Flurry of New Iran-Related Sanctions Imposed by U.S. Government

There has been a flurry of sanctions activity under the Iran Sanctions Act, as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA).

Yesterday President Obama issued an Executive Order that authorizes OFAC to implement ISA and CISADA related sanctions on parties and individuals that have been determined by the Secretary of State to have violated ISA/CISADA.

Today OFAC announced several sets of ISA/CISADA sanctions on a number of companies. Because ISA and CISADA authorize a wide variety of sanctions to be imposed, the sanctions that are imposed under ISA/CISADA can vary from entity to entity.

ISA/CISADA sanctioned parties are now designated on OFAC's SDN List as [ISA].

As for the specific sanctions, OFAC has added the following three shipping companies to the SDN List for providing shipping services in violation of CISADA:

• ASSOCIATED SHIPBROKING (a.k.a. ASSOCIATED SHIPBROKING S.A.M.; a.k.a. "SAM"), Gildo Pastor Center - Block C 4.20, 7 rue du Gabian, Fontvieille MC 98000, Monaco [ISA]

• ROYAL OYSTER GROUP, ROG Corporate Office, Royal Oyster General Trading LLC, P.O. Box 34299, Dubai, United Arab Emirates [ISA]

• SPEEDY SHIP FZC (a.k.a. SEPAHAN OIL COMPANY; a.k.a. "SPD"), Room 206, 2nd Floor, Building W5B, Dubai Airport Free Zone, P.O. Box 54916, Dubai, United Arab Emirates [ISA]

OFAC also added PETROCHEMICAL COMMERCIAL COMPANY INTERNATIONAL (PCCI) to the SDN List for CISADA violations, but that company was already on the SDN List due to other Iran-related sanctions.

In the event that any U.S. accounts need to be blocked as a result of these designations, the procedures in the Iran Financial Sanctions Regulations (31 CFR Part 561) need to be followed.

In addition, for the first time OFAC is implementing targeted sanctions under CISADA on the following two companies located in Singapore and Israel:

• Ofer Brothers Group, Ramat Aviv Tower, 40 Einstein St., P.O.B #11, Tel Aviv, 69102 Israel; MATAM Haifa, 9, Andre Saharov St., P.O.B #5090, Haifa, 31905 Israel

• Tanker Pacific Ship Management (a.k.a Tanker Pacific), Headquarters (Singapore), Tanker Pacific Management (Singapore) Pte Ltd, 1 Temasek Avenue, #38-01,Millenia Tower, Singapore 039192

U.S. financial institutions are now prohibited from making loans or providing credits totaling more than $10,000,000 in any 12-month period to these two companies unless the activity is associated with the relief of human suffering and the loans or credits are provided for such activities. However, it is important to note that these companies are not being added to the SDN List and there is no need to block any property or funds in U.S. accounts.

Finally, today the U.S. imposed sanctions on the Venezuelan state-owned oil company PDVSA for shipping refined petroleum to Iran. However, the sanctions are limited in scope and prohibit PDVSA from competing for U.S. government procurement contracts, from getting financing from the Export-Import Bank of the U.S. and from obtaining U.S. export licenses. Crude oil exports by PDVSA to the U.S. are not affected.

This new “mix and match” sanctions approach under ISA/CISADA will make it difficult for banks and companies to monitor the type of activity that is permissible or not.