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U.S. publication of new and amended Iran-related FAQs

U.S. publication of new and amended Iran-related FAQs

The U.S. Treasury Department, Office of Foreign Assets Control (OFAC), today announced updates to and publication of new “frequently asked questions” (FAQs) regarding bunkering of non-Iranian and Iranian vessels carrying goods to or from Iran.

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Updated FAQ 296 and newly published FAQs regarding bunkering of non-Iranian and Iranian vessels carrying goods to or from Iran are provided below:

296. Will the provision of bunkering services to a non-Iranian vessel carrying non-sanctionable goods to or from Iran be subject to sanctions?

If a non-Iranian vessel is transporting non-sanctionable goods to or from Iran, the bunkering of that non-Iranian vessel in a country other than Iran — and related payments for these bunkering services — will not be subject to sanctions, only if (1) the transaction either does not involve U.S. persons (including U.S. financial institutions) or U.S.-owned or -controlled foreign entities, or the transaction is exempt from OFAC regulation or authorized by OFAC if it does involve U.S. persons (including U.S. financial institutions) or U.S.-owned or -controlled foreign entities, and (2) the transaction does not involve persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) that have been designated in connection with Iran’s support for international terrorism or proliferation of weapons of mass destruction, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or activity that is subject to other sanctions authorities. [09-05-2019]


691. Will the provision of bunkering services to a non-Iranian vessel carrying sanctionable goods to or from Iran be subject to sanctions?

If a non-Iranian vessel is transporting sanctionable goods to or from Iran (including, but not limited to, petroleum, petroleum products, or petrochemical products from Iran; goods used in connection with the automotive sector of Iran; or iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran), bunkering of that non-Iranian vessel in a country other than Iran — and related payments for these bunkering services — risk being subject to sanctions unless an applicable waiver or exception applies. For example, persons providing bunkering services to a non-Iranian vessel transporting petroleum or petroleum products from Iran could be designated under subsection 1(a)(ii) of E.O. 13846 if such activities involve the provision of material support for, or goods or services to or in support of, NIOC or NICO. Persons that knowingly provide bunkering services to a non-Iranian vessel carrying only petroleum or petroleum products from Iran could likewise be sanctioned under section 3(a)(ii) of E.O. 13846 if that transaction is determined to be a significant transaction for the purchase, acquisition, sale, transport, or marketing of those items. [09-05-2019]


692. Will the provision of bunkering services for an Iranian vessel be subject to sanctions?

Section 1244(d)(1) of IFCA makes sanctionable knowingly selling, supplying, or transferring to or from Iran significant goods or services used in connection with Iran’s energy, shipping, or shipbuilding sectors. (See FAQ 289 above for an interpretation of “significant.”) The provision of bunkering services to a vessel flying the flag of the Islamic Republic of Iran, or owned, controlled, chartered, or operated directly or indirectly by, for, or on behalf of the Government of Iran (GOI) or an Iranian person, could be sanctionable under this authority, regardless of whether the transaction involves persons that have been determined to be part of Iran’s energy, shipping, or shipbuilding sectors pursuant to Section 1244(c) of IFCA. Likewise, pursuant to section 1244(d)(2) of IFCA, a foreign financial institution could be exposed to sanctions if it knowingly conducts or facilitates a significant financial transaction for the sale, supply, or transfer to or from Iran of goods or services used in connection with Iran’s energy, shipping, or shipbuilding sectors. Payments for the provision of bunkering services to a vessel flying the flag of the Islamic Republic of Iran or owned, controlled, chartered, or operated directly or indirectly by, for, or on behalf of the GOI or an Iranian person could be sanctionable under this authority, regardless of whether the transaction involves persons that have been determined to be part of Iran’s energy, shipping, or shipbuilding sectors pursuant to Section 1244(c) of IFCA. (See FAQ 295).

In addition, the bunkering by non-U.S. persons of an Iranian vessel that has been identified as blocked property of an Iranian person on OFAC’s List of Specially Designated Nationals and Blocked Persons — and the making of related payments for these bunkering services — risk being designated themselves.

However, the provision of bunkering services for an Iranian vessel transporting goods subject to an exception, such as agricultural commodities, food, medicine, or medical devices, to Iran, or subject to an applicable waiver — and the making of related payments for these bunkering services — will not be exposed to sanctions, unless the transactions involve persons on the SDN List that have been designated under E.O. 13224 or E.O. 13382 in connection with Iran’s support for international terrorism or proliferation of weapons of mass destruction, including certain designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), as described in section 104(c)(2)(E) of CISADA, or activity that is subject to other sanctions authorities. [09-05-2019]

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117
E: rwaldrop@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

 

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