On June 8, 2020, the State Department announced sanctions against the Islamic Republic of Iran Shipping Lines (IRISL) and its Shanghai-based subsidiary, E-Sail Shipping Company Ltd (E-Sail) pursuant to Executive Order 13382, which targets weapons of mass destruction (WMD) proliferators and supporters. In a press statement, Secretary of State Mike Pompeo noted that, “IRISL has repeatedly transported items related to Iran’s ballistic missile and military programs and is also a longstanding carrier of other proliferation-sensitive items. . . . Despite Iran’s claims that it will never develop nuclear weapons and associated delivery systems, the Iranian regime has continued to pursue and procure proliferation-sensitive items in violation of UN Security Council Resolution 2231.”
Upon this announcement, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) has placed IRISL, E-Sail, and numerous other Iranian-flagged, as well as other foreign-flagged ships known to carry Iranian goods, on the Specially Designated Nationals and Blocked Persons (SDN) List. As a result of this action, all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. Because U.S. persons are generally prohibited from dealing with entities on the SDN List, persons who engage in certain transactions with these designated persons may themselves be exposed to designation on the SDN List. OFAC has indicated that any foreign financial institution that knowingly facilitates a significant financial transaction or provides significant financial services for these persons could be subject to U.S. correspondent account sanctions or payable-through account sanctions. A full listing of the designated vessels and entities is available here.
Secretary Pompeo urged “government authorities worldwide to investigate all IRISL and E-Sail activity in your ports and territorial seas and take appropriate action to put a halt to it.” In addition, he reminded the maritime industry to review the U.S. Guidance to Address Illicit Shipping and Sanctions Evasion Practices, which addresses how Iran abuses the international shipping system to advance illicit activities. For more on this guidance, see Trump and Trade Update of May 14, 2020.