From Republic, July 28, 2026. Complete text:

Editors’ Note. – The memorandum of understanding signed between the US and Iran (and already forgotten by everyone) was supposed to stop the war, but it did not. Nor did it stop the rearmament of the Islamic Republic: The missile program and support for proxy forces were not included in the agreement, and Tehran continued to build up its military capability, using billions [of dollars] received from oil sales. Neighboring countries are helping [Iran]: Some are providing missile defense systems and intelligence data, and others are supplying engines, microchips and raw materials for missile fuel. This weapons network includes Russia, China, Turkey, Belarus and even the United Arab Emirates. Ivan Lutiyev looks at how this system is organized.

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June 2026. [US President] Donald Trump and [Iranian President] Masoud Pezeshkian signed a memorandum of understanding. The US-Israeli war against Iran, which had lasted four months, officially ended. The document promised Tehran the lifting of the sea blockade, the suspension of oil sanctions, the unfreezing of $24 billion worth of frozen assets, and $300 billion in reconstruction plans. In exchange, Iran committed never to develop nuclear weapons.

It would seem that this was the time for deescalation, but a month later, in July, Trump said: “The ceasefire is over!” The US launched new strikes. Iran warned that it would not honor the memorandum anymore, and the Iranian military kept saying in unison that missile and drone manufacturing had not stopped for a single day.

Paradoxically, the ceasefire did not impede the rearmament of the Iranian Armed Forces, but even facilitated it in some way. Iran’s nuclear program and support for proxy forces were excluded from the negotiating agenda. This was the loophole that enabled Tehran to build up its military capability without technically breaking its obligations. The real question is: How is Iran doing this today – and with whose assistance and what resources?

The answer is threefold. Russia is providing major systems and intelligence. China is supplying critical components and knowhow. The Iranian “defense sector” has indigenous technology, which, however, is unviable without supplies from the outside. And all this is entangled in a web of sanctions loopholes via Hong Kong, the UAE, Turkey and Belarus.

Russia: ‘We did not supply,’ but –

On June 5, 2026, 10 days before the memorandum was signed, [Russian President] Vladimir Putin spoke at the St. Petersburg International Economic Forum [see Vol. 78, No. 23, pp. 3-8]. His statement was categorical: “Russia has not supplied any weapons to Iran. Tehran never asked us.”

This stands in stark contrast to data from the Stockholm International Peace Research Institute (SIPRI). According to SIPRI reports, Russia accounted for almost all (about 100%) of Iran’s major arms imports in the 2020-2024 period. At the same time, Russia absorbed roughly 80% of Iran’s total arms exports during the same period – primarily Shahed combat drones. These are not one-sided supplies, but a reciprocal exchange that showed through following the Russian invasion of Ukraine and consolidated as a result of the US attack on Iran.

What exactly is or was Iran receiving from Russia? According to open sources and think tanks, S-400 Triumf [Triumph] surface-to-air missile systems, 36 Su-30SM fighter jets, Tor-M2 and Pantsir missile defense systems, T-90M tanks, Mi-28 helicopters, corvettes and submarines. In January 2026, Iran received up to six Mi-28 combat helicopters. A secret 500-million-euro (about $589 million) agreement provided for the delivery of modern missile systems. Another 500 million euros for Verba man-portable antiaircraft missile systems.

But it is not even the systems as such that are really important. According to Gen. Dan Caine, chairman of the US Joint Chiefs of Staff, Russia provided intelligence and satellite imagery to assist Iran in targeting US military sites during the 2026 war. Tehran also received from Moscow advanced fiber optic drone technology – i.e., simple weapon systems capable of inflicting serious damage, which have already been transferred to Iranian proxies in the Middle East.

Officially, the Kremlin denies the shipments, but in reality it remains Iran’s main supplier of major weapons and its key military-technical partner.

China: a components factory.

China also officially denies [sending] military supplies to Iran. The Chinese Defense Ministry says that it controls military exports and plays a constructive role in global trade. US experts have a different opinion: China “largely avoids” direct official weapons sales [to Iran], opting instead to provide “a crucial economic and technological lifeline.”

In practice, this means that [Chinese companies] are shipping hundreds of containers packed with microchips, engines, and drone components to Iran. An investigation by The Wall Street Journal has shown that Chinese companies are knowingly ignoring US sanctions by supplying Shahed components to Iran and Russia.

One showcase example is Xiamen Victory Technology, which in May 2026 offered Iranian clients [German-designed] Limbach L550 engines – which are used in Shahed-136 drones. An investigation by Iran Watch highlighted a network of companies spanning China and Germany that has been implicated in supplying these engines first to the Russian Army and then to Iran.

However, engines are only the tip of the iceberg. Chinese customs data show that thousands of dual-use products were supplied, including potassium perchlorate (a raw material for solid missile propellants), enough for 260 Kheibar Shekan or 200 Haj Qasem [medium-range ballistic] missiles, as well as planetary mixers used to blend solid-fuel components in missile manufacturing, chips, optical fiber [and] batteries.

Iran is also buying ready-to-use technology from China. In late 2025, the IRGC received 1.8 [metric] tons of Chinese-made satellite equipment, including a 4.5-meter StarWin [motorized] antenna, from Shanghai via a UAE-based front company. The shipment was described as “antennas and accessories” addressed to the end user Ertebatat Faragostar Kish (EFK), which worked on a project for an entity that was added to the US sanctions list back in 2023.

