U.S. sanctions against companies involved in supplying Iran with drone components continues to seriously implicate businesses in China, Turkey, and the United Arab Emirates.
These measures are aimed at disrupting supply chains for the Iranian drone program, which Washington links to arms sales to Russia via Iran. Yet these sanctions create risks for international companies, affecting trade, investment, and reputation.
China: Export Controls and Disrupted Supply Chains
In October 2025, the U.S. Department of Commerce added 26 Chinese companies (including several from Hong Kong) to the Entity List, accusing them of supplying American components used in Iranian drones.
For these companies, this effectively means a ban on obtaining American technology without licenses, which are almost always denied.
Manufacturers of electronics, sensors, microchips, and navigation equipment are targeted. Loss of access to these goods leads to delays, increased costs, and the need to seek alternative (often lower-quality) components.
Inclusion on the sanctions list also damages the companies’ reputation abroad and may lead to the termination of cooperation by partners fearing secondary sanctions. Access to international financing is also limited, as Western banks are reluctant to work with companies linked to Iran’s military programs.
Turkey: Transit Risk and Banking Vulnerability
Turkish companies have been implicated in a scheme to re-export American-made parts to Iran. U.S. sanctions lists include TGB Aviation and Sisdoz Aritma Ve Pompa Teknolojileri, accused of evading export controls.
The sanctions are damaging trade and the financial system: banks associated with such companies may lose access to dollar transactions and international correspondent accounts. Even companies not directly included on the lists are facing reputational risks, as international partners are increasingly avoiding deals with Turkish suppliers in sensitive sectors.
The case of Turkey’s Halkbank, accused of facilitating the evasion of Iranian sanctions, remains a precedent. Although not directly related to drones, it demonstrates how seriously the U.S. takes export violations.
UAE: Trade Hubs Under Pressure
The UAE, particularly Dubai, has traditionally served as an important hub for the re-export of electronics and technical goods to the Middle East.
However, the U.S. is increasingly accusing local companies of assisting Iranian military structures. Several Emirati companies have been sanctioned for their involvement in Iran’s drone network.
Sanctions entail asset freezes in the U.S., a ban on doing business with American persons, and restricted access to the global financial system. Companies are forced to strengthen internal controls and customer and supplier due diligence to avoid further risks. Some may close their export divisions or change their business direction.
General Consequences and Adaptation Strategies
These sanctions are part of a broader U.S. strategy to limit Iran’s military potential, primarily in the areas of unmanned aerial systems and missile technology.
Companies from China, Turkey, and the UAE are adapting in different ways:
- Seek alternative suppliers outside the U.S.;
- Tighten compliance and documentation procedures;
- Diversify their businesses in favor of civilian technologies.
Nevertheless, room for maneuver is shrinking. U.S. sanctions mechanisms are becoming increasingly detailed, and the risks are becoming systemic.
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