The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), with the U.S. Department of State and the U.S. Coast Guard, is issuing this advisory to alert persons globally to the significant U.S. sanctions risks for parties involved in petroleum shipments to the Government of Syria. These shipments create significant sanctions risk for entities and individuals in the shipping industry, including shipping companies, vessel owners, managers, operators, insurers, and financial institutions. Countries such as Iran and Russia have been involved in providing the Government of Syriawith petroleum. Those who in any way facilitate the financial transfers, logistics, or insurance associated with these or other petroleum shipments are at risk of being targeted by the United States for sanctions. The United States is committed to disrupting illicit financial and other support to the Government of Syria, to include transporting petroleum to its state-owned and -operated ports, regardless of the location or nationality of those facilitating such support.
The United States and its international partners continue to demonstrate resolve to disrupt support for the Assad regime by preventing the normalization of economic and diplomatic relations and the provision of reconstruction funding, as well as permanently denying the regime the use of chemical weapons. The United States is committed to isolating the Assad regime and its supporters from the global financial and trade system in response to the continued atrocities committed by the regime against the Syrian people. The United States and European Union (EU) maintain sanctions programs against Syria, and the United States will continue tomaximize pressure on the Assad regime and impose additional financial costs on the regime and its network of financial and logistics facilitators.
In connection with this activity, in November 2018, OFAC sanctioned Iranian and Russian private and public sector entities involved in procuring Iranian oil for Syria. This scheme used a payment offsetting arrangement in which the sale and shipment of Iranian oil to Syria provided hundreds of millions of dollars to Iran’s terror proxy groups, including Hizballah, HAMAS, and the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF).
United States sanctions regulations broadly prohibit trade and other transactions, subject to U.S. jurisdiction, with the Government of Syria, and has the authority to sanction entities or individuals who provide support to the Government of Syria—including those who deliver or finance petroleum shipments to the Government of Syria or government-owned entities, such as the U.S.-designated Syrian Company for Oil Transport or Banias Refinery Company.
This advisory contains an annex providing a non-exhaustive list of vessels that have delivered petroleum to Syria, engaged in Ship-to-Ship (STS) transfers of petroleum destined for Syria, or have exported Syrian petroleum since 2016 [1]. Some of these shipments and transfers have involved Iranian-origin oil.
Insurers, shipping companies, financial institutions, and others involved in petroleum-related shipping transactions with the Government of Syria may be subject to designation under one or more sanctions authorities. Similarly, individuals and entities knowingly engaged in certain transactions relating to the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran or providing material support to certain Iran-related persons on OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List) risk being sanctioned under U.S. sanctions authorities relating to Iran, unless an exception applies.
A high-level overview of these sanctions authorities follows. However, this overview is not intended to be a comprehensive summary of all U.S. sanctions authorities related to Syria and Iran. More information on the Syria and Iran sanctions programs can be found on Treasury’s website. Please note this section is current as of the date of this advisory. The most up-to-date information can be found on Treasury’s website and the hyperlinks listed in the footnotes below.
Syria
The U.S. government will aggressively target for designation any person who provides support to the regime, for example by facilitating exports to or imports from the Government of Syria, including government-owned entities, unless such exportation or importation is otherwise exempt or authorized. [2]
The United States also prohibits, among other things, transactions subject to U.S. jurisdiction that, directly or indirectly, involve the Government of Syria, or entities sanctioned under the Syria Sanctions Regulations (see, e.g., Executive Order 13582, “Blocking Property of the Government of Syria and Prohibiting Certain Transactions With Respect toSyria” and the Syrian Sanctions Regulations, 31 C.F.R. Part 542 (SSR) ).
Iran
The United States is committed to enforcing sanctions against those who engage in prohibited transactions under the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR) , and will continue to aggressively target those involved in sanctionable activities under other Iran-related sanctions authorities in support of the Iranian regime’s malign activities. Pursuant to U.S. sanctions authorities, non-U.S. persons—including foreign financial institutions—may be subject to sanctions for knowingly conducting significant transactions for, or knowingly providing significant support to, certain Iran-related persons on OFAC’s SDN List, including the National Iranian Oil Company, the National Iranian Tanker Company, and the Islamic Republic of Iran Shipping Lines, unless an exception applies. Further, non-U.S. persons that knowingly own, operate, control, or insure a vessel that transports crude oil from Iran to Syria or other countries that have not received a significant reduction exception pursuant to section 1245 of the National Defense Authorization Act for Fiscal Year 2012 could be subject to secondary sanctions under the Iran Sanctions Act. Even when a significant reduction exception applies, the involvement of the IRGC or any other person designated in connection with Iran’s support for international terrorism or its proliferation of weapons of mass destruction or their means of delivery is outside the scope of the significant reduction exception and the conduct could be subject to U.S. sanctions.
OFAC administers and enforces a comprehensive trade embargo against Iran as set forth in the ITSR and Executive Orders issued under the authority of the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, and other statutes. The ITSR prohibits most direct and indirect transactions with Iran by U.S. persons or within the United States, unless authorized by OFAC or exempted by statute. [3] Further, absent an applicable exemption or OFAC authorization, foreign persons, including foreign financial institutions, are prohibited from processing transactions to or through the United States in violation of these prohibitions, including transactions through U.S. correspondent accounts for or on behalf of Iranian financial institutions, other persons located in Iran, or where the benefit of those services is otherwise received in Iran.
Deceptive Shipping Practices
As the global community increases its pressure on the Government of Syria, persons in the petroleum shipping industry continue to deploy deceptive practices by obfuscating the destination and recipient of oil shipments in the Mediterranean Sea ultimately destined for Syria.
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