On December 3, 2024, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it was “intensifying pressure” on Iran’s petroleum and petrochemical sectors by imposing sanctions on 35 entities and vessels “that play a critical role in transporting illicit Iranian petroleum to foreign markets.” This action identifies and imposes further sanctions on Iran’s “shadow fleet” of vessels that Iran relies upon in a network of tankers and ship management firms in multiple jurisdictions to transport its petroleum to overseas customers by using tactics such as false documentation, manipulation of vessel tracking systems, and constant changes to the names and flags of vessels. This most recent action is in further response to Iran’s October 1 attack on Israel, as well as Iran’s announced nuclear escalations. It also builds on the sanctions issued on October 11, 2024. See Thompson Hine Update of October 14, 2024.
The Secretary of the Treasury has identified the petroleum and petrochemical sectors of the Iranian economy pursuant to a Determination under section 1(a)(i) of Executive Order (E.O.) 13902, which allows Treasury to identify and impose sanctions on key sectors of Iran’s economy. Acting Under Secretary for Terrorism and Financial Intelligence Bradley Smith stated that, “[t]he United States remains committed to disrupting the shadow fleet of vessels and operators that facilitate these illicit activities, using the full range of our tools and authorities.” For additional identifying details on these shipping management entities and vessels located in multiple countries see here.
As a result of these OFAC actions, all property and interests in property of the designated persons that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50% or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.