US hits Iran petrochemical group PGPIC with sanctions

The United States on Friday hit Iran's petrochemical group PGPIC with economic sanctions due to its ties with the country's Revolutionary Guards (IRGC), the Treasury Department announced.

The move aims to choke off financing to the country's largest and most profitable petrochemical group and extends to its 39 subsidiaries and "foreign-based sales agents," the Treasury Department said in a statement.

"This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC," Treasury Secretary Steven Mnuchin said in the statement.

Treasury warned that international companies continuing to partner with PGPIC or subsidiaries and sales agents "will themselves be exposed to US sanctions".

The US efforts over the past year to choke off Iran's economy, following President Donald Trump's decision to abandon the 2015 nuclear deal negotiated by his predecessor, has angered allies as foreign companies get caught up in the dispute.

Treasury said it is penalizing PGPIC due to its links to the economic arm of the IRGC, known as Khatam al-Anbiya.

The sanctions prohibit the firm and its subsidiaries from accessing the US market or financial system, including through other foreign companies, and blocks all funds or property that is in the United States or held by a US firm.

"By targeting this network we intend to deny funding to key elements of Iran's petrochemical sector that provide support to the IRGC," Mnuchin said.

The PGPIC group holds 40 per cent of Iran's total petrochemical production capacity and is responsible for 50 percent of the country's petrochemical exports, Treasury said.