In the Irish Sea sits an island known as the Isle of Man. Over the last decade this island has been utilized by numerous entities and individuals seeking to skirt the sanctions against Iran administered by the United States Department of the Treasury Office of Foreign Assets Control (OFAC). However, in response to strict enforcement of sanctions by OFAC, the Isle of Man has worked to ensure that business and individuals on the island were not used to facilitate prohibited transactions involving Iran.
Recently, two OFAC officials visited the Isle of Man to ensure that trade sanctions imposed against the Islamic Republic of Iran Shipping Lines were being enforced. As part of their visit, the OFAC officials met officials from various Isle of Man governmental bodies, including Customs and Excise, Ship Registry, the Attorney General and the Financial Supervision Commission. OFAC also provided a presentation regarding its activities to Isle of Man government officials and politicians.
Although, the Isle of Man’s Chief Minister said he was pleased with the way the visit went, he had some reservations. The Chief Minister specifically stated, “We were disappointed that the United States took the actions it did and felt the US authorities had not been fully briefed on the Isle of Man’s involvement.” In essence, he felt that the sanctions had been imposed when the US authorities had not fully understood the Isle of Man’s position.
A few months ago when attempting to identify a foreign intermediary bank through which to process an OFAC authorized transaction, our office reached out to a number of banks on the Isle of Man which allowed for the opening of off shore accounts. When these banks were informed that the transactions were originating in Iran, we were turned down. Despite our repeated attempts to tell these banks that we had appropriate authorization from OFAC, the banks on the Isle of Man refused to process the transactions. The point of this story is that for those seeking to evade OFAC administered sanctions against Iran, the Isle of Man is no longer a base for such activities; the Isle of Man is fully OFAC compliant.
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 ferrari@ferrari-legal.com.
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