Risky Business: Neogen Disclosure Of Potential Iran Sanctions Violations Underscores Threat Of Dual-Use Technologies

(New York, N.Y.) — Last week, Michigan-based food and animal safety company Neogen Corp. disclosed in a public filing that it has been under investigation for potential violations of U.S. sanctions against the Islamic Republic of Iran since March 2020. Neogen said that once notified, it “disclosed information concerning certain genomic testing services provided to an unrelated U.S.-based party engaged in veterinary activities involving an Iranian party.”

Failure to maintain compliance with U.S. sanctions restricting exports of U.S. goods, technology or services to Iran can be costly. Neogen has set aside $600,000 for potential fines and is “implementing additional compliance measures to prevent inadvertent dealings with restricted countries or parties.” Businesses with an economic interest in the U.S. market should regularly review their Due Diligence (DD) and Know-Your-Customer (KYC) protocols to ensure compliance with U.S. sanctions and regulations, and consider adopting more stringent standards.

More acutely, however, the Neogen investigation raises serious concerns about the proliferation of potential dual-use technologies, defined as a commodity, software, or technology that has both commercial and military or proliferation applications. Neogen has not been accused of violating Commerce Department regulations, but according to the USAF Counterproliferation Center, advances in genomics can be used to create bioweapons. The U.S. has long assessed that Iran enjoys bioweapons-producing capabilities at minimum, and may be operating a bioweapons program itself.

“The Iranian regime works to procure dual-use technologies to repress Iranians, strengthen its nuclear program, support military research and development, and bolster its terrorist proxies. The potential for otherwise innocuous products and services to be used by Iran’s military or terrorist proxies is only limited by their imaginations,” said United Against Nuclear Iran (UANI) Research Director Daniel Roth. “The U.S. does well in ensuring strict controls of dual-use technologies being exported, but other countries and grant-making organizations at the United Nations are less stringent. This porousness contributes to the strength of the Iranian regime.” 

Notably, the United Nations Industrial Development Organization (UNIDO), helmed for the past eight years by Chinese diplomat LI Yong, is presently funding a project instigated by Iran’s sanctioned ICT Minister Azari Jahromi, to improve the “competitiveness of [Information and Communication Technology] ICT start-ups” in Iran. China and Iran enjoy close trade and military relationships with each other. ICT has growing potential for military applications and is normally subject to myriad export controls from the U.S. ICT also falls under the regulations of four Multilateral Export Control Regimes (MECR) – the Wassenaar Arrangement, the Australia Group, the Nuclear Suppliers Group, and the Missile Technology – none of which have been adopted by Iran. Moreover, given the dominance over Iran’s economy by the terrorist Islamic Revolutionary Guard Corps, it is impossible to discount the inevitability that the IRGC will acquire potentially dangerous dual-use technologies including ICT under the guise of civilian use.