State Dept Sanctions 7 Firms for Support of Iran's Energy Sector

The seven companies are:

• Petrochemical Commercial Company International aka PCCI(Jersey/Iran)
• Royal Oyster Group (UAE)
• Speedy Ship aka Sepahan Oil Company or SPD (UAE/Iran)
• Tanker Pacific (Singapore)
• Ofer Brothers Group (Israel)
• Associated Shipbroking (Monaco)
• Petróleos de Venezuela (PDVSA) (Venezuela)

First Sanctions for Refined Petroleum-Related Activities under CISADA

These are the first sanctions imposed by the U.S. for refined petroleum-related activities under ISA since it was amended by CISADA.

The State Department states that the U.S. is aggressively working with international partners to maintain pressure on the Government of Iran to comply with its international nuclear obligations. These sanctions are an important step toward that goal, as they target Iran's ability to acquire and utilize resources in support of its illicit nuclear activities.

3 of Largest Suppliers Sanctioned for Deceptive Shipping Practices to Iran

According to the State Department, PCCI, Royal Oyster Group, and Speedy Ship are among the largest current suppliers of refined petroleum products to Iran and all three regularly engaged in deceptive practices in order to ship these products to Iran and evade U.S. sanctions. The sanctions the State Department has imposed on these firms will prohibit them from U.S. foreign exchange transactions, U.S. banking transactions, and all U.S. property transactions.

3 Firms Sanctioned for Tanker Transaction with ISIRL

Tanker Pacific, Ofer Brothers Group, and Associated Shipbroking are being sanctioned for their respective roles in a September 2010 transaction that provided a tanker valued at $8.65 million to the Islamic Republic of Iran Shipping Lines (IRISL), an entity that has been designated by the U.S., and the European Union for its role in supporting Iran's proliferation activities.

The State Department believes that Tanker Pacific and Ofer Brothers Group failed to exercise due diligence and did not heed publicly available and easily obtainable information that would have indicated that they were dealing with IRISL. Therefore, Tanker Pacific and Ofer Brothers Group are barred from securing financing from the Export-Import Bank of the U.S., from obtaining loans over $10 million from U.S. financial institutions, and from receiving U.S. export licenses.

According to the State Department, Associated Shipbroking knowingly acted on behalf of an IRISL front company. Accordingly, Associated Shipbroking is now prohibited from U.S. foreign exchange transactions, U.S. banking transactions and all U.S. property transactions.

(See ITT’s Online Archives or 03/31/11 news, 11033174, for BP summary of a recent OFAC advisory to alert shippers, importers/exporters and freight forwarders to practices used by IRISL to evade sanctions.)

Venezuelan Firm Sanctioned for Shipping Gas Blending Component to Iran

PDVSA, the state-owned oil company of Venezuela, has delivered at least two cargoes of reformate to Iran between December 2010 and March 2011, worth approximately $50 million. Reformate is a blending component that improves the quality of gasoline. The sanctions the State Department has imposed on PDVSA prohibit the company from competing for U.S. government procurement contracts, from securing financing from the Export-Import Bank of the U.S., and from obtaining U.S. export licenses. These sanctions do not apply to PDVSA subsidiaries and do not prohibit the export of crude oil to the U.S.

(See ITT’s Online Archives or 05/24/11 news, 11052423, for BP summary of a new Executive Order that implements certain requirements of ISA, as amended by CISADA.

See ITT’s Online Archives or 05/24/11 news, 11052451, for BP summary of a State Dept fact sheet on firms that reduced energy-related business with Iran.)

(Press release dated 05/24/11)

Deputy Secretary of State Steinberg’s briefing on the Iran sanctions is available here.