The U.S. Department of the Treasury announced new sanctions on October 1, 2026, targeting Iran's automotive, rail, manufacturing and steel sectors as part of Operation Economic Outcast, striking at what it called some of the last significant elements of Iran's failing industrial infrastructure.
"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," said Secretary of the Treasury Scott Bessent. "Today's action 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 said Iran's automotive and rail industries have been coopted by the regime and the Islamic Revolutionary Guard Corps (IRGC), and that with the U.S. military's maritime blockade taking hold and oil revenues falling to zero, the regime has grown increasingly dependent on these industries to maintain a veneer of economic solvency.
As part of the action, the Office of Foreign Assets Control (OFAC) is issuing two additional sectoral sanctions determinations under Executive Order (E.O.) 13902 targeting Iran's automotive and rail sectors, authorizing sanctions on any entity or individual operating in them. The designations were taken under E.O. 13902 and E.O. 13871, which targets Iran's iron, steel, aluminum or copper sector.
Iran's automotive sector, its largest economic sector outside oil and gas, loses over $1 billion annually, Treasury said. Two companies represent over 90 percent of Iran's domestic auto market: Iran Khodro Company (IKCO), which maintains close ties to the IRGC, and SAIPA Iranian Automobile Manufacturing Company. Together they produce nearly 1,500,000 vehicles annually. Both were designated, along with Iran Khodro Diesel Company, Pars Khodro Company, Zamyad Company, Niroo Motor Shiraz Industrial and Manufacturing Company and Niroo Motor Damavand Company.
Foreign suppliers were also designated, including Indonesia-based PT Golden Motorcycle International, UAE-based Integrated Auto Parts LLC, Turkiye-based Troy Trading Arac Parcalari Sanayi Ve Ticaret Limited Sirketi, and Hong Kong-based Hessenberg Co., Limited and Tanex Global Trading Hong Kong Limited.
In the rail sector, Treasury designated the Islamic Republic of Iran Railway Company (RAI), Raja Passenger Trains Company and Sherkat-E Rah Ahan-E Khamle-O-Naghle, also known as the Railway Transportation Company.
Manufacturing and metals designations included Iran-based Heavy Equipment Production Company (HEPCO), whose products have been used by the IRGC-Qods Force to build military training sites, and its China-based subsidiary HEPCO Shanghai Co., Ltd. UAE-based Silver Line Metal Trading LLC and Germany-based Tech-Trade International Impex GmbH were designated under E.O. 13871, along with UAE-based Traco International FZE.
Treasury also designated businessman Ramin Keshvardoust, businesswoman Mehnoosh Poursaraf Hamedani and several Hong Kong-based companies, saying Keshvardoust's shell companies facilitated Iranian steel and oil shipments worth tens of millions of dollars and were used in Iran's shadow banking system.
All property and interests in property of the designated persons in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Treasury warned that any entity facilitating money laundering or sanctions evasion on behalf of Iran risks being cut off from the U.S. financial system, and that secondary sanctions exposure has been expanded for those continuing to do business with the Iranian regime.