US ‘D-Day’ Iran sanctions hit dozens of Chinese firms but spare major financial institutions

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 (Aug 24), the US Treasury Department unveiled a package targeting dozens of individuals and entities as part of what US 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 Teheran 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.

Firms in a tech-procurement network targeted

A key focus of the measures was a tech-procurement network centred on Hong Kong-based Sweet Ocean Industrial. The US 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, RPT Technology, Tiany Technology and MT Trading and Logistics HK.

SEE ALSO

US widens Iran sanctions but holds back toughest measures; Teheran vows to retaliate

Iran warns Gulf states against joining Trump’s economic war, or else

This time could be different for Russia sanctions

The US Treasury Department also said Hong Kong-based DEC Photonics repeatedly transferred funds to Shenzhen Sweet Ocean. The company advertises laser and optical products on its website. 

In addition, the US Treasury alleged that Hong Kong-based Feili, Minvur, Feisu and Guska each transferred tens of thousands of dollars to Sweet Ocean and its network to help Iranian end-users procure products. The US 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, Shenzhen Bositong Logistics and Bositong Supply Chain Shenzhen.

DEC Photonics, Tiany and Shenzhen Bositong Logistics, which provided contact information online, did not immediately respond to attempts to reach them for comment. BLOOMBERG