(Aug 25): The Trump administration’s latest sanctions salvo against Iran has swept up businesses in China and Hong Kong, but avoided the far more consequential step of targeting major Chinese financial institutions.
On Monday, the US Treasury Department unveiled a package targeting dozens of individuals and entities as part of what Treasury Secretary Scott Bessent described as Operation Economic Outcast, a broader campaign aimed at severing Iran’s remaining financial lifelines.
The inclusion of Hong Kong-based entities follows a pattern seen in US enforcement of sanctions imposed over Russia’s war in Ukraine. In that campaign, Washington has targeted trading intermediaries and shipping companies in the city accused of helping to move goods, including sensitive technology.
The latest Iran measures suggest Washington is seeking to raise the costs of doing business with Tehran without yet confronting the broader economic and diplomatic fallout that could come from sanctioning large Chinese banks. Still, it is unclear how effective the measures on the firms will be given they are private with little known exposure to the US.
“Sanctions against specific entities are meaningless as entity-specific sanctions can’t be applied quickly enough to match the speed at which substitute entities can be created,” said Derek Scissors, a senior fellow at the American Enterprise Institute who tracks Chinese overseas investment.
Some firms could start out as shell companies and then handle more activity if they survive, Scissors said, adding that the dozens of entities the US named “exist in a universe of tens of thousands.”
China’s Foreign Ministry and the Hong Kong government did not immediately respond to a request for comment on the new sanctions.
A key focus of the measures was a tech-procurement network centered on Hong Kong-based Sweet Ocean Industrial Ltd. Treasury alleged the company acted as an intermediary in acquiring laser-optics equipment destined for Iran’s Malek Ashtar University of Technology, a defence-linked research institution. The individuals Li Na, Tian Jianbai and Zhang Limei — all based in China — were also designated for allegedly helping coordinate procurement activities through the network.
The sanctions also reached several firms linked to the same supply chain, including Shenzhen Sweet Ocean Technology Ltd, RPT Technology Ltd, Tiany Technology Ltd and MT Trading and Logistics HK Ltd.
The Treasury Department also said Hong Kong-based DEC Photonics Ltd repeatedly transferred funds to Shenzhen Sweet Ocean. The company advertises laser and optical products on its website.
Treasury also alleged that Hong Kong-based Feili Co, Minvur Ltd, Feisu Ltd and Guska Co each transferred tens of thousands of dollars to Sweet Ocean and its network to help Iranian end-users procure products. Treasury alleged that several of these entities served as front companies that facilitated payments for Iranian financial networks.
Washington separately targeted a number of logistics operators that it said had links to Iran. Among them were Shenzhen Huamei Lianyun International Logistics Co, Shenzhen Bositong Logistics Co and Bositong Supply Chain Shenzhen Co.
DEC Photonics, Tiany and Shenzhen Bositong Logistics, which provided contact information online, didn’t immediately respond to attempts to reach them for comment.
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