US sanctions China, Hong Kong firms over Iran drone and missile supplies

The US Treasury on Friday imposed sanctions on 10 individuals and companies, including entities based in China and Hong Kong, accusing them of helping Iran procure weapons components and raw materials used in Shahed drones and ballistic missiles.

The move comes as efforts to end the war with Iran remain stalled and days before US President Donald Trump is scheduled to travel to China for talks with President Xi Jinping.

In a statement, the Treasury Department said it remained prepared to take further economic action against Iran’s military-industrial base to prevent Tehran from rebuilding its production capabilities.

The department also warned that it could target foreign companies and financial institutions supporting illicit Iranian commerce, including those linked to China’s independent “teapot” oil refineries and airlines aiding Iran’s activities.

Among the entities sanctioned were China-based Yushita Shanghai International Trade Co Ltd, accused of facilitating Iran’s attempts to acquire weapons from China, and Dubai-based Elite Energy FZCO, which allegedly transferred millions of dollars to a Hong Kong company involved in procurement operations.

Hong Kong-based HK Hesin Industry Co Ltd and Belarus-based Armory Alliance LLC were accused of acting as intermediaries in the procurement network, while Hong Kong-based Mustad Ltd allegedly facilitated weapons procurement for Iran’s Islamic Revolutionary Guard Corps.

Iran-based Pishgam Electronic Safeh Co was sanctioned for procuring motors used in drones, while China-based Hitex Insulation Ningbo Co Ltd was accused of supplying materials used in ballistic missile production.

Brett Erickson, managing principal at Obsidian Risk Advisors, said the sanctions were aimed at limiting Iran’s ability to threaten shipping in the Strait of Hormuz and regional allies.

Iran shut the Strait of Hormuz following US and Israeli strikes on Iranian targets on February 28. The closure has severely disrupted shipping through the strategic waterway, through which roughly one-fifth of global crude oil and liquefied natural gas supplies pass, pushing energy prices sharply higher.

According to the British government-funded Centre for Information Resilience, Iran has the industrial capacity to manufacture around 10,000 drones per month.

Erickson said the latest sanctions remained narrowly targeted, giving Iran time to adapt its procurement routes, and noted that Washington had not yet targeted Chinese banks that continue to support Iran’s economy.

– Ends