Bunker suppliers take note – OFAC publishes updated FAQs regarding the application of Iranian sanctions to the bunker industry

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10 dez 2019

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On November 5, 2019 the Office of Foreign Asset Control (OFAC) issued new Frequently Asked Questions (FAQs) clarifying the impact of US sanctions imposed against Iran on the bunkering industry.

Revised FAQ 296

The revised FAQ 296 makes clear that US sanctions are intended to completely prohibit any US entity involvement with the provision of bunkers to vessels trading with Iran, including the involvement of the US financial institutions.

This means that if a non-US entity were to bunker a non-Iranian vessel that is calling at an Iranian port, the transaction could not include payment in US Dollars, as any wire transaction denominated in US Dollars would have to transit the US financial system. 

Two new FAQs

OFAC also published two new FAQs, numbers 691 and 692, that attempt to explain OFAC’s enforcement of Iranian sanctions in connection with bunkering of vessels at non-Iranian ports. 

FAQ 691 addresses bunkering non-Iranian vessels carrying Iranian-sourced cargo at a non-Iranian port. 

A possible violation would depend upon:

  • Whether the cargo is sanctioned (steel, copper, aluminum, petroleum and petroleum products, etc.).
  • The identity of the shipper.
  • Whether the carriage of goods is connected with specific sanctioned Iranian industries and individuals.
  • If the bunkering transaction is found to provide “material support” for the Iranian National Oil Company or Naftiran Intertrade Company.

FAQ 691 cautions that facilitating payments for the bunkering services may also violate sanctions. The admonition is not limited to US financial institutions. Therefore, it may be inferred that any bank, regardless of location, facilitating payment in a situation where the provision of bunkers violated sanctions may also be violating US sanctions.

FAQ 692 provides further guidance with regard to providing bunkering services to vessels trading with Iran. 

  • Bunkering a vessel importing or exporting cargo from Iran could be sanctionable if the shipping transaction constitutes selling or transferring significant goods or services to or from Iran in connection with sanctioned industries.
  • Bunkering Iranian owned, chartered or controlled vessels could be sanctionable, regardless of the type of cargo or Iranian party involved.
  • Non-US financial institutions that knowingly facilitates payment for bunkers provided to a vessel engaged in a sanctionable transaction may be subject to sanctions.
  • Non-US persons providing bunkering services to or facilitating payment for bunkers delivered to a vessel that is identified as “blocked property” or to an Iranian person on OFAC’s list of Specially Designated Nationals and Blocked Persons, may themselves be designated on the list.

Comment

The new and improved FAQs are intended to provide guidance, and not to categorically state that one transaction is allowed while another is not. 

The guidance provided by FAQs 691 and 692 clearly indicates that any transaction involving an Iranian controlled vessel, Iranian cargo or Iranian nationals should be approached with great care. Bunker suppliers should ensure that - at the very least - their standard practice includes consulting OFAC’s Specially Designated Nationals and Blocked Persons List (SDN) as well as OFAC’s “Consolidated Sanctions List” which is a single source for non-SDN sanctions.

Failure to make a good faith attempt to identify a sanctionable transaction will make a violation that much worse. As FAQ 692 states, failure to consult the SDN List may result in the non-US supplier and/or financial institution facilitating the payment being placed on the OFAC List. 

Any commercial concern operating in the world market should have a written compliance policy and a designated compliance officer to manage and update the policy. In the event of a sanctions violation, the OFAC will look to see whether there was a written policy, training and a management level compliance officer when assessing any fine or other sanction.       

When in doubt, consult OFAC directly, and we recommend that this caution is exercised when dealing with any transaction that involves Iran, not just in respect of bunkering services. It has been our experience while assisting clients with US sanction related matters that OFAC is very willing to help parties to avoid a sanctions violation. The goal of the sanctions programs is to prevent transactions that will assist Iran, not to collect fines for sanctions violations.

Read more items in Marine Brief - December 2019

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