Bunker fuel providers are the filling stations to the world’s ship fleet, but depending on their nationality, they must ensure that they don’t run afoul of U.S. sanctions, according to the Treasury Department’s Office of Foreign Assets Control (OFAC).
This has become a complicated issue for ship bunker providers as Iranian state-controlled enterprises use myriad tactics to evade U.S. trade sanctions.
Numerous Iranian companies and individuals, including nearly 200 ships, currently are listed on OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List for violating U.S. sanctions imposed on Iran, as well as for U.S. national security and foreign policy concerns.
OFAC has attempted to bring clarity to which ship bunkering activities might violate U.S. sanctions for Iran with an update of one “frequently asked questions” entry and the addition of two other ship bunker-specific entries on Sept. 5.
The updated question asks whether bunkering services to a non-Iranian vessel carrying non-sanctionable goods to or from Iran are subject to U.S. sanctions.
OFAC said providing ship bunker to a non-Iranian vessel transporting non-sanctioned goods to or from Iran is not subject to U.S. sanctions unless the service involves U.S. persons or financial institution, or is U.S.-controlled or an overseas U.S. affiliate. The transaction also must not involve individuals or entities on the SDN List.
A new question asks whether bunker provided to a non-Iranian vessel transporting “sanctionable” goods to or from Iran is subject to U.S. sanctions.
OFAC said if the non-Iranian vessel is transporting sanctioned products, such as petroleum, steel, aluminum and copper, then bunkering that vessel in any other country but Iran runs the risk of violating U.S. sanctions.
The second new question asks whether providing bunker to an Iranian vessel is subject to sanctions.
OFAC said the 2012 Iran Freedom and Counter-Proliferation Act “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.”
The rule similarly applies to financial transactions involving ship bunkering of Iranian vessels.
The agency added that “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, OFAC said bunkering services provided to an Iranian vessel transporting agricultural commodities, food, medicine or medical devices to Iran, which are subject to an exception, will “not be exposed” to U.S. sanctions if they do not involve a person or entity on the SDN List.