The United States has announced new sanctions targeting 35 entities and vessels involved in transporting illicit Iranian petroleum to international markets. This move follows Iran's attack on Israel on October 1, 2024, and its recent nuclear activities. The U.S. aims to curb the financial resources that fuel Iran’s nuclear program and support regional terrorism.
Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith stated, "Iran continues to funnel revenues from its petroleum trade toward the development of its nuclear program, proliferation of its ballistic missile and unmanned aerial vehicle technology, and sponsorship of its regional terrorist proxies, risking further destabilizing the region." He emphasized the U.S.'s commitment to disrupting these illegal operations.
These sanctions are enacted under Executive Order 13902, allowing the Treasury Secretary to impose penalties on key sectors of Iran's economy in consultation with the Secretary of State. Previously, on October 11, 2024, sanctions were applied specifically to Iran’s petroleum and petrochemical sectors.
The Office of Foreign Assets Control (OFAC) has issued guidance for the maritime industry to identify patterns indicative of sanctions evasion and improve compliance practices.
Iran uses a network of tankers across various jurisdictions employing tactics like false documentation and altering vessel identities. Vessels such as JAYA (Marshall Islands-flagged), PHONIX (Guyana-flagged), BERTHA (Cook Islands-flagged), among others have been identified as part of this shadow fleet transporting millions of barrels of oil for Iran.
Several companies managing these vessels are being sanctioned: UAE-based Galileos Marine Services L.L.C., Panama-based Ocean Glory Giant OGG SA, Hong Kong-based Gaffodil Co., Limited, India-based Vision Ship Management LLP, Seychelles-registered Lufindo Holding Limited, Liberia-registered Constellation Maritime Services Limited, PRC-based Shanghai Legendary Ship Management Company Limited and Shanghai Future Ship Management Co Ltd., Cayman Islands-registered Eunomia Limited among others.
Smith explained that non-U.S. persons are also prohibited from causing or conspiring with U.S. persons to violate sanctions inadvertently or otherwise evade them. OFAC provides guidelines regarding enforcement actions against those violating these restrictions.
The aim is not only punitive but also intended to encourage behavioral change by potentially removing entities from sanction lists if they comply with regulations in future dealings.
