On October 26, 2020, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated additional Iranian individuals, entities and vessels to the Specifically Designated Nationals and Blocked Persons List (the “SDN” List) pursuant to Executive Order 13224 (as amended) (EO 13224), a counter-terrorism authority, for their support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), an entity designated under EO 13224. Among the designated entities are the Iranian Ministry of Petroleum, the National Iranian Oil Company (NIOC), the National Iranian Tanker Company (NITC), and several entities and individuals associated with these three parties, including front companies, subsidiaries, and senior executives. A list of the designated parties is available here and the press release is available here. US persons are prohibited from engaging in dealings with SDNs, and all property and interests in property of these SDNs that come within the United States or within the possession or control of a US person must be blocked (i.e., “frozen”). In addition, providing support to or otherwise dealing with these SDNs may result in the imposition of secondary sanctions against non-US persons.
Concurrent with these designations, OFAC issued an amended General License No. 8A (“GL 8A”) to replace General License No. 8 that adds NIOC to the scope of the general license. Our prior blog post on the issuance of GL 8 is available here. GL 8A authorizes US Persons and non-US entities owned or controlled by US Persons to engage in certain Iran-related humanitarian transactions involving the Central Bank of Iran (“CBI”), NIOC or any entity 50 percent or more owned by the NIOC, including transactions authorized under the Iranian Transactions and Sanctions Regulations to export/reexport agricultural commodities, medicines, or medical devices to Iran. OFAC has also updated Frequently Asked Questions relating to GL 8A (821, 822, 823, 825, 828, and 844). The addition of NIOC to GL 8A enables US and non-US persons to receive/process payments from Iran for the sale of humanitarian goods to Iran that may, directly or indirectly, involve NIOC. OFAC has not explained its reasoning for adding NIOC to the general license and NIOC’s possible role in humanitarian transactions. However, OFAC guidance issued in July 2013 noted that Iranian oil revenues held in CBI or non-designated Iranian bank accounts at foreign banks may be used to finance exports of humanitarian goods to Iran without triggering sanctions for the foreign bank. Accordingly, it would seem that NIOC may have been added to GL 8A to allow for the continued use of Iranian oil revenues held in foreign banks outside Iran as payment for the sale of humanitarian goods to Iran notwithstanding the designation of NIOC under EO 13224.
