Update to Risk Alert 30 US and UK Sanctions
As reported in Risk Alert 30, under Executive Order 13590, and with effect from 21 November 2011, sanctions may be imposed against persons (wherever located) engaging in activities that directly and significantly contribute to Iran’s ability to develop petroleum resources located in Iran (if a single transaction has a fair market value of USD 1m or more or a series of transactions from the same entity have a fair market value of USD 5m or more in a 12 month period), or maintain or expand its domestic production of petrochemical products (if a single transaction has a fair market value of USD 250,000 or more or a series of transactions from the same entity have a fair market value of USD 1m or more in a 12 month period). The Order is thus very widely drawn and it is possible that the provision of maritime transportation services, and related insurances, could contribute to these activities and thus attract sanctions under this Executive Order.
The State Department has however confirmed that the purchase and lifting of crude oil from Iran should not constitute sanctionable activity.
The State Department has also published two fact sheets which state that EO 13590 would not cover the purchase of petroleum resources or petrochemical products from Iran, or the shipping of those products from Iran, absent other sanctionable conduct. In addition, the completion of existing contracts is not sanctionable under EO 13590. However any contracts that are expanded, renewed or amended after the effective date of the Order could trigger sanctions.
The State Department Fact Sheets can be downloaded below.
