Prosecutors in the US are reported to be moving forwards with their investigation into alleged sanctions violations committed by Deutsche Boerse AG and its Luxembourg-based subsidiary Clearstream Banking SA. Clearstream is alleged to have acted as an intermediary between Iran’s Central Bank and JPMorgan by receiving interest payments and redemptions into its JPMorgan account on $1.67bn of bonds held on behalf of an Italian bank that was acting as a front for Iran’s Central Bank. There is no indication that JPMorgan knew the accounts were linked to Iran.
The prosecutors are said to be considering whether to charge Clearstream with violating US sanctions and making false statements to US regulators. If they find that Clearstream’s management knowingly withheld information, they may bring charges against individuals.
The General Court of the EU has rejected another challenge to the re-listing of entities after they have won their annulments challenging their initial listing on the EU’s Iran sanctions; Islamic Republic of Iran Shipping Lines v Council (link to the judgment is here). The Court has held that the Council was entitled not only to re-list IRISL and some companies said to be connected with it, but that it could introduce new listing criteria that expressly target IRISL-connected companies after IRISL’s designation had been annulled (on which see previous blog). The judgment contains interesting comments on the probative value of witness evidence and the credibility and source of evidence. Maya Lester QC acted for the applicants.
Amazon has announced that it may have violated US sanctions on Iran by processing and delivering orders of consumer products to sanctioned people and entities located outside Iran. Amazon voluntarily reported the possible violations, and has said that it will cooperate with an investigation by US regulators. It has also said it will enhance its processes designated to identify transactions associated with people designated under the Iran Threat Reduction and Syria Human Rights Act 2012.
OFAC has issued a Finding of Violation to B Whale Corporation (BWC), a shipping company based in Taiwan and member of the TMT Group of Shipping Companies, for violating US sanctions on Iran. The violation occurred when BWC’s vessel, the M/V B Whale, transferred 2,086,486 barrels of crude oil from a vessel owned by the National Iranian Tanker Company, which is identified on OFAC’s SDN List. OFAC’s enforcement notice is here.
The transaction took place while BWC was involved in bankruptcy proceedings in the US. OFAC determined that BWC was a US person within the scope of its sanctions on Iran because it was present in the US for those proceedings when the transaction occurred. In addition, the vessel B Whale was subject to US sanctions because it was property under the jurisdiction of a US court, and therefore the transfer of oil constituted an import from Iran to the US.
OFAC’s found BWC’s conduct to have been aggravated by its reckless disregard for US sanctions, attempts to conceal the transfer, and the significant benefit provided by the transaction to Iran, but mitigated by its clean sanctions record and the fact that all of its assets had been liquidated in bankruptcy.
The US Treasury department today added 13 people and 12 companies to its sanctions list, freezing their assets under US control. The White House spokesman, said the sanctions were a “very, very strong stand against the actions Iran has taken”; Iran tested a ballistic missile a few days ago. The new listings are here. Among those sanctioned are those the US Treasury says support a trade network run by Iranian businessman Abdollah Asgharzadeh who is said to support Shahid Hemmat Industrial Group, a subsidiary of an Iranian entity said to run Iran’s ballistic missile programme, and a Lebanon-based network run by the Islamic Revolutionary Guard.
A few hours before they were announced, President Trump tweeted: “Iran is playing with fire. They don’t appreciate how ‘kind’ President Obama was to them. Not me!” Iran’s foreign ministry, in a statement on Friday, said the US sanctions were “illegal” and “illegitimate” and said Iran would consider imposing restrictions on American entities and individuals who “have created and helped terrorist groups . . . and killings and suppression of defenseless civilians” in the Middle East.
Following a review of its nuclear sanctions on Iran and several judgments of the General Court and the Court of Justice annulling listings on those measures, the EU has confirmed that a number of entities no longer appear on the EU’s sanctions lists (see previous blogs here and here). They are:
- Moallem Insurance Company
- Petropars Operation & Management Company
- Petropars Resources Engineering Ltd
- Iran Aluminium Company
- Iran Liquefied Natural Gas Co.
- Hasseatic Trade Trust & Shipping (HTTS) GmbH
- Naser Bateni
- North Drilling Company
- Good Luck Shipping Company LLC
In addition, the EU has confirmed that it has deleted from its sanctions lists the following entities:
- Bank Saderat PLC (London) (see previous blogs on the EU deletion of Bank Saderat Iran)
- Neka Novin
- West Sun Trade GMBH
- Oil Industry Pension Fund Investment Company (OPIC)
See Regulation (EU) 2017/77 implementing Regulation 267/2012 and Decision 2017/83 amending Decision 2010/413/CFSP. HM Treasury’s notice is here.
OFAC has announced two settlement agreements relating to violations of US sanctions on Iran and Cuba.
Aban Offshore Limited
Aban has agreed to pay $17,500 for violating US sanctions on Iran in 2008 when its Singapore subsidiary ordered oil rig supplies from the US, with the intention of re-exporting them from the UAE to a rig in Iranian territorial waters. OFAC determined that Aban did not voluntarily self-disclose the violation, but that it constituted a non-egregious case. In mitigation, OFAC also noted that Aban displayed substantial cooperation with OFAC’s investigation, including by conducting its own internal investigation into potential prior violations of sanctions. OFAC’s enforcement notice is here.
An individual & Alliance for Responsible Cuba Policy Foundation
OFAC has issued a $10,000 fine to an individual acting in his personal capacity and Alliance, on whose behalf the individual also acted. They are said to have violated US sanctions on Cuba by engaging in unauthorised travel-related transactions during business travel to Cuba in 2010 and 2011. Although OFAC found the individual’s conduct to have been wilful, it noted that the violations appeared to cause minimal harm to US sanctions objectives. OFAC’s enforcement notice is here.
At the end of last year, UK jet-engine manufacturer Rolls Royce defended itself against allegations that it had exploited a “loophole” in US sanctions to sell industrial turbines and related products to Iran between 1975 and 1995, by conducting the business through a UK division with no US management. In a statement, Rolls Royce acknowledged that it did business with Iran, but said that it complied with all relevant sanctions and export controls.