Sanctions Imposed Beyond US and EU
SUMMARY AS AT 20 APRIL 2011 OF SANCTIONS IMPOSED BY VARIOUS NATIONS OTHER THAN THE EU AND US
AUSTRALIA - SEPTEMBER 2010
Australia has fully implemented UN Resolution 1929 (dated 9th June 2010) as well as it's own autonomous sanctions.
On 3rd September 2010, Australia announced new measures under which a further 98 entities and 12 individuals are designated for the purposes of financial and travel restrictions.
These designations target those in Iran's financial and transport sectors, entities involved in Iran's nuclear and missile programs and those connected to Iran's Islamic Revolutionary Guard Corps.
Included are: 26 subsidiaries and affiliates of the Islamic Republic of Iran Shipping Line, and 17 subsidiaries of Bank Melli.
The newest measures also include a trade ban on all arms and related material and all dual-use items for nuclear, missile, chemical and biological weapons development, and are similar to those recently adopted by the European Union.
CANADA - JULY 2010
Canada has implemented UN Resolution 1929, and imposes additional sanctions on Iran under the Special Economic Measures Act (SEMA).The additional autonomous sanctions prohibit all of the following:
- dealing in the property of designated persons;
- exporting or otherwise providing to Iran arms and related material not already banned, items used in refining oil and gas and items that could contribute to Iran’s proliferation activities;
- providing or acquiring financial services to allow an Iranian financial institution (or a branch, subsidiary or office) to be established in Canada, or vice versa;
- making any new investment in the Iranian oil and gas sector;
- establishing correspondent banking relationships with Iranian financial institutions, or purchasing any debt from the government of Iran; and
- providing a vessel owned or controlled by, or operating on behalf of the Islamic Republic of Iran Shipping Lines (IRISL) with services for the vessel’s operation or maintenance.
Under SEMA the Minister of Foreign Affairs can issue to any person in Canada or any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, that is restricted or prohibited pursuant to the Regulations.
HONG KONG - MARCH 2011
Hong Kong has passed into law regulations that implement the sanctions measures against Iran that were passed by UN Resolution 1929 on 9th June 2010.
UN Resolution 1929 imposes measures designed to counter Iran’s alleged nuclear proliferation activities.
These measures are set out in detail in the article entitled “Iran - United Nations Security Council Resolution 1929 (2010)” in the sanctions area of the Clubs website.
The new regulation in Hong Kong, United Nations Sanctions (Iran) Amendment Regulation 2011, came into law on 25th March 2011.
The Hong Kong prohibitions largely follow those set out in the UN resolution, and are set out in Part 2 of the Regulation. These include:
Section 2 - A ban on the direct or indirect supply, sale or transfer of prohibited items, the scope of which mirrors those set out in the UN Security Council Lists S/2006/814 and S2006/815, which in turn are applied in UN Resolution 1929. This particular prohibition applies to all persons in the HKSAR, persons elsewhere who are both HK permanent residents and Chinese nationals, and all bodies incorporated or constituted under the law of the HKSAR.
Section 3 - A ban on the direct or indirect carriage to/from Iran, to/from persons connected with Iran, to destinations for the purpose of delivery directly or indirectly to Iran, or for the use in or benefit of Iran, of prohibited items. This prohibition applies to ships registered in the HKSAR, ships not registered in the HKSAR but which are within the waters of Hong Kong, and ships that are chartered to any person in the HKSAR, persons elsewhere who are both HK permanent residents and Chinese nationals, and all bodies incorporated or constituted under the law of the HKSAR. It applies to charterers of ships not registered in the HKSAR if the charterers are in the HKSAR, or are both HK permanent residents and Chinese nationals or are entities incorporated or constituted under the laws of HKSAR.
Sections 4 & 5 – A ban on the direct or indirect procurement from Iran, or persons connected with Iran, of prohibited items. Those prohibited items mirror those set out in the UN lists as described in the comments on Section 2 above. This ban applies to all ships registered in the HKSAR, ships not registered in HKSAR but which are within the waters of Hong Kong, and any other ships that are chartered to any person in the HKSAR, persons elsewhere who are both HK permanent residents and Chinese nationals, and all bodies incorporated or constituted under the law of the HKSAR. Again, this prohibition applies also to charterers of ships not registered in the HKSAR if the charterers are in the HKSAR, or are both HK permanent residents and Chinese nationals or are entities incorporated or constituted under the laws of HKSAR.
Section 6 – A ban on the transfer of technology or assistance related to ballistic missiles.
Section 7 – A ban on making funds or economic resources available to relevant Iranian entities and persons.
Section 8 – A ban on the provision of “certain services to certain ships”. Section 8C (4) sets out what the “specific services” are. These include the provision of bunkers, tools, equipment, lubricants, chemicals, spare parts and other necessaries for the maintenance and safe operation of the ship. This ban does not extend to the provision of company registration and management services, which is relevant to how the prohibitions might impact on the Islamic Republic of Iran Shipping Lines (“IRISL”).
Part 3 of the Regulation sets out a number of limited circumstances under which a licence may be granted in derogation from the prohibitions.
