On January 6, the Treasury Department imposed sanctions on the executive board members of the Qods Aviation and Aerospace Industries Organization (IAIO), an Iranian defense company founded by the Islamic Revolutionary Guard Corps (IRGC) in 1985. IAIO designs and manufactures Mohajer-6 mid-range reconnaissance and combat drones, which were supposedly transferred to Russia in the summer. In September, Russia reportedly used the Mohajer-6 to coordinate an attack on the Ukrainian port of Odessa, contradicting Tehran’s denials of supplying drones to Moscow after the invasion of Ukraine. IAIO has been sanctioned by the Treasury Department’s Office of Foreign Assets Control (OFAC) since December 2013.
    The U.S. government may also increase sanctions against officials of the Iran Aircraft Manufacturing Industries Corporation (HESA), which produces the Shahed-136 suicide drone that Russia has renamed the Geran-2 and that has featured prominently in the war in Ukraine. Since September, Russia has deployed the Shahed-136/Geran-2 in waves of drone and missile strikes, crippling Ukraine’s critical infrastructure and terrorizing its civilian population. Like IAIO, HESA has been sanctioned by the United States, the European Union, and the United Kingdom for over a decade.  
    For years, the United States has imposed sanctions against Iran’s military-industrial complex and manufacturing base, including entities like IAIO, HESA, Fajr Aviation Composite Industries (FACI), Iran Helicopter Support and Renewal Industries (PAHNA), and Iran Aircraft Industries (IACI), to name a few. Nevertheless, Iran’s aerospace sector and drone industry have continued to expand and thrive. Western sanctions have been unable to prevent Iran from becoming a prominent player in the military drone market and sharing drone technology with partners and proxies inside and outside of the Middle East. 
    Iran has manufactured and operated military drones since the Iran-Iraq War in the mid-1980s. With over thirty-three models, Iran’s highly developed, sophisticated military drone complex comprises one of the four pillars of its security strategy and force structure, complementing its missile technology, proxy forces, and cyberwarfare. Drones have increasingly offered an asymmetric advantage to Iran, with the understanding that it cannot compete with more modern air forces in the region—even as it attempts to acquire Su-35 fighter jets from Russia in exchange for drones, missiles, and other military assistance. Iranian drones are cheaper than their Western counterparts and have proven to be effective on the battlefield, whether against domestic and regional insurgents or American and allied assets in and around the Persian Gulf.
    Drones have also enabled Iran to project power and earn profits, showcase technology and enhance prestige, strengthen alliances, and influence conflicts in the Middle East and beyond. To this end, Iran has delivered drones and their designs, components, and training to its partners and proxies in Iraq, Lebanon, and Yemen, as well as to foreign governments such as Ethiopia, Russia, Sudan, Syria, and Venezuela—transactions facilitated by the expiration of the UN arms embargo against Iran in October 2020. In May 2022, Iranian Maj. Gen. Mohammad Bagheri held a ribbon-cutting ceremony for a new Iranian drone factory in Tajikistan, its first offshore drone production facility. On October 18, as Russia continued deploying the Shahed-136/Geran-2 against Ukrainian infrastructure and civilians, Maj. Gen. Yahya Safava, a top military aide to Iranian supreme leader Ali Khamenei, claimed that twenty-two countries wanted to purchase Iranian drones.
    So far, Iran has refrained from delivering to Russia longer-range and more lethal drones and missiles, like the Arash-2 suicide drone and the Fateh-110 and Zolfaghar short-range ballistic missile (SRBM). In doing so, Tehran seeks to avoid being subjected to snapback sanctions under UN Security Council (UNSC) resolution 2231 until a key provision expires in October 2023. Meanwhile, in the port city of Bandar Abbas, the IRGC Navy has contracted the Iran Shipbuilding and Offshore Industries Complex to convert the Shahid Mahdavi container ship into a drone aircraft carrier.
    In addition to increasing sanctions against Iran, Washington intends to enforce export controls and pressure private companies to disrupt the technological supply chain connected to Tehran’s drone industry. These plans were made public after reports surfaced that the Shahed-136 is manufactured with American and British components. These components not only complicate Iran’s revolutionary narrative of independence and self-sufficiency but also demonstrate its uncanny ability to bypass sanctions.
    As with Western sanctions, it is unlikely that more export controls and corporate pressure will significantly reduce Iran’s access to these components. First, as indicated above, foreign components have already been integrated into a robust drone program with an established supply chain. Second, while the United States could perhaps punish companies that sell dual- or multi-use technology to Iran and other so-called rogue states, it cannot fully stop resellers of such technology, like eBay or Alibaba, from doing so.
    The Iranian leadership embraces a whole-of-government approach and uses all available tools, from regime elites attending universities abroad to cyber espionage, to access the latest technologies. Iran may have difficulty accessing or creating complex communication technology. Yet it could still easily purchase a Texas Instruments electronic signal receiver chip of the type that Ukrainian forces discovered inside a downed Shahed-136, particularly from China’s large and unregulated technology market.
    Turkey, for example, successfully circumvented a U.S. export ban on drone components—engines, optoelectronics, and bomb racks—by importing them from the British subsidiary of an American company. A similar ban by the Canadian government incentivized Turkey to manufacture more components locally in the long term. Access to hardware and components aside, Iran’s high human capital could allow it to accelerate localized production of drone components. Such an outcome could be made possible by the first-rate scientists, technicians, engineers, and mathematicians produced by the Sharif University of Technology and other top-notch Iranian educational institutions, even as they have become epicenters of heightened unrest and repression during Iran’s latest protests.
    Considering the difficulty, if not impossibility, of disrupting Iran’s drone program through economic sanctions and export controls, the United States would do well to adopt a new strategy. Such a strategy would endeavor to use an innovative, holistic approach to break the endless cycle of American sanctions imposition and Iranian sanctions avoidance. Under this strategy, punitive economic and financial measures would be part of a broader policy toolkit to achieve a whole-of-government support effect.
    As a counterfactual, one cannot help but wonder whether Iranian-Russian military cooperation would be as strong had Washington remained in the Joint Comprehensive Plan of Action or rejoined it and rejected the route of maximum pressure. Somewhere between extreme coercion (military action and economic sanctions) and cooperation (diplomatic engagement and sanctions relief) may exist the right combination of sticks and carrots to change Iran’s behavior. Doing so could possibly prevent Washington, Tehran, and their respective allies from continuing down the destructive, irreversible path of intensified conflict and instability.