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16°c Portland ME, US

Restrictions & Sanctions

US sanctions against Sudan (USA)

On January 13, 2017 EO 13761 lifted the US sanctions against Sudan for 6 months, with the potential for a revocation of those sanctions on July 12, 2017. After a further  6 months extension, the sanctions are now being revoked, effective October 12, 2017

The revocation applies to Sections 1 and 2 EO 13067 of November 3,1997 to all of EO 13412 of October 13, 2006. Sections 1 and 2 of EO 13067 blocked all property of Government of Sudan in the US and banned the importation of any goods or services from Sudan to the US as well as the exportation of any goods or services from the US to Sudan. In addition, US people were prohibited from facilitating or brokering the exportation of goods or services to Sudan from any location from financing certain projects in Sudan from extending loans or credit to the Government of Sudan or from transporting any cargo to or from Sudan. EO 13412 prohibited US people from engaging in all transactions relating to the petroleum or petrochemical industries in Sudan. All of these prohibitions have now been revoked and US people are free to engage in all transactions with Sudan.

Despite the revocation of sanctions against Sudan that country remains on the State Sponsors of Terrorism List (“SSI List”). As a result, under the Trade Sanctions Reform and Export Enhancement Act of 2000 the export and reexport to Sudan of certain agricultural commodities, medicine and medical devices still require an OFAC license. To address legislative requirement, OAFC has issued General License A which authorizes said shipments without the need to obtain specific licenses.

 

US sanctions against the Democratic People's Republic of Korea (USA)

The Democratic People's Republic of Korea is listed as a "non-entrant country". Hence, Democratic People's Republic of Korean vessels are not permitted to enter US ports, internal waters, or territorial seas except when engaged in innocent passage, under the conditions of force majeure, or distress situations involving a medical emergency.

OFAC regulations, authorised under the Trading with the Enemy Act, established economic sanctions against the Democratic People's Republic of Korea in 1950. They have since been modified on several occasions.

The Department of the Treasury, along with the Departments of State and the U.S. Coast Guard, is issuing a sanctions advisory on North Korea.

 

US sanctions against Iran (USA)

Iran is listed as a "non-entrant country". Hence, Iranian vessels are not permitted to enter US ports, internal waters, or territorial seas except when engaged in innocent passage, under the conditions of force majeure, or distress situations involving a medical emergency.

US persons and companies (including foreign subsidiaries) are prohibited from transacting business with Iran, either directly or indirectly, with certain exceptions.

On 5 August 1996, the US President signed the "Iran and Libya Sanctions Act of 1996" which unilaterally imposes secondary sanctions against non US nationals/companies investing USD 40,000,000 or more in Iran during a 12 month period.

On 1 July 2010, the US President signed the "Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010" (CISADA) and Executive Order No. 13590 issued 21 November 2011 which enhanced economic sanctions relating to Irans refined petroleum products industry. Additional measures were introduced under Executive Order No. 13590 issued 21 November 2011 and Executive Order issued 31 July 2012.

On 10 August 2012, the US President signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012. This amends the Iran Sanctions Act of 1996 and Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) by adding additional sanctions.

On 10 October 2012, the US President signed a new Executive Order “Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Threat Reduction and Syria Human Rights Act of 2012 and Additional Sanctions with Respect to Iran” which prohibits foreign subsidiaries of U.S. persons from knowingly violating the Iranian Transactions Regulations.

On 2 January 2013, the US President signed into law the "National Defense Authorization Act for Fiscal Year 2013" which includes the "Iran Freedom and Counter-Proliferation Act of 2012" (IFCPA) under Sections 1241 to 1255, further expanding US sanctions against Iran. Whilst a few of the new sanctions took immediate effect, most will become effective 180 days after the date of enactment (i.e. 1 July 2013).

On 24 November 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia, and China) reached an initial understanding with Iran, outlined in a Joint Plan of Action (JPOA). In return for Iran’s commitment to place meaningful limits on its nuclear program, the P5+1 committed to provide Iran with limited, targeted, and reversible sanctions relief for a six-month period.

On 12 January 2014, the P5+1 and Iran arrived at technical understandings for the Joint Plan of Action (JPOA), which will be implemented beginning on 20 January 2014 and ending 20 July 2014 (JPOA Period).  The relief provided in the JPOA only pertained to conduct and transactions fully completed during the JPOA Period, and, with limited exceptions, involved only certain sanctions on non-U.S. persons not otherwise subject the Iranian Transactions and Sanctions Regulations. The exemption were extended several times.

On 16 January 2016 the Joint Comprehensive Plan of Action (JCPOA) was implemented and the United States lifted its nuclear related sanction as described in the JCPOA. In connection with the lifting OFAC issued the following: 

US withdrawal from the Joint Comprehensive Plan of Action (JCPOA)
On 8 May 2018 the President announced the decision to cease the US participation in the JCPOA.  The US withdrawal from the JCPOA, and its decision to reactivate the nuclear related laws that were waived in order to implement the JCPOA, will have significant complications for maritime trade with Iran and companies engaged in this.

