Trading with Syria Take legal advic

Although we get more enquiries from clients involved with Iranian shipments, we have recently dealt with a number of cases where ship owners under charter have received orders to trade to Syrian ports. We would urge those clients to obtain prompt legal advice on whether such orders are legitimate. If a charterer continues to press an owner to perform a trade that is prohibited by the terms of the charter then that can amount to repudiatory breach of the charter permitting the ship owner to terminate the charter and claim damages. The damages claim can amount to millions of dollars if dealing with a long term charter which has many years left to run.

There are well known prohibitions in place as regards petroleum products being shipped to Syria. The US has imposed wide ranging sanctions and if anything they are hardening their attitude to Syria. Many clients don’t realise that these sanctions are not just restricted to US persons or companies. The US has provisions in place that allow the blocking of any property in the US of any person (not just a US person) if that person is deemed to have materially assisted, sponsored, or provided financial material or technological support for, or goods or services in support of, any person whose property and interests are sanctioned or blocked. In other words, even though the underlying trade itself may not be specifically sanctioned because it does not involve any US persons, the ship owner who facilitates it can have their assets blocked in the US. That is a major concern for ship owners who also trade to the US or who have offices in the US. Such facilitation if discovered (and there are teams of OFAC investigators who spend their days checking) may also lead to a ship owner being added to the US list of sanctioned entities.

The moral of the story is to take advice if asked to trade to Syria. Although the current focus is on petroleum, in one recent advisory the US made it clear that the US sanctions related to disrupting illicit financial and other support to the Syrian Government. It follows that the spotlight is on all trade to Syria that could be deemed to be support for the Syrian regime. Our take on that is that any state owned importer, whether on the OFAC SDN or not, could fall into this definition.

We deal with dozens of questions each year from clients on sanctions related issues. Whilst we deal with and advise on the English law aspects, we also have a strong network of 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.

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