Further restrictions on trading with Iran and Libya
28 June 2011
Last week, the US added Tidewater Middle East Co to its list of designated entities. Tidewater Middle East Co is a port operating company in Iran and is reportedly owned by sanctioned entities including Mehr Bank and the Iranian Revolutionary Guard. Tidewater Middle East Co is not connected with Tidewater Inc, a well know provider of off shore services.
According to the US Department of Treasury, Tidewater Middle East Co operates in the following ports:
- Bandar Abbas (Shahid Rajaee Container Terminal)
- Bandar Imman Khomeini Grain Terminal
- Bandar Anzali
- Khorramsar Port (one terminal)
- Assaluyeh Port
- Aprin Port
- Amir Abad Port Complex
Members who qualify as US nationals are directly bound by the new restrictions imposed by the US.
Furthermore, Members who do not qualify as US nationals, also appear to be affected by these developments since the entities who reportedly own Tidewater Middle East Co also appear on the EU list of sanctioned entities. Under the EU sanctions regime, Members subject to EU jurisdiction are prevented from providing funds or other economic resources to companies who are “controlled or owned” by sanctioned entities. Accordingly, Members subject to EU jurisdiction will in practice be unable to make payments to Tidewater Middle East Co.
It also follows that the Association is unlikely to be able to assist with the payment of claims or with the provision of security directly or indirectly for the benefit of Tidewater Middle East Co, for example in connection with damage to the port facilities owned by Tide Water Middle East Co.
Further details can be found at:
http://www.treasury.gov/press-center/press-releases/Pages/tgg.aspx
For the Association’s summary of developments regarding US and EU trade sanction legislation in general, click here.
Banking restrictions on payments connected with Iran
Our Circular of 2 March 2011 and News Alert of 30 March 2011 highlighted that the Association is unlikely to be able to assist with the payment of claims or the provision of security for the benefit of sanctioned entities (either directly or indirectly).
Members, however, should also be aware of the potential for practical difficulties involving the banking sector, when engaging in lawful trade with Iran. Many international banks have imposed restrictions on processing payments with Iran. This not only has an impact on the Members’ ability to make or receive payments linked with Iran for operational matters, but may also affect the ability of the Association to pay service providers in Iran, to assist with the provision of bank guarantees or to pay claims to lawful third parties connected with Iran without the prior agreement of the bank in question, which will be subject to the criteria applied by it at the time. In view of the wide and often vague criteria applied by some of the international banks, it can not be guaranteed that such prior agreement can be obtained in every instance or without delay.
Further EU measures against Libya
Members will already be aware of the sanctions regimes adopted by the US, EU and a number of other countries over the last months against the regime in Libya. The wide and often vague scope of the sanctions effectively means that if Members continue to be involved in transactions with Libyan entities or in trade involving Libya, they should check if the ownership or control of their counterparties is directly or indirectly connected with a sanctioned person or entity listed in the by US, EU and any other applicable country.
Members should also note that earlier this month, the EU has finalised measures intended to stop vessels calling in general at certain Libyan ports. The ports at this point of time are:
- Tripoli
- Al Khoms
- Brega
- Ras Lanuf
- Zawia
- Zuwara
Under the new measures, no funds or economic resources can be made available to the authorities of these ports. In practice this means that Members falling under the jurisdiction of the EU would be prohibited from paying port or other fees to these authorities. It also means that the Association would be unable to pay claims, for example following damage to the facilities in these ports.
EU members states can provide licenses to enable fulfilment of contractual obligations which were entered before 7 June 20011 but this excludes contracts relating to oil, gas and refined products. Furthermore, after 15 July, no licenses will be granted, even if the contractual obligations were entered before 7 June 2011. Humanitarian shipments remain permissible provided a prior license is obtained from the relevant authorities.
Further details regarding the EU sanctions regime can be found at:
http://www.hm-treasury.gov.uk/fin_sanctions_libya.htm
The list of ports and sanctions are subject to change and vary according to the jurisdictions to which Members are subject. Members are advised to obtain up to date information from their relevant national administrations in case they still intend to trade in Libya