This week, the United States Department of the Treasury is imposing sanctions on four entities and three vessels involved in the trade of Iranian petroleum and petrochemicals, which generate billions of dollars’ worth of revenue for the Iranian regime. This revenue supports Iran’s nuclear program, its development and proliferation of provocative ballistic missiles, and financing of terrorist proxy groups such as Hizballah, Hamas, and the Houthis. Vessels transporting Iranian petroleum and petrochemicals frequently use methods of obfuscation and deception to mask this trade, posing a significant danger to the maritime industry.
Concurrently, the U.S. Department of State is taking action against four entities in multiple jurisdictions involved in the movement of Iranian petroleum.
“Iran’s continues to rely on its shadowy network of vessels, companies, and facilitators to finance the development of its nuclear program, the proliferation of its weapons systems, and support to its proxies,” said Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith. “The United States is committed to targeting Iran’s key revenue streams that fund its destabilizing activities.”
Today’s action is being taken pursuant to Executive Order (E.O.) 13902, which provides authority to the Secretary of the Treasury, in consultation with the Secretary of State, to identify and impose sanctions on key sectors of Iran’s economy. On October 11, 2024, the Secretary of the Treasury identified the petroleum and petrochemical sectors of the Iranian economy as subject to sanctions pursuant to section 1(a)(i) of E.O. 13902. The Office of Foreign Assets Control (OFAC) has released sanctions guidance for the maritime industry to aid in identifying new or common fact patterns that may be indicative of sanctions evasion, addressing common counterparty due diligence issues, and implementing best practices to promote sanctions compliance.
TARGETING COMPANIES AIDING IRANIAN PETROLEUM SALES
The Iranian petroleum sector relies on various maritime industry partners to support its illicit oil trade, which generates financial resources used to support its malign activities, including missile development, financing of terrorist proxy networks, and its nuclear program. The dark fleet transporting Iranian oil tends to consist of older, poorly maintained vessels operating outside of standard maritime regulations which, when combined with other deceptive shipping practices, also creates a dangerous operating environment that can pose serious risk to other shipping activities.
Marshall Islands-registered Journey Investment Company is the registered owner of the Djibouti-flagged crude oil tanker MS ENOLA (IMO: 9251951), which has been involved in the illicit transfer of Iranian oil for several years. The MS ENOLA recently received millions of barrels of Iranian oil in a ship-to-ship transfer from sanctioned National Iranian Tanker Company tanker DINO I (IMO: 9569671), formerly known as the INFINITY. The MS ENOLA has continued to use deceptive practices to help obfuscate its illicit activity, including turning off its automated identification system (AIS).
Liberia- and Greece-registered Rose Shipping Limited is the manager and operator of the MS ENOLA, the San Marino-flagged MS ANGIA(IMO: 9246281), and the Panama-flagged MS MELENIA (IMO: 9302023). Like the MS ENOLA, the MS ANGIA has been involved in illicit Iranian oil shipments dating back several years. Marshall Islands-registered Passada Maritime Limitedis the registered owner of the MS ANGIA.
Journey Investment Company, Rose Shipping Limited, and Passada Maritime Limited are being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. The MS ENOLA is being identified as property in which Journey Investment Company has an interest. The MS ANGIA and the MS MELENIA are being identified as property in which Rose Shipping Limited has an interest.
In early 2024, Hong Kong-based Master Joint Co., Limited was used by U.S.-sanctioned Iranian trader Triliance Petrochemical Company to coordinate the sale of Iranian petrochemicals. Master Joint Co., Limited is being designated for operating in the petroleum and petrochemical sectors of the Iranian economy. Triliance Petrochemical Company was designated pursuant to E.O 13846 on January 23, 2020, for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, the National Iranian Oil Company.
STATE DEPARTMENT DESIGNATIONS
The U.S. Department of State is also taking action against a number of entities in multiple jurisdictions involved in the illicit movement of Iranian petroleum.
Seychelles-based Shiny Sails Shipping Ltd, India-based Atlantic Navigation OPC Private Limited, Suriname-based Galaxy Management NV, and Hong Kong-based Brecalin Hong Kong Co Ltd are all being designated pursuant to E.O. 13846 for having knowingly engaged in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran.
The Cameroon-flagged vessel AVITAL (IMO: 9246279) is being identified as property in which Shiny Sails Shipping Ltd has an interest. The Panama-flagged vessel VIGOR (IMO: 9262156) is being identified as property in which Galaxy Management NV has an interest. The Barbados-flagged vessels PROGRESS V (IMO: 9316701) and SCORPIUS (IMO: 9264893), along with the Panama-flagged vessels TASCA (IMO: 9313149) and ELIZA II (IMO: 9418078) are being identified as property in which Brecalin Hong Kong Ltd has an interest.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. U.S. persons may face civil or criminal penalties for violations of E.O. 13902.
In addition, persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to an enforcement action. Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law.
Source: US Department of Treasury
