The U.S. Government has designated four (4) entities for placement on the Specially Designated Nationals (“SDN”) List administered by the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) pursuant to the Iran Sanctions Act of 1996 (“ISA”). These designations follow the ISA designations made by the Secretary of State earlier this week.

The recent ISA designations have been imposed against those entities believed to be working with and supporting Iran’s energy sector and contributing to the development of Iran’s petroleum resources. The entities in questions are:

1. Associated Shipbroking;
2. Royal Oyster Group;
3. Speedy Ship FZC; and
4. Petrochemical Commercial Company International Limited

Petrochemical Commercial Company International Limited was previously on the OFAC SDN List as an entity owned or controlled by the Government of Iran.

As result of these new ISA designations U.S. financial institutions can no longer provide credit to these entities in amounts totaling more than $10,000,000 over a twelve month period; there can be no transactions in foreign exchange under U.S. jurisdiction where these parties have an interest; there can be no transfer of credit or payments between financial institutions subject to U.S. jurisdiction where these entities have an interest; and no goods, services, or technology can be imported into the United States directly or indirectly through these entities. In short, the U.S. and the U.S. financial system will be almost completely closed to these entities.

The process for being placed on the OFAC SDN List can happen very quickly, while removal from that list can take quite a long time and be very complicated. There are procedures through which to challenge the designation, however, the burden is upon the party seeking removal and OFAC will generally not share the evidence used in making the designation determination with the party seeking removal. Moreover, seeing as how these designations came directly from the U.S. President and/or the U.S. Secretary of State, it will be even more problematic to have these ISA designations removed.

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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