In September, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) continued to tighten its sanctions on Iran and Venezuela, and addressed a sanctions-evading scheme for Syria involving several Russian entities.
- Iran: On September 20, 2019, OFAC announced that it was designating the Central Bank of Iran (CBI), the National Development Fund of Iran (NDF) and Etemad Tejarate Pars Co. for their ongoing support of the Islamic Revolutionary Guards Corps (IRGC), its Qods Force (IRGC-QF) and Hizballah. According to OFAC, the NDF, Iran’s sovereign wealth fund (whose board of trustees includes Iran’s president, oil minister and the governor of the CBI) has been a major source of foreign currency and funding for the IRGC-QF and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Etemad Tejarate Pars, an Iran-based company, has been designated by OFAC for concealing financial transfers for MODAFL’s military purchases, including funds originating from the NDF. The CBI has long been an entity of concern and has been designated for its continuing facilitation and transfer of, according to OFAC, “several billion of U.S. dollars and euros to the IRGC-QF and hundreds of millions to MODAFL from the NDF,” as well as for coordinating with the IRGC-QF to transfer funds to Hizballah. In announcing these designations, Sigal Mandelker, Treasury’s Under Secretary for Terrorism and Financial Intelligence, stated that “We are putting governments on notice that they are risking the integrity of their financial systems by continuing to work with the Iranian regime’s arm of terror finance, its Central Bank.”
- Venezuela: On September 24, 2019, OFAC announced that it was designating four entities that operate in the oil sector of the Venezuelan economy and four vessels that were determined to be engaged in the transport of oil and other petroleum products from Venezuela to Cuba. According to OFAC, Caroil Transport Marine Ltd., Trocana World, Inc., Tovase Development Corp. and Bluelane Overseas SA had worked to circumvent sanctions by receiving oil shipments from Venezuela, specifically Venezuela’s state-owned oil company Petroleos de Venezuela, S.A., and then transporting the oil to Cuba on their vessels.
- Russia: On September 26, 2019, OFAC announced that it was designating Maritime Assistance LLC, determined to be a front company supporting the already OFAC-designated Russian-company OJSC Sovfracht, for having materially assisted and provided support for, or goods or services in support of, the Syrian Company for Oil Transport. Maritime Assistance LLC participated in a sanctions evasion scheme by OJSC Sovfracht to facilitate the delivery of jet fuel to Russian forces operating in Syria, specifically by making payments on Sovfracht’s behalf to enable Sovfracht to continue fulfilling contracts after its designation. These transactions facilitated the sale and delivery of jet fuel in 2016 and 2017 to Banias, Syria, which was used by Russian military aircraft. In addition, OFAC designated three senior Sovfracht officials and identified five vessels as blocked property of Transpetrochart Co. Ltd., a Russian company designated by OFAC in December 2016 for providing material support to Sovfracht.
As a result of these actions, all property and interests in property of these entities and individuals – and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entities – that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. Because U.S. persons are generally prohibited from dealing with entities on the SDN List, persons who engage in certain transactions with these designated persons and entities may themselves be exposed to designation. OFAC has indicated that any foreign financial institution that knowingly facilitates a significant financial transaction for or provides significant financial services to these entities could be subject to U.S. correspondent account sanctions or payable-through account sanctions.