OFAC Warns Against Using IRISL Vessels

On July 19, 2012, the Office of Foreign Assets Control ("OFAC") issued an advisory stating that Iran Islamic Republic of Iran Shipping Lines ("IRISL") is currently operating unregistered vessels. OFAC advises all persons in the maritime industry that any assistance provided to IRISL in connection with the re-flagging of its vessels may constitute a provision of services in violation of U.S. sanctions. Such a violation may result in the assisting person being added to OFAC's Specially Designated Nationals ("SDN") list for having assisted another designated person or entity.

Background

On June 9, 2010, enhanced U.N. sanctions were adopted by the U.N. Security Council, which froze the assets of various designated persons, including certain entities deemed to be owned, controlled by, or acting on behalf of IRISL. Due to these international sanctions, many of IRISL's vessels have either had their flags revoked or registration rejected by vessel registries. OFAC noted that it is likely that persons will encounter such unregistered or improperly flagged vessels more frequently as jurisdictions continue to refuse to flag IRISL's vessels.

As expected, the sanctions are taking its toll both on Iran (the intended target) and the international shipping community. Blocked funds, rejected U.S. dollar transactions, contractual conundrums, and uncertainty have made navigating an already complex regulatory environment even more difficult. It goes without saying that those who wish to continue pursuing lawful business opportunities with Iran or Iranian entities must establish...