On 25th September the United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) added a number entities to the list of Specially Designated Nationals (“SDN”) after being found by OFAC to meet the criteria for the imposition of Iran-related sanctions. Executive Order (“E.O.”) 13846. E.O. 13846, which was issued in August 2018, provides for sanctions to be imposed against any party who has purchased, acquired or transported petroleum or petroleum products from Iran. The additions to the list include a number of Chinese controlled shipping companies including;
- CHINA CONCORD PETROLEUM CO., LIMITED
- COSCO SHIPPING TANKER (DALIAN) CO., LTD. (a.k.a. COSCO SHIPPING TANKER DALIAN; a.k.a. DALIAN OCEAN SHIPPING CO., LTD.; a.k.a. DALIAN OCEAN SHIPPING COMPANY; a.k.a. DALIAN YUANYANG YUNSHU GONGSI; a.k.a. DALIAN YUANYANG YUNSHU YOUXIAN GONGSI; a.k.a. DALIAN ZHONGYUAN HAIYUN YOUPIN YUNSHU YOUXIAN GONGSI
- COSCO SHIPPING TANKER (DALIAN) SEAMAN AND SHIP MANAGEMENT CO., LTD. (a.k.a. COSCO SHIPPING SEAMAN SHP MGMT),
- KUNLUN HOLDING COMPANY LTD.,
- KUNLUN SHIPPING COMPANY LIMITED
- PEGASUS 88 LIMITED
US citizens and companies may no longer conduct business with these designated entities. The position with regard to non US persons / companies is less clear but the fact that these entities have been sanctioned for trading with Iran means that there must also be a substantial risk that anyone who trades with these entities or who provides services to these entities is also at risk of being designated as an SDN.
The inclusion of two COSCO controlled entities on the list has led to many questions about whether there is any risk in entering into business with the corporate parent and affiliates. We have already received many approaches from clients who are affected by these issues and we have been asked to advise them on remedies available under their contracts.
We deal with dozens of questions each year from clients on sanctions related issues. Whilst we deal with and advise clients on the English law aspects, we also rely on connections with US lawyers including many who have formerly worked for OFAC. This means that we can respond quickly to sanctions related issues and get clients the advice that they need to avoid problems and protect their position.