This is an update in connection with our ongoing monitoring of the United States' promulgation and enforcement of sanctions regulations with respect to Iran.
On December 1st, Stuart Levy, the U.S. Treasury Department's Under Secretary for Terrorism and Financial Intelligence, addressed the House of Representatives Committee on Foreign Affairs. Mr. Levy discussed sanctions efforts by the U.S. and the international community and the success of those efforts in contributing to Iran's isolation. In particular, Mr. Levy addressed the United States' Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 ("CISADA"), legislation which applies to both U.S. and non-U.S. companies. Mr. Levy noted that CISADA's "quite powerful" financial provisions "force a stark choice: If you conduct certain business with Iran, you risk losing access to the U.S. financial system." Mr. Levy emphasized that the Government is actively investigating potential CISADA violations and has already contacted governments and financial institutions in more than a dozen countries to investigate conduct that could be sanctionable.
Mr. Levy stressed that there is no "silver bullet" and that a variety of sanctions measures must be imposed simultaneously against Iran to achieve the desired level of effectiveness. Mr. Levy's comments dovetail with the Treasury Department's November 30th action of adding the names of five corporate officers and ten businesses affiliated with either Bank Mellat or the Islamic Republic of Iran Shipping Lines ("IRISL") to the Specially Designated Nationals List (the "SDN List"). This action was taken pursuant to Executive Order 13382, which prescribes sanctions for proliferators of weapons of mass destruction and their supporters.
Both Bank Mellat and IRISL were previously designated by the Treasury Department for supporting Iran's weapons of mass destruction program and for carrying military cargoes. The following entities and individual connected to Bank Mellat were added to the SDN List on November 30th: (1) Pearl Energy Company, a Malaysian-based entity owned by a subsidiary of Bank Mellat; (2) Ali Afzali, the Director of Pearl Energy Company; and (3) Pearl Energy Services, a Switzerland-based entity that is owned or controlled by Pearl Energy Company.
In addition, in an effort to further target IRISL's international network, the Treasury Department designated the following several "front companies," each of which is a wholly-owned subsidiary of IRISL located in the Isle of Man, and each of which is the registered owner of a vessel previously identified on the SDN List as blocked property of IRISL or an IRISL-related company: Ashtead Shipping Company Limited, Byfleet Shipping Company Limited, Cobham Shipping Company Limited, Dorking Shipping Company Limited, Effingham Shipping Company Limited, Farnham Shipping Company Limited, Gomshall Shipping Company Limited, Horsham Shipping Company Limited. The Treasury Department also designated the following individuals affiliated with IRISL and related companies: Mohhammad Hossein Dajmar, Gholam Hossein Golparvar, Hassan Jalil Zadeh, and Mohammad Hadi Pajand.
The Treasury Department has stated that these designations "will help governments, banks and other private companies around the word ensure that they do not inadvertently facilitate Iran's proliferation and support for terrorism."
The United States' Iran sanctions program has serious consequences for both U.S. and non-U.S. businesses including energy, banking, shipping, insurance and others. If you have any questions or concerns about U.S. sanctions programs, please contact Bruce G. Paulsen
(212-574-1533) or Ellen Lafferty
(212-574-1266) at Seward & Kissel.