US Executive Order Relating to Sanctions on Iranian Metals

May 08: US lawyer Bill Juska of Freehill Hogan & Mahar LLP has advised that on 8 May 2019, US President Trump issued a new Executive Order “Imposing Sanctions with Respect to the Iron, Steel, Aluminium, and Copper Sectors of Iran.” He reports as follows:

QUOTE

The Executive Order authorizes blocking sanctions on any person (not just a U.S. person) determined by the Secretary of the Treasury, in consultation with the Secretary of State:

1. To be operating in the iron, steel, aluminium, or copper sectors of Iran, or to be a person that owns, controls, or operates an entity that is part of the iron, steel, aluminium, or copper sector in Iran;

2. To have knowingly engaged, on or after the date of this order, in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminium, or copper sectors of Iran;

3. To have knowingly engaged, on or after the date of this order, in a significant transaction for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminium, aluminium products, steel, steel products, copper, or copper products from Iran;

4. To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of any person whose property and interests in property are blocked pursuant to this section; or

5. To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this section.

Under the Executive Order, vessel owners now risk having their property blocked should they “transfer” to or from Iran significant goods or services used in connection with the iron, steel, aluminium, or copper sectors of Iran. Such goods would no doubt include coking coal transported to Iran for use in steel plants. In addition, blocking sanctions can be imposed for the transfer from Iran of any products produced by the iron, steel, aluminium, or copper sectors of Iran. Typically, OFAC blocks a person’s property and interest in property by designating the person on the U.S. SDN List …

UNQUOTE

Mr Juska also indicates that whilst the Executive Order became effective immediately upon signing on 8 May 2019, according to US Treasury FAQs, persons engaged in sanctionable transactions under the Executive Order will have a 90-day period to wind down those transactions without exposure to sanctions under the Executive Order provided those transactions pre-dated 8 May 2019. However, the FAQs advise that entering into new business that would be sanctionable under the Executive Order after 8 May 2019 will not be considered wind-down activity and could be sanctioned even during the wind-down period.

Source: The London P&I Club

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