New U.S. sanctions against Iran

On 8 May, U.S. President Donald Trump issued an Executive Order targeting the iron, steel, aluminium and copper sectors in Iran.

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, aluminum, or copper sectors of Iran, or to be a person that owns, controls, or operates an entity that is part of the iron, steel, aluminum, 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, aluminum, 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, aluminum, aluminum 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, aluminum, 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, aluminum, or copper sectors of Iran. There is a 90 day wind-down period to terminate any ongoing activities that are targeted by the new sanctions.

Members will appreciate the new U.S sanctions can apply to more or less any shipment of any type of goods to or from Iran. Members are therefore encouraged to exercise the highest level of due diligence if contemplating trading with Iran. To this end, the Club wish to stress that, leaving actual trading prohibitions aside, the Club will have significant problems to assist generally should an incident arise in relation to a call in Iran considering restrictions in the banking sector (see our Member Alert of 23 October 2018).

U.S. Executive Order Imposing sanctions with respect to the iron, steel, aluminium, and copper sectors of Iran » (8 May 2019)

Member Alert Iran sanctions have wide impact on payments » (23 October 2018)