The US administration today issued an advisory to the maritime industry on preventing violations of US sanctions, but stopped short of threatening strict penalties against shipping market participants.
The advisory asks the maritime shipping industry to be on the lookout for ship-to-ship transfers and shipping practices that it says Iran, North Korea and Syria use to avoid US sanctions targeting those countries' energy and mining sectors. It recommends a set of best practices for the industry to help avoid being targeted by the US authorities. But the advisory does not impose any specific requirements for compliance with US laws.
The advisory has been under discussion within the US administration for months, and its earlier iterations threatened to impose sanctions on ship owners, port and terminal operators, insurance firms and charterers for dealing with entities on the US sanctions list, even unwittingly.
The final product reflects feedback from the industry and the US sanctions officials' recent experience in targeting a subsidiary of China-based Cosco Shipping that led to a wide disruption in the oil tanker chartering market last year.
One of the points on the advisory is a recommendation for shippers and port authorities to verify whether a ship that has switched off its transponder may have done so to hide a cargo subject to US sanctions. That is a step back from the original plan of telling shippers not to deal with any vessel that previously switched off its transponder.
US sanctions removed more than 2mn b/d of Iranian exports from the market, but some volumes continue to be exported, primarily to China.
A strict US sanctions regime has not deterred potential interest in facilitating the Iranian oil trade, even from US-based entities. Indictments filed by US attorneys in recent months point to the involvement of US companies in that trade through use of intermediaries and cloaking the movement of tankers transporting that crude. An alleged representative of Iran's NIOC even succeeded in purchasing oil tanker Nautic last year and processed the payment through the US financial system, according to a court filing this month. The US Department of Justice has issued a forfeiture claim for the tanker, which is detained at an UAE port.
The advisory originally intended to primarily focus on oil shipping by Iran and Venezuela, but its final version does not specifically address any sanctions risks related to Venezuela. The US Treasury Department in February and March targeted oil trading subsidiaries of Russian state-controlled Rosneft, which accounted for the bulk of Venezuelan oil shipments. That Treasury action set a deadline of 20 May for US and foreign companies to wind down their business with Rosneft's targeted entities.
The conspicuous omission of any mention of Venezuela in the advisory contrasts with growing signs that state-owned PdV is regularly utilizing nearby Caribbean islands such as Aruba and Trinidad and Tobago to transship incoming fuel cargoes, and some outgoing crude. Signaling at Venezuelan ports is often obscured.
