Washington Must Focus on Asia When Targeting Tehran’s Drone Technology Procurement

Behnam Ben Taleblu

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The U.S. Treasury Department recently sanctioned a multi-jurisdiction procurement ring supporting the Islamic Republic of Iran’s drone and military programs. Concurrent with Iran’s continued proliferation of drones to Russia for use in Ukraine, both the Biden administration and Congress have sought to stem the flow of American components found in downed Iranian unmanned aerial systems.

Yet while preventing transfers of such Western equipment to Iran is both necessary and understandable, Asia has long served as a critical hub for military and missile technology to the Islamic Republic. An increase in the pace and scope of penalties targeting Tehran’s networks and fronts in Asia will be essential to disrupting Iran’s drone program.

The latest U.S. penalties center around an Iranian electronics firm known by an English transliteration of its acronym, PASNA. First sanctioned in 2018 for seeking technology with military applications from China and for reportedly providing material support to the sanctioned Iran’s Electronics Components Industries—a subsidiary of the sanctioned Iran Electronics Industries, which is, in turn, a subsidiary of Iran’s sanctioned Ministry of Defense and Armed Forces Logistics (MODAFL)—PASNA continued its activities after exposure in 2018 through fronts, aliases, and affiliates, both in Iran and Malaysia.

Beyond exposing these fronts, the Treasury Department also sanctioned the managing director of PASNA, Mehdi Khoshghadam, as well as four suppliers of electronic goods and microelectromechanical systems to PASNA operating in both Hong Kong and the People’s Republic of China. These penalties build on recent efforts by the Treasury Department to disrupt other Iranian drone technology procurement rings in Asia. Last month, the department targeted five firms operating in China and Hong Kong that sold aerospace components and light-aircraft engines to Iran Aircraft Manufacturing Industries, which is a subsidiary of the Iran Aviation Industries Organization, itself another MODAFL subsidiary.

Iran’s ability to erect, sustain, and even recreate front companies across jurisdictions despite Washington’s increased willingness to crack down on drone procurement, production, and proliferation networks should come as a surprise to no one. Oil shippers and shadowy fronts across Asia have long helped the Islamic Republic generate illicit revenues through the sale or storage of crude oil and petrochemicals, including at the height of U.S. sanctions.

For Tehran, which has a robust domestic defense industrial base, continued illicit procurement of drone components is a sign of the growing importance these low-flying unmanned aerial systems play in bolstering the revolutionary regime’s status and security.

Iran’s transfer of drones to Russia marked a historic first in Tehran’s relationship with Moscow, and one that the Islamic Republic is reportedly already cashing in on. Over the past three decades, it was Iran who served as a junior partner to Russia, purchasing Russian weapons like surface-to-air missile systems, fighter jets, and even diesel-electric submarines. Now it is Iranian weapons that are helping preserve Russian long-range strike platforms like cruise and ballistic missiles and helping sustain Russia in its war against Ukraine.

Regionally, variants of Iranian drones have become a regular feature of low-intensity conflict in Syria, Iraq, and Yemen where they bolster the capabilities of Iran’s “Axis of Resistance” and strike U.S. persons, interests, and partners. On the home front, while drones were once seen as the purview of the elite Islamic Revolutionary Guard Corps, these weapons are being increasingly diffused through Iran’s Armed Forces and branches of Iran’s Artesh, or national military.

Additionally, over the past few years, Iran has taken to directly launching drones from its own territory, striking at adversaries while operating beneath their threshold for the overt use of force. Of particular importance here have been loitering munitions or suicide drones. Such weapons have been launched by Iran in a combined arms operation with land-attack cruise missiles against Saudi Arabian oil facilities in 2019, as well as against moving targets like an Israeli-owned oil tanker in 2021.

All of this is to suggest that sporadic or graduated sanctions against Iranian procurement or proliferation networks will not handicap Iran’s drone program overnight nor will it deter future drone use by Iran. For example, there is no reason why Washington waited half a decade to sanction the head of an entity that was already subject to sanctions and still engaging in sanctionable activity, as was the case with PASNA and its managing director.

Conversely, sustained pressure against managers, boards, companies, and networks alike—especially when levied in large tranches rather than meted out over time—does stand a chance at both exposing and impeding the supply chains that feed Iran’s drone program. This is especially the case when focused on jurisdictions across Asia where illicit Iranian activity continues. Washington must therefore allocate more time, resources, and political capital to keep pace with this threat.

Behnam Ben Taleblu is a senior fellow focusing on Iranian political and security issues at the Foundation for Defense of Democracies (FDD), where he contributes to its Iran Program, Center on Military and Political Power (CMPP), and Center on Economic and Financial Power (CEFP).