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Case No. IA-2017-340424-1
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Freehill Hogan & Mahar LLP
80 Pine Street
New York, NY 10005
Dear Mr. [ ]:
This is in response to your request dated February 20, 2017 (the “Application”) to the Office of Foreign Assets Control (OFAC) seeking guidance on behalf of your client, the North of England P&I Association Limited (“The North”), regarding certain claims-related transactions involving Iran. Specifically, The North insures [****], which was a non-U.S. person, whose non-U.S. vessel incurred a claim related to transportation of an Iranian-origin petroleum product between October and November 2016 (the “Claim”). Subsequently, on January 29, 2017, [****] filed a Voluntary Petition for Bankruptcy in the United States Bankruptcy Court for the Southern District of New York, in conjunction with bankruptcy proceedings involving related entities. Your client requests interpretive guidance regarding whether, by virtue of...
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1) Guidance letter represents an extremely expansive interpretation of the scope of 560.206(a) of the ITSR, and a narrow interpretation of the legal services GL (560.525) that U.S. law firms (including seasoned sanctions lawyers) could easily overlook. This is discussed further below, but first note that, consistent with Civil Enforcement Information (FOV) - B Whale Corporation, OFAC states categorically that where a entity is “registered in the Marshall Islands and would generally be considered a non-U.S. person for purposes of the ITSR, when a non-U.S. person files for bankruptcy in a U.S. court, that non-U.S. person becomes a U.S. person for the purposes of the ITSR.” Here, OFAC is taking the position that the entity in its entirety is a “U.S. person,” and this transformation takes...