US Designates More Companies and 20 Ships in Crackdown on Iranian Oil

The United States lashed out broadly at the shipping community with a new round of sanctions that the U.S. State Department said are designed to further reduce Iranian energy exports. Iran responded by saying it was accustomed to the sanctions and that was proceeding with its business.

Using a Trump-era executive order issued in 2018, the State Department said it was further targeting a broad range of shipping companies and their vessels that were being used to facilitate Iran’s petroleum and petrochemical trade. The State Department designated six companies ranging from China to Vietnam as well as based in the United Arab Emirates (UAE) and Iran. It was part of a broader effort by the Department of State which also targeted a broad range of Chinese companies that it said were also supporting Beijing’s surveillance of ethnic minorities.

The announcement targeted both Global Marine Ship Management Co. based in Hong Kong and China as well as Shanghai Xuanrun Shipping Company Limited based in Shanghai and affiliates. The department also designated Vietnam-based company Golden Lotus Oil Gas and Real Estate Joint Stock Company, saying that it knowingly engaged in a significant transaction for the transport of petroleum products from Iran. United Arab Emirates-based Swedish Management Co. was also designated along with the Shiraz Petrochemical Company and Bushehr Petrochemical Co. both for also knowingly engaging in a significant transaction for the sale of petrochemical products from Iran.

“These designations underscore our continued efforts to enforce our sanctions against Iran,” Secretary of State Anthony Blinken said in the press statement announcing the actions. “We will not hesitate to take action against those who try to circumvent our sanctions.”

In addition to designating the six companies under the Department of the Treasury’s Office of Foreign Assets Control (OFAC) program, a total of 20 vessels were also listed. This included eight controlled by the Chinese Golden Lotus Oil Company and an additional six managed by Shanghai Xuanrun Shipping. Six vessels were also designated that were linked to the UAE-based Swedish Management.

The U.S. cautioned anyone conducting transactions that involved the companies or specifically the 20 vessels that they would risk exposure to U.S. sanctions. 

At the same time, though, the U.S. also issued a general license that it said was authorizing wind-down and limited safety and environmental transactions involving the vessels of the designated companies. Specifically, it permits through June 30 efforts to safely dock or anchor the vessels, as well as emergency repairs or environmental mitigation efforts. They said the license was issued for the preservation of the health or safety of the crew of any of the blocked vessels.

Analysts said the U.S.’s latest actions were in retaliation for a range of recent hostile acts from Iran as well as the continued frustration aimed at advancing the nuclear talks. A spokesperson for Iran’s mission to the U.S. told Reuters that if the U.S. wants to resume the talks Iran would be looking for a dropping of all the sanctions.

The U.S. appears to be attempting to broadly clamp down on sanction violations. Yesterday the Departments of Commerce, Treasury, and Justice combined to issue a compliance note regarding detecting third-party intermediaries used to evade sanctions. They specifically listed actions they believed were being taken to evade Russia-related sanctions and export control. Among the “red flags” they said to be monitoring for to detect sanction evasion is the use of shell companies, changes to shipping or payment instructions, a reluctance to share information about the final destination or user of the product, and changes to transactions that had originally involved Russia or Belarus.