The Treasury Department on Thursday sanctioned Iran Khodro and SAIPA, Iran's two largest automakers, along with the Islamic Republic of Iran Railway Company, the state-owned railroad that provides passenger and freight service. The two carmakers hold more than 90 percent of Iran's domestic auto market, according to Treasury.
Treasury's Office of Foreign Assets Control went further, issuing determinations that, the department said, authorize it to sanction any company or individual operating in Iran's automotive or rail sector. They rest on Executive Order 13902, a January 2020 order that named Iran's construction, mining, manufacturing and textiles sectors and let the Treasury secretary, in consultation with the secretary of state, add more. The financial sector was added that October.
"The Iranian regime's ability to fund its war machine and inflict terror on the world has been severely diminished thanks to Operation Economic Outcast," Treasury Secretary Scott Bessent said. The new action, he added, "directly targets Iran's enablers and lays the groundwork for the United States and our partners to drain the regime's revenue once and for all."
Treasury announced Operation Economic Outcast on Aug. 24 to cut off Tehran's funding for the war, missile construction, cyberattacks and the Islamic Revolutionary Guard Corps. Reuters reported that the campaign is meant to force Iran to negotiate an end to the war that began with a U.S.-Israeli strike on the country about seven months ago.
A U.S. blockade of Iranian oil passing through the Strait of Hormuz has forced Tehran to rely more on autos and rail to carry petroleum, fertilizer, chemicals and other goods, Reuters reported, and Treasury said Thursday's sanctions go after those alternatives. The department asserted that Iran's oil revenue is falling to zero as the blockade takes hold, leaving the government increasingly dependent on the auto and rail industries, which it called some of the regime's largest remaining sources of revenue and logistical capacity.
Treasury described the automotive industry as Iran's largest economic sector outside oil and gas, one that loses more than $1 billion a year yet remains part of the country's defense industrial base and a "lucrative cash cow" for the Revolutionary Guard. The department says Iran Khodro maintains close ties to the Guard and that the two companies together turn out nearly 1.5 million vehicles a year.
The list extends to Iran Khodro Diesel, which Treasury called the country's largest maker of buses, trucks and diesel engines, and to two SAIPA subsidiaries, Pars Khodro and Zamyad. Treasury designated Niroo Motor Shiraz, Iran's largest motorcycle manufacturer, and accused it of using prison labor and of supplying more than 6,000 motorcycles for plainclothes intelligence agents on patrol. Another Niroo Motor Group company, Niroo Motor Damavand, was added to the list.
Outside Iran, the department went after five companies it says kept the country's auto industry supplied with parts: PT Golden Motorcycle International in Indonesia, Integrated Auto Parts in the United Arab Emirates, Troy Trading in Turkey, and Hessenberg Co. and Tanex Global Trading in Hong Kong. According to the department, the Hong Kong firms supplied parts to Iran Khodro and SAIPA. The Turkish company shipped truck parts to Bahman Diesel, a unit of the already sanctioned Bahman Group, which Treasury says makes heavy trucks and other work vehicles for Iran's armed forces, including the Revolutionary Guard's drone and missile divisions.
Treasury said Iran has turned "in desperation" to its rail sector to keep the economy going under the blockade, including to transport oil. Besides the national railway, it sanctioned Raja Passenger Trains Company, which took over some of the state railway's passenger business, and the Railway Transportation Company, which the department called a key private freight company.
The designations reached heavy industry as well, including the Heavy Equipment Production Company, known as HEPCO, one of the Middle East's largest makers of mining and road construction machinery, and its subsidiary in Shanghai. Treasury said HEPCO's machines have been used by the Revolutionary Guard's Qods Force to build and improve military training sites and by the Guard to construct underground facilities. In the metals trade, the department sanctioned two companies in the United Arab Emirates and a German firm, Tech-Trade International Impex, which it said sold precursor materials to Mobarakeh Steel, the largest steel producer in the Middle East.
Among the individuals designated was Ramin Keshvardoust, a Hong Kong-based Iranian businessman whom Treasury accuses of using companies and bank accounts he controls to arrange shipments of Iranian steel and oil worth tens of millions of dollars. Since early 2025, the department said, operatives in Iran's shadow banking system have sent dozens of transactions worth tens of millions of euros and dollars to five of his Hong Kong shell companies. Those firms were sanctioned along with steel companies he runs in China and Iran and a shareholder in the Chinese firms.
Any property the newly designated companies and individuals hold in the United States or in the possession or control of U.S. persons is now blocked, as is any entity they own 50 percent or more. U.S. persons are generally barred from dealing in that property without OFAC authorization or an exemption, and Treasury warned that foreign financial institutions engaging in certain transactions with those designated could risk secondary sanctions.
As with earlier sanctions announcements, it was not immediately clear how much the new penalties would affect Iran, which has faced heavy sanctions for years, CNBC reported. The outlet noted that the campaign has drawn questions about whether Washington would extend its reach to China, Iran's top trading partner and oil buyer. Thursday's designations included HEPCO's Shanghai subsidiary and two China-based steel companies that Treasury says Keshvardoust operates.