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OFAC issues new guidance clarifying the impact of its Iran sanctions on bunker service providers

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主页 观点 OFAC issues new guidance clarifying the impact of its Iran sanctions on bunker service providers
In a move that will undoubtedly cause greater challenges for the shipping community, on September 5, 2019, the U.S. Office of Foreign Assets Control (“OFAC”) updated its Frequently Asked Questions (‘’FAQ’’) by revising FAQ 296 and publishing two new FAQs to address the bunkering of non-Iranian and Iranian vessels. This update follows OFAC’s designation of the now infamous Grace 1 (aka Adrian Darya) as well as its Indian captain, Akhilesh Kumar, for apparently transporting 2.1 million barrels of Iranian crude oil to Syria in contravention of both U.S. and EU sanctions. These FAQs mark a further attempt by the United States to exert pressure over and isolate Iran, at a time where the future of the Joint Comprehensive Plan of Action hangs in the balance. It remains to be seen whether extraterritorial designations will follow the publication of these FAQs, but it will certainly make the support of voyages involving Iranian cargo and vessels markedly more difficult.

In FAQ 296, OFAC states that providing bunkering services to non-Iranian vessels carrying non-sanctionable goods to or from Iran is not itself subject to U.S. sanctions. However, providing bunkering services can expose a non-U.S. person to a risk of sanctions if the voyage involves U.S. persons and/or persons on the Specially Designated Nationals (“SDN”) List that have been designated in connection with Iran’s support for international terrorism or the proliferation of weapons of mass destruction, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (“IRGC”). The provision of bunkering services can also create exposure to sanctions if the transaction involves some other activity that is subject to sanctions – a “catchall” suggesting OFAC’s intention to construe its powers broadly. Non-U.S. persons may face sanctions if they provide bunkering services to vessels transporting sanctionable goods, such as petroleum, petroleum products, copper, and aluminium to or from Iran. See FAQ 691.

OFAC also explains that providing bunkering services to an Iranian flagged vessel or a vessel owned, controlled, chartered, or operated by, or for the Government of Iran, or an Iranian person, could be sanctionable. Processing or facilitating payments for these services would also expose foreign financial institutions to a risk of sanctions. Of course, non-U.S. persons may also be designated if they provide bunkering services to a vessel that has been identified as blocked property of an Iranian SDN.

Finally, OFAC has again reiterated that the sale, purchase, and transportation of agricultural commodities, food, medicine, and medical devices, or providing bunkering services for vessels carrying those products, will not create exposure to secondary sanctions unless the transaction involves a person on the SDN List who has been designated under Executive Order 13224 or 13382 in connection with Iran’s support for international terrorism or the proliferation of weapons of mass destruction, including certain designated Iranian financial institutions or the IRGC. This likely provides little comfort for those seeking to provide humanitarian goods and services to Iran as the compliance challenges surrounding those transactions have become increasingly more difficult. If a transaction for the purchase, sale, or transportation of these goods involves some other sanctionable activity, the persons involved will be exposed to a risk of sanctions.