Shipments of petroleum in violation of U.S. sanctions laws and regulations pose a significant “sanctions risk” for entities and individuals in the shipping industry.
On March 25, 2019, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) issued a comprehensive update on its advisory to the maritime petroleum shipping community in which it outlines the significant risks associated with petroleum shipments involving Iran and Syria.
Shipments of petroleum in violation of U.S. sanctions laws and regulations pose a significant “sanctions risk” for entities and individuals in the shipping industry, including shipping companies, vessel owners, managers, operators, insurers and financial institutions. OFAC notes that countries such as Iran and Russia have been actively engaged in such unlawful shipments of petroleum and petroleum products that are the subject of U.S. and European Union sanctions against Syria.
As noted by OFAC, U.S. sanction regulations impose broad prohibitions regarding trade and other transactions subject to U.S. jurisdiction. Private and public sector entities involved in unlawful trade with Syria in petroleum and petroleum products have been sanctioned by OFAC. Unlawful schemes used to avoid U.S. sanctions include certain payment offsetting arrangements in which “… the sale and shipment of Iranian oil to Syria provided hundreds of millions of dollars to Iran’s terror proxy groups, including Hizballah, HAMAS, and the Islamic Revolutionary Guard Corps Qods Force.”
It’s not only insurers, shipping companies, financers and others involved in petroleum-related shipping transactions with the government of Syria that are targeted. Entities that knowingly engage in certain transactions relating to the purchase, acquisition, sale, transport or marketing of petroleum or petroleum products from Iran or providing material support to certain Iran-related persons on OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List) also risk being sanctioned under U.S. sanctions relating to Iran.
Please refer to the full OFAC Advisory to the Maritime Petroleum Shipping Community.
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