On 6 August 2018 the President issued Executive Order 13846 which re-imposes secondary sanctions that had been suspended pursuant to the JCPOA. A previously established wind-down period will remain in effect until 4 November 2018 for some categories of transactions which include those relating to shipping, shipbuilding and port sectors of Iran.

It would appear that these sanctions will be relevant not only to entities directly dealing with public and private sector entities in Iran but also third parties who deal with both US and Iranian entities.

Companies based in EU would, however, also need to consider the effects of the EU Blocking Regulation. The EU's updated Blocking Statute which entered into force on 7 August 2018 is intended to protect EU persons and entities from the effects of US secondary sanctions.

In effect the companies must comply with either EU law or the US imposed sanctions on Iran making it a very difficult and highly complex situation.  It is, however, possible for companies to apply for an exemption from compliance with the EU blocking regulation.

Despite the blocking regulation, it seems EU operators may still face the ultimate US penalties, that is, a blocking of the operator’s property in the US and loss of access to the US financial system. It consequently remains to be seen to which extent the Blocking Statute will counteract the US secondary sanctions.

While there are many uncertainties related to the sanctions, it is clear that members already conducting, or considering to conduct, business involving Iranian entities or interests must seek input from legal professionals with expertise in the US sanctions programme. If members are based in the EU the input is also needed from specialists in the EU Blocking Regulation.

The P&I Clubs have issued circulars particularly dealing with this topic and more information can also be found on OFAC’s website.

Aside from the reactivated nuclear related laws, the main sanction items of interest are:

Specially Designated Nationals List (SDN List)
The sanctions involve designated entities, referred to as Specially Designated Nationals or SDNs, which list companies and individuals located not just in Iran, but anywhere in the world. The list also includes the names of vessels which have been determined to be owned or controlled by designated entities and numerous banks/financial institutions involved with designated entities.

As companies, individuals, vessels and financial institutions may not appear to be related to the Iranian sanctions, having innocuous names and may be located in countries with which one enjoys harmonious trade relations, it is vitally important to carefully screen all parties involved (i.e. shippers, receivers, charterers, owners, brokers, banks, vessel, port/terminal operator, etc...) to ensure that no designated entity is directly or indirectly involved.

Arms and strategic goods and services embargo
Ban on Arms exports to Iran.
Restrictions on exports to Iran of "Duel Use Items".

Iran Threat Reduction and Syria Human Rights Act of 2012, Sec. 203 will apply sanctions on a person that on or after the date of the enactment of theAct, exported, transferred, permitted or otherwise facilitated the transshipment of, any goods, services, technology, or other items to any other person; and knew or should have known that this would contribute materially to the ability of Iran to acquire or develop chemical, biological, or nuclear weapons or related technologies; or acquire or develop destabilizing numbers and types of advanced conventional weapons.

Iran Threat Reduction and Syria Human Rights Act of 2012, Sec. 211 provides that if the President determines that a person, on or after the date of the enactment of this Act, knowingly sells, leases, or provides a vessel or provides insurance or reinsurance or any other shipping service for the transportation to or from Iran of goods that could materially contribute to the activities of the Government of Iran with respect to the proliferation of weapons of mass destruction or support for acts of international terrorism, the President shall block and prohibit all transactions in all property and interests in property ... if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person.

Iron, steel, aluminum, and copper
On 8 May 2019, the President of the United States issued a new Executive Order (E.O.), imposing sanctions with respect to the iron, steel, aluminum, and copper sectors of Iran. The relevant FAQ can be viewed here.

Banking/Financial 
CISADA includes mandatory banking sanctions targeted at foreign banks that knowingly facilitate: Iranian WMD transactions; transactions related to Iran's support for terrorism; the activities of persons sanctioned under Iran related United Nations Security Council Resolutions; significant transactions with the IRGC (Iran's Revolutionary Guard) or its affiliates; or significant transactions with Iranian linked banks designated by the United States.

Freezing of Assets
Includes the freezing of US based property/assets of the Islamic Republic of Iran Shipping Lines (IRISL) and affiliated entities.

Travel restrictions
Travel ban on named persons

Further information:

 

US sanctions against Iraq (USA)

Trading restrictions are administered and enforced by the OFAC. On 13 September 2010, OFAC removed the Iraqi Sanctions Regulations, 31 C.F.R. Part 575, from 31 C.F.R. chapter V, and added the Iraq Stabilization and Insurgency Sanctions Regulations ("ISISR") as new part 576 to 31 C.F.R. chapter V. The ISISR implement Executive Order 13303 of 22 May 2003, Executive Order 13315 of 28 August 2003, Executive Order 13350 of 29 July 2004, Executive Order 13364 of 29 November 2004, and Executive Order 13438 of 17 July 2007.

 

Terminated US sanctions (USA)

 

  • Myanmar sanctions ended as of 7 October 2016
  • Ivory Coast sanctions ended as of 14 September 2016.