U.S. State Department Imposes More CISADA Sanctions

The U.S. State Department last week announced a new round of sanctions on entities allegedly aiding Iran’s energy sector.  The announcement on May 26 subjected the following seven entities to sanctions under the Iran Sanctions Act (ISA), as amended by the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (“CISADA”)

  1. Associate Shipbroking (Monac0)
  2. Ofer Brothers Group (Israel)
  3. Petroleos de Venezuela (PDVSA) (Venezuela)
  4. Petrochemical Company International (Jersey)
  5. Royal Oyster Group (UAE)
  6. Speedy Ship (aka Sepahan International Oil Company) (UAE)
  7. Tanker Pacific (Singapore)
Among the more interesting entities are Petroleos de Venezuela (PDVSA), which is Venezuela’s state oil company (and owner of the Citgo gas station chain in the United States) and Ofer Brothers Group, an Israeli concern that has allegedly done other trade with Iran in recent years as well.
The companies named in the directive are for violations of provisions in the ISA prohibiting assistance to Iran’s energy sector beyond certain thresholds, including the sale of refined petroleum.   Some have been accused of hiding their transactions with Iran in an attempt to evade sanctions.
This current round of sanctions is surely to cause concern for many middle tier and smaller companies as it shows that the United States is not simply targeting the major oil giants, a number of which avoided any sanctioning under the ISA by implementing the CISADA “Special Rule,” enabling them to forgo investigation in exchange for a vow to wrap up and business in Iran.  Again, the message sent by State is arguably that it is not just looking at the oil majors but other smaller entities as well.  This is particularly critical to those third country companies that have tried to profit from the recent withdrawal of major giants from Iran’s market.
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