The penalties, which took effect May 9 but were announced by the State Department Thursday, call for termination of all existing contracts between the US government and the North China Industries Corporation, or NORINCO, and Shahid Hemmat Industrial Group, a leader Iranian missile manufacturer.

The order also bans all US assistance to the concerns and calls for the revocation of all export-import licenses they may have held to conduct business in the United States, according to State Department spokeswoman Jo-Anne Prokopowicz.

The two arms giants are also barred from selling goods and services in the United States.

"These penalties were imposed because the US government determined that these entities contributed materially to the efforts of a foreign country -- in this specific case Iran - to use, acquire, design, develop, produce or stockpile missiles capable of delivering weapons of mass destruction," Prokopowicz told AFP.

The measures will remain in effect for two years and then expire.

SPACE.WIRE