On November 14, 2011 the US Department of the Treasury, Office of Foreign Assets Control (“OFAC”) implemented certain of the sanctions imposed on seven persons by the Secretary of State under the Iran Sanctions Act of 1996 (“ISA”). The ISA, as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”), requires the Secretary of State (pursuant to authority delegated by the President) to impose or waive sanctions on persons determined to have engaged in certain activities in regards to Iran, including but not limited to, making certain investments in Iran’s energy sector, exporting refined petroleum products to Iran, or providing assistance to allow Iran to maintain or enhance its own refining capacity. Pursuant to Executive Order 13574 (May 23, 2011), OFAC is responsible for implementing five of the specific sanctions that the Secretary of State may impose under the ISA.
The Secretary of State imposed ISA sanctions on eight persons on September 14, 2011. In particular, the Secretary of State imposed on seven of these eight persons at least one of the five sanctions that OFAC is responsible for implementing. Accordingly, OFAC has published a Federal Register notice regarding its implementation of sanctions against the following seven persons:
- Allvale Maritime Inc. (Liberia)
- Associated Shipbroking (Monaco)
- Petrochemical Commercial Company International (UAE, Jersey, Turkmenistan, Iran, and all offices worldwide)
- Royal Oyster Group (UAE)
- Société Anonyme Monégasque D’Administration Maritime Et Aérienne (“SAMAMA”) (Monaco)
- Speedy Ship FZC (UAE)
- Tanker Pacific Management (Singapore) Pte. Ltd.
In particular, OFAC is implementing the following sanctions against Allvale Maritime, SAMAMA, and Tanker Pacific Management: “The Director of OFAC has prohibited United States financial institutions from making loans or providing credits totaling more than $10,000,000 in any 12-month period to [the sanctioned entity] unless it is engaged in activities to relieve human suffering and the loans or credits are provided for such activities.” This prohibition is limited to lending by US financial institutions, so it is not likely to affect the compliance obligations of other US persons.
Regarding Associated Shipbroking, Petrochemical Commercial Company International, Royal Oyster Group, and Speedy Ship, OFAC is implementing the following three sanctions:
- Blocking all property and interests in property of the sanctioned entity that are or come within the United States, or that are or come within the possession or control of any United States person, including any overseas branch, and provided that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in;
- Prohibiting any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned entity has any interest; and
- Prohibiting any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned entity.
The first of these three sanctions is a blocking provision, similar to that used in many other OFAC sanctions programs. The four persons whose property and interests in property were blocked have been added to OFAC’s Specially Designated Nationals (“SDN”) List. US persons are prohibited from transacting with these entities, as with all other SDNs. The second and third sanctions are again focused on US financial institutions. The compliance obligations for these additional sanctions will be facilitated by the fact that the sanctioned entities are included on the SDN List, and therefore generally off limits to all US persons, including US financial institutions.
The effective date of OFAC’s actions is November 14, 2011, or the date on which actual notice was given to the parties, whichever is earlier. The Secretary of State imposed sanctions on Associated Shipbroking, Petrochemical Commercial Company International, Royal Oyster Group, Speedy Ship FZC, and Tanker Pacific Management (Singapore) Pte. Ltd. on May 24, 2011. The sanctions on Allvale Maritime and SAMAMA were imposed on August 26, 2010.