OFAC Issues Update on Iran and Syria Sanctions, Deceptive Shipping Practices
The Treasury Department’s Office of Foreign Assets Control, the State Department and the U.S. Coast Guard issued an update to its maritime petroleum shipping advisory to warn of deceptive shipping practices by Syria and highlight sanctions risks U.S. companies may face if trading with Syria or Iran. The update, a 10-page report that includes lists of ships that have “engaged in sanctionable conduct,” is aimed at “shipping companies, vessel owners, managers, operators, insurers, and financial institutions” who may face “significant U.S. sanctions risks.”
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The report describes a series of tactics that companies use to lie about the destination of petroleum products that may be bound for Syria, including falsifying cargo and vessel documents, disabling the vessel’s automatic identification system (AIS) and vessel name changes. The report also describes ship-to-ship transfers, whereby a vessel transfers cargo to another ship while at sea to conceal the cargo’s origin or destination.
The report also lists a series of risk mitigation measures companies can take, including monitoring AIS manipulation, thoroughly reviewing all shipping documentation, vetting customers and strengthening anti-money laundering and counter-terrorism compliance. The report encourages companies to employ risk mitigation measures “consistent with Financial Action Task Force standards.”
Violators of U.S.-imposed sanctions on trade with Syria or petroleum shipments to Iran could face their own set of sanctions, the report warned, and be subject to civil fines. The report summarizes U.S. sanction policy against Iran and Syria, saying it will “aggressively target for designation” any person or company that trades with the governments of either of the two countries. That includes foreign entities and people, the report said, adding that any “non-U.S. persons that knowingly own, operate, control, or insure a vessel that transports crude oil from Iran to Syria” and that have not received an exception “could be subject to secondary sanctions.”