US: Iran sanctions regarding bunkering operations

The US Department of the Treasury’s Office of Foreign Asset Control (OFAC) provided an update regarding Iran sanctions for bunkering operations. In an updated FAQs document, OFAC clarifies that, even for vessels carrying lawful cargo to and from Iran, the provision of bunkers is unlawful and subject to US secondary sanctions, wherever it takes place, in the event the bunkering operation involves, inter alia, US financial institutions.

This means that a bunkering operation taking place in, for instance, Singapore and which is paid for in US dollars will be subject to US secondary sanctions in the event the vessel subsequently calls (or has previously called) Iran,

…the Swedish P&I Club explained.

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 US persons (including US financial institutions) or US-owned or -controlled foreign entities, or the transaction is exempt from OFAC regulation or authorized by OFAC if it does involve US persons (including US financial institutions) or US-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.

If a non-Iranian vessel is transporting sanctionable goods to or 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… if that transaction is determined to be a significant transaction for the purchase, acquisition, sale, transport, or marketing of those items,

…OFAC explained.

Find the updated FAQs here.

See also:

• Two ships detained in Singapore for breaching US sanctions
• US re-imposes secondary sanctions against Iran