The U.S. Department of the Treasury’s Office of Foreign Assets Control, together with the U.S. Department of State and the U.S. Coast Guard, have issued an advisory to alert persons globally to the significant U.S. sanctions risks for parties involved in petroleum shipments to Syria. The advisory states that these shipments create significant sanctions risk for entities and individuals in the shipping industry, including insurers, shipping companies, financial institutions, and vessel owners, managers, and operators.
The advisory warns that insurers, shipping companies, financial institutions, and others involved in petroleum-related shipping transactions with the government of Syria may be subject to designation under one or more sanctions authorities. Similarly, individuals and entities knowingly engaged in certain transactions relating to petroleum and petroleum products from Iran or material support to the Central Bank of Iran or to certain other sanctioned Iran-related persons on OFAC’s list of Specially Designated Nationals and Blocked Persons risk exposure to designation or other sanctions under one or more Iran sanctions authorities.
The advisory states that as the global community increases its pressure on the Syrian regime, persons in the petroleum shipping industry continue to deploy deceptive practices by obfuscating the destination and recipient of oil shipments in the Mediterranean Sea ultimately destined for Syria. These practices may include falsifying cargo and vessel documents, carrying out ship to ship transfers in an effort to conceal the origin or destination of cargo, and disabling a vessel’s automatic identification system.
Risk mitigation measures discussed in the advisory include ensuring compliance consistent with Financial Action Task Force AML/CFT standards and conducting enhanced due diligence to defend against abuse by the Assad regime and enablers such as the Iran regime, monitoring for AIS manipulation, reviewing all applicable shipping documentation, ensuring clear communication with international partners, and leveraging available resources.
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