The sanctions apply to Iranian flagged vessels or those hired by the government
Bunkering or providing other services to Iranian vessels will be a violation of U.S. sanctions under new rules that go into effect July 1, 2