As turmoil continues throughout the Middle East, the United States Department of the Treasury Office of Foreign Assets Control (OFAC) has continued its campaign to designate vessels belonging to the Islamic Republic of Iran Shipping Lines (IRISL). These latest designations target four vessels belonging to IRISL: Iran Darya, Nardis, Parmis, and Patris. As a result of their alleged participation in Iran’s proliferation of weapons of mass destruction efforts, these entities have all been designated under the Weapons of Mass Destruction Sanctions Regulations. As a result of their designations, the vessels will be essentially cut off from the U.S. financial system. In other words, no U.S. persons can engage in any type of transaction whatsoever with these vessels. Moreover, those transactions relating to these vessels that may be routed through a U.S. bank will be frozen by that bank and such funds will only be released upon issuance of a specific license by OFAC.
From all accounts the sanctions imposed against IRISL over the last few years seem to be having an impact. There have been a number of reports that foreign nations as the result of both U.S. and E.U. sanctions have opted to oust IRISL from their shores. In addition, a number of foreign companies who have continued to conduct business with IRISL have found their transactions blocked by U.S. banks and the funds related to those transactions frozen.
Despite this impact, IRISL is alleged to be continuously engaged in deceptive schemes to counter the impact of these sanctions. Such schemes include the renaming of vessels, the falsification of shipping documents, and the transferring of ownership of the vessels to front companies outside of Iran. Regardless of the continuing cat and mouse game being played by OFAC and IRISL, OFAC from all appearances appears to be dedicated to aggressively sanctioning IRISL and enforcing those sanctions.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or firstname.lastname@example.org.