EU Would Aid Tehran’s Repression by Lifting Sanctions on Iranian Tech Firm

The European Union (EU) is reportedly contemplating the removal of sanctions on ArvanCloud, an Iranian internet technology company accused of facilitating regime censorship. This would enable ArvanCloud to not only conduct licit transactions across the EU but also to ramp up its partnership with Iran’s Ministry of Communications and Information Technology (ICT), thereby strengthening the Islamic Republic’s repressive apparatus.

ArvanCloud or Abr Arvan, formally known as Navyan Abr Arvan Private Limited Company, describes itself as “one of the fastest-growing cloud solutions providers in the market” equipped with a globally distributed network across the Middle East, South America, and Australia and with clients in 38 countries. Reportedly, ArvanCloud controls just under half of the cloud space market in Iran.

The EU imposed human rights sanctions on ArvanCloud in November 2022 in the wake of nationwide uprisings to protest Iranian security forces’ killing of 22-year-old Mahsa Amini. The EU designation cited the company’s role in supporting Tehran’s internet censorship.

The U.S. Department of the Treasury followed suit in June 2023 when it sanctioned ArvanCloud, its co-founders, and a parent company, citing their close ties to Iran’s ICT and Ministry of Intelligence and Security (MOIS). Like the EU, the Treasury pointed to ArvanCloud’s role “in the development of the National Information Network (NIN), a countrywide intranet that is being used to disconnect the Iranian people from the global Internet.” In September, the United Kingdom also designated ArvanCloud for human rights violations.

The Islamic Republic exploits its control of the internet to conceal popular discontent, surveil dissidents, bring charges against activists, push Iranians towards the NIN or “halal internet,” and impede coordination during periods of civil unrest.

Although the regime bans Twitter, Instagram, and other popular social media platforms, tens of millions of Iranians continue to use them, often via virtual private networks (VPNs), which the regime has also technically outlawed. In addition to suppressing dissent, restricting internet access on a national scale aids the regime’s ambition to gain visibility over the entirety of Iran’s internet traffic.

The EU’s re-evaluation of sanctions against ArvanCloud is allegedly in response to ArvanCloud’s formal complaint at the European Court of Justice challenging its designation. ArvanCloud has also reportedly appealed the EU designation by political pressure against European governments.

Delisting entities like ArvanCloud could encourage other entities in the Iranian cyber domain to use lawfare to claw back economic clout and rid themselves of the stigma of sanctions without having to make commensurate changes in leadership or behavior. Worse, it would render bare the lack of a strategy in the West to deal with the regime’s penetration or co-opting of Iran’s technology and private sectors.

The EU ought to maintain the designation of ArvanCloud as a sanctioned entity due to what the Treasury described as its significant role in Iranian internet censorship and its close ties to MOIS and ICT. Additionally, jurisdictions such as the United States and the United Kingdom that have blacklisted ArvanCloud should prioritize sharing relevant data and targeting information with the EU to both aid in the retention of the designation and coordinate efforts to expose and counter those engaged in digital repression in Iran.

Janatan Sayeh is a research analyst at FDD where Behnam Ben Taleblu is a senior fellow and Saeed Ghasseminejad is a senior advisor. They all contribute to FDD’s Iran Program and Center on Economic and Financial Power (CEFP). FDD is a Washington, DC-based, non-partisan research institute focusing on national security and foreign policy.