The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has placed sanctions on Shandong Shengxing Chemical Co., Ltd. This China-based independent refinery is noted for purchasing Iranian crude oil valued over a billion dollars. The transactions were reportedly conducted with Iran's Islamic Revolutionary Guard Corps-Qods Force front company. Additional sanctions were levied on various companies and vessels involved in transporting Iranian oil to China as part of what is termed the "shadow fleet."
Secretary of the Treasury Scott Bessent stated, “Any refinery, company, or broker that chooses to purchase Iranian oil or facilitate Iran’s oil trade places itself at serious risk.” Bessent emphasized the commitment of the United States to disrupt entities supporting Iran's oil supply chain.
This action aligns with Executive Order 13902, targeting Iran’s petroleum sector. It is OFAC’s second measure against a refinery purchasing Iranian crude and marks the sixth round of sanctions since the President issued National Security Presidential Memorandum 2, aiming to exert maximum economic pressure on Iran.
An updated sanctions advisory is also being released to guide the global shipping and maritime industry on avoiding sanctions evasion related to Iranian petroleum shipments.
Shandong Shengxing is reported to have received Iranian oil from vessels previously sanctioned for such activities. Between March 2020 and January 2023, it transferred over $800 million to China Oil and Petroleum Company Limited, aiding in the sale to China. This company reportedly laundered billions, with $108 million seized by the U.S. Justice Department.
The use of a shadow fleet by Iran, consisting of tankers managed through opaque ownership, is addressed as the RESTON, BESTLA, EGRET, and other vessels have transported significant quantities of Iranian oil to China, enriching the Iranian regime. OFAC's designations include Oceanic Orbit Incorporated, Pro Mission SDN BHD, among others.
OFAC identifies vessels like RESTON and RANI as blocked property, implicating organizations such as Oceanic Orbit Incorporated and Civic Capital Shipping Inc. as related entities.
Properties and interests in the U.S. connected to these sanctioned parties are blocked, and entities owned 50 percent or more by these parties are also blocked. Engaging with blocked persons without authorization may lead to civil or criminal penalties.
OFAC upholds its ability to remove entities from sanction lists to drive compliance, noting the sanctions are meant to encourage positive changes in behavior.
For further information on the designated entities and vessels, OFAC provided resources and guidance on the removal process from sanction lists.