It was a classic shipment scheme. The equipment was [initially] transported aboard the Chinese container ship Zhong Gu Yin Chuan to Dubai’s Jebel Ali, where it unloaded a container later collected by an Iranian vessel named Rama III, which transported it to [Iran’s] Bandar Abbas. Rama III deliberately transmitted false GPS navigation signals to disguise its true route.

The US Treasury Department regularly imposes sanctions against such networks. In May 2026, 10 individuals and companies in China, Hong Kong, the UAE, Belarus and Iran were sanctioned, including Hitex Insulation (Ningbo) Co., Ltd. (a [Chinese manufacturer and] supplier of carbon fiber and honeycomb fabrics for the aerospace industry), Yushita Shanghai International Trade Co Limited (a facilitator for Iran’s Center for Progress and Development), and Dubai-based Elite Energy FZCO, which transferred millions of dollars to Hong Kong-based companies to aid military procurements [for Iran].

Indeed, China is apparently not a supplier of ready-to-use weapons, but it is a very important source of components without which Iranian manufacturers would not have been able to deliver so many missiles and drones to the defense sector.

Sanctions schemes: How US restrictions are being bypassed.

Networks supplying Iran [with weapons] are becoming increasingly sophisticated. Here is what a typical scheme looks like.

Hong Kong [-registered] “post boxes” remain the main loophole. Iran continues to get huge amounts of electronic components for military applications via Hong Kong [-based] shell companies, despite the US’s years-long efforts to shut down this channel. The US Department of Commerce has even introduced a policy of high-risk addresses: If a business ships items controlled by US export rules to a listed address, it needs government permission first. However, Iran is adapting to this: When the US imposes sanctions on one address in Hong Kong, Iranian networks register new companies in neighboring offices.

European intermediary companies are another channel. In July 2026, Mahdi Mohammad Sadeghi, a 43-year old engineer, was convicted in federal court in Boston on charges related to a scheme to illegally export electronic components to Iran. Sadeghi had worked at Analog Devices, a global semiconductor company, helping an Iranian business partner bypass US export restrictions.

Turkey and the UAE are acting as key transit hubs. In April 2026, the US Treasury Department imposed sanctions on 14 individuals and organizations, including the Turkish company Emti Fiber Textile (a supplier of raw materials to produce nitrocellulose, an important component for solid missile propellant). Furthermore, sanctions lists include UAE-based companies supplying dual-use products from the US to Iran in violation of laws.

Yet another scheme: the procurement of US components via third countries by falsifying end-user information. In June 2026, US federal prosecutors arrested Jamshid Ghomi, who had for over a decade been using his company to acquire controlled US-origin networking equipment via a UAE-based shell company to smuggle it to Iran. He used the proceeds [of his sanctions-evasion scheme] to fund the construction of a $10.5 million mansion in Newport Coast.

Iran is adapting fairly quickly. When the US closes one channel, Tehran finds two new ones. Networks are becoming more decentralized and the schemes more sophisticated.

Iran’s own production: the defense industry under siege.

Iran has for decades been working to achieve self-sufficiency in defense – and not without success.

For example, Tehran’s own projects include the Zulfiqar-1 [main battle] tank, the Raad armored vehicle, and Kheibar Shekan and Haj Qasem ballistic missiles (with a range of up to 1,400 km). Iran is also developing a missile with a range of 3,000 km. The production of these systems has never stopped – either during the war or since the memorandum was signed.

According to SIPRI data, Iran’s share of global arms imports fell to 0.2%. However, this does not mean that Iran is not rearming. It means that it has switched to domestic production and the procurement of components instead of ready-to-use systems.

Iranian military officials say that some missile manufacturing facilities are concealed, [and] even the US knows nothing about them. These invisible factories continue to work in underground bunkers protected from air strikes.

However, there is also a weak spot here. After all, Iran’s defense sector is critically dependent on imported components. The Center for Strategic and International Studies (CSIS) says that Iran relies on a continuous, sustained influx of foreign imports, including [specialized] electronics, engines, raw materials and [precision] equipment, to maintain and restore its production capacities. US and Israeli attacks in 2026 have caused significant damage: the loss of nearly all of [Iran’s] naval surface fleet, and further damage to its military shipyards, naval bases and aboveground weapon production sites.

This is precisely why China and sanctions evasion schemes are being used. Iran’s defense industry would not be as productive without all that.

What’s next? Threats and uncertainties.

Clearly, the memorandum was only a respite. By mid-July, the US was launching daily strikes against Iran, [and] Trump acknowledged that the ceasefire was over. Later, so did Tehran.

According to the CSIS, Iran has lost a significant share of its military capability, but is sparing no efforts to reconstitute it. [Tehran] has sufficient resources for that: unfrozen assets, undamaged production capacities, established supply channels and reliable partners, such as Russia and China.

The main risks for the US and its allies: Iran will reconstitute its missile capability sooner than expected. Sanctions are not keeping pace with Iranian network schemes.

Thus, Iran’s rearmament is not so much a military-technical problem as yet another failure of the international finance and arms control system. “Yet another” because we have seen exactly the same in Russia, which is using Western components in arms production.

Today, Iran has secured temporary breathing space. Trump says that he wants to give negotiations a chance and then threatens to seize Kharg Island and take other punitive measures. However, clearly Iran is the one dictating terms – precisely thanks to its ability to bypass restrictions on trade in military equipment and its successful rearmament.