Secondary Sanctions Enforcement Announcement - Imposing Sanctions Related to the Islamic Republic of Iran Shipping Lines and Iranian Shipping Entities

Date issued: Jan. 15 2020

TURBOFAC Commentary (281 words)

Notes:

1) As was the case with the first of these designation notices (Secondary Sanctions Enforcement Announcement - Pamchel Trading (Beijing) Co., Ltd.), the sanctionable activities were clearly within the scope of the secondary sanctions provisions of the steel-related EO 13871 (in particular sections 1(a)(ii) and (iii). The practical difference being designated pursuant to EO 13871 and Section 1245(a)(1)(C)(i)(II) of IFCA is that the designated persons are not, themselves, made subject to secondary sanctions as a result of the IFCA designation.

While the designation notice is short on details as it relates to the volume and value of the materials transferred, the designation notice does break new legal ground insofar as it interprets section 1245(a)(1)(C)(i)(II) of IFCA as applying to “transfers” of covered materials to shipping companies that are Iranian persons on the SDN list. In other words, “transfer” for the purposes of section 1245(a)(1)(C)(i)(II) of IFCA includes “transfers” to intermediaries, as well as end users.

Query whether, as non-Iranian SDNs that are designated solely pursuant to section 1245 of IFCA, the "import exception" at paragraph (a)(2) of section 1245 of IFCA has a practical effect for the persons designated here. In general, all designations made pursuant to a statute that contains an "import exception" of persons that are also subject to sanctions prohibitions that prohibit imports. This is not the case with respect to persons designated here. see generally General Note on "Import Exceptions" in Certain Program-Specific Sanctions Statutes. In this case, some of the entities sanctioned are steel producers, so the exemption for "importations" may be of practical consequence.