Iran state TV reported Thursday that the country had successfully tested a rocket that could send satellites into orbit.
"The US government will continue to aggressively counter Iran's ballistic missile-related activity, whether it be a provocative space launch, its development of threatening ballistic missile systems, or likely support to Yemeni Houthi missile attacks on Saudi Arabia such as occurred this past weekend", Mnuchin said, announcing the sanctions.
Resolution 2231, which endorsed the nuclear deal, only "calls upon" Iran not to undertake any activity related to ballistic missiles "designed to be capable of" delivering nuclear weapons.
"These sanctions target key entities involved in Irans ballistic missile program, and underscore the USA deep concerns with Irans continued development and testing of ballistic missiles and other provocative behaviour", said Treasury Secretary Steven T Mnuchin.
The same day, Iranian state television showed footage of the firing of the rocket, mounted on a launchpad, carrying pictures of Ayatollah Ruhollah Khomeini, founder of the Islamic Republic, and Supreme leader Ayatollah Ali Khamenei. SHIG is already under US, EU and United Nations sanctions.
The U.S. Senate on Thursday passed a sanctions bill aimed at curbing North Korea's nuclear weapons and missile development, as part of a package legislation that also targets Russian Federation and Iran.
This comes just two days after a U.S. Navy warship fired warning shots at an Iranian patrol boat in the Persian Gulf.
The nuclear deal does not cover Iran's ballistic missile programme.
He also denied that Iran is working toward an ICBM.
The Treasury move was announced just hours after the US Senate voted nearly unanimously to impose new sanctions on Iran, Russia and North Korea.
On Thursday, U.S. Strategic Command, which monitors launches around the world, could only confirm a satellite was not deployed from the rocket.
"Iran is not, and will not be, developing nuclear weapons; so by definition can not develop anything created to be capable of delivering them", Zarif said on Twitter.
"Rhetoric and actions from the USA show bad faith", Zarif said. "Progress in Iran's space program could shorten a pathway to an ICBM because space launch vehicles (SLV) use inherently similar technologies", the report said.