Part 5 sets out powers available to HK officials to board and inspect ships and to compel the charterer, operator and master of ships that fall within the ambit of sections 3 and 5 to provide information relating to the ship and its cargo. Officials may direct the charterer, operator and master of any such ship not to proceed with its voyage and/or to direct that the ship be taken to a place specified by the officials. If such directions are not complied with, then the charterer, operator or master may face fines and/or imprisonment.
It is understood that at present nineteen Hong Kong companies operate as nominal owners of ships owned by IRISL. Given that the regulations apply to entities incorporated or constituted under the law of HKSAR, it now remains to be seen whether these nineteen companies can continue to act in their current capacity. If the current ownership and management arrangements for these ships are deemed to fall foul of the regulations, it is likely that IRISL may be forced to re-register ownership of their vessels elsewhere.
Further updates will be posted on the Clubs website as and when the situation develops.
We would like to express our thanks to Rosita Lau, Partner of Ince & Co. Hong Kong, for her help with the preparation of this piece.
[email protected]
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Ince & Co
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ICBC Tower, Citibank Plaza3 Garden Road, Central, Hong Kong
JAPAN - SEPTEMBER 2010
On 3rd September 2010 Japan's cabinet approved new sanctions against Iran, including an assets freeze on figures linked to its nuclear programme and tighter restrictions on financial transactions.
Japan has already adopted measures in line with the 1929 UN Resolution.
The new sanctions include a freeze on the assets of more than 100 groups and individuals linked to Iran's nuclear programme. The new package of sanctions also bar Japanese financial institutions from buying bonds issued by Iran's central bank.
Washington has urged Tokyo to help raise the pressure on Tehran, despite Iran being a major oil supplier to Japan. Japan has said it would suspend any new oil and gas investments in Iran, but there are no plans to restrict imports of crude oil from Iran.
Japan will also bar the individuals on the expanded blacklist of people and groups, which includes the powerful Islamic Revolutionary Guard, from entering the country.
The new sanctions also bar Japanese financial institutions from dealing in equities and bonds that could be linked to the development of nuclear and other weapons of mass destruction, including bonds issued by Iran's central bank.
In addition, the government-linked Nippon Export and Investment Insurance agency will also stop new medium and long-term trade insurance policies that protect Japanese exporters to Iran against possible losses.
NORWAY - JANUARY 2011
In a press release issued on 14th January 2011, the Norwegian Ministry of Foreign Affairs announced that Norway has adopted more stringent sanctions measures against Iran. These new measures reflect those that were adopted by EU countries and which are set out in
EU Regulation 961/2010
The effect of the new sanctions is that natural and legal persons, entities and bodies that are subject to the laws of Norway, will be subject to a more stringent ban on trade in a number of categories of goods, and a ban on export of key equipment, technology and associated services to the Iranian oil and gas sector. There is also a freeze on funds and economic resources for the direct or indirect benefit of Iranian entities, and the list of persons and entities subject to asset freeze has also been considerably widened.
Violation of the new measures is punishable by fines and/or imprisonment.
The new measures came into effect in Norway on 18th January 2011.
Further details of the new regulations may be found on the website of the Norwegian Ministry of Foreign Affairs
SOUTH KOREA - SEPTEMBER 2010
On 2nd September 2010 South Korea announced that it would impose a "heavy penalty" (likely to be a 2 month suspension on activity with South Korean companies) on Bank Mellat. In explaining the reason for the penalty on Bank Mellat, the South Korean government said that it was doing so over improper foreign exchange transactions rather than in conjunction with international sanctions on Iran’s nuclear programme.
In a separate move, the South Korean government has put all financial transactions with Tehran under strict government supervision as part of an expanded sanctions programme. The package of sanctions also includes the blackballing of 102 Iranian entities including 14 other banks and 24 individuals, and the strengthening of inspection of cargoes related to Iran.
The measures do not ban oil imports from Iran, as Iran is one of Seoul’s top oil suppliers. South Korea’s reluctance to impose stricter sanctions against Iran has been a source of political embarrassment as Seoul is seeking greater international co-ordination of sanctions against North Korea.
Seoul will also reportedly reduce trade financing between the two countries and Iranian banks will not be able to set up new branches in South Korea. The sanctions prohibit fresh investment from South Korean companies in Iran’s oil and gas sector. GS Engineering and Construction pulled out of a $1.2bn gas project in Iran in July.
SWITZERLAND - AUGUST 2010
The Swiss government implemented measures taking effect on 19th August 2010 to ban the exportation of heavy war material to Iran, and the financing of such equipment.
The assets and economic resources of 40 Iranian businesses and entities have been frozen, as well as those of one person. Currently SFr1.5 million ($1.4 million) has been frozen as a result of the sanctions against Iran.
Aside from these measures the Swiss government has attempted to adopt a neutral approach to Iran. In Feb 2009 the Swiss energy company EGL signed a gas supply contract with National Iranian Gas Export Company (NIGEC), a subsidiary of the National Iranian Gas Company, which is a designated company under UN sanctions measures. This contract remains in place, irking the US government, which has reportedly demanded that the Swiss government adopts a stricter sanctions against Iran, and forces EGL to withdraw from the contract with NIGEC.
The Swiss government continues to maintain a neutral stance.
