The sanctions were imposed on Iran’s largest and most profitable petrochemical holding group, Persian Gulf Petrochemical Industries Company (PGPIC) on Friday.

The US Treasury department said in a statement it was due to the firm providing financial support to Khatam al-Anbiya Construction Headquarters (Khatam al-Anbiya), the engineering conglomerate of the Islamic Revolutionary Guard Corps (IRGC).

The sanctions will also extend to its 39 international subsidiaries and sales agents.

"By targeting this network we intend to deny funding to key elements of Iran’s petrochemical sector that provide support to the IRGC," Treasury Secretary Steven Mnuchin said in the statement.

"This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC."

PGPIC and its group of subsidiary petrochemical companies hold 40 per cent of Iran’s total petrochemical production capacity and are responsible for 50 per cent of Iran’s total petrochemical exports.

Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker added: “The IRGC systemically infiltrates critical sectors of the Iranian economy to enrich their coffers, while engaging in a host of other malign activities."

In a statement the Treasury Department said any international companies that "continue to partner with PGPIC and its designated subsidiaries and sales agents will themselves be exposed to US sanctions".

It said: "The Treasury urges international companies to ensure they are conducting the necessary due diligence to avoid engaging in sanctionable activity with entities that support the Iranian regime’s malign activity.

"The IRGC and its major holdings, such as the Basij Cooperative Foundation and Khatam al-Anbiya, have a dominant presence in Iran’s commercial and financial sectors, controlling multi-billion dollar businesses and maintaining extensive economic interests in the defense, construction, aviation, oil, banking, metal, automobile and mining industries, controlling multi-billion dollar businesses.

"The profits from these activities support the IRGC’s full range of nefarious activities, including the proliferation of weapons of mass destruction (WMD) and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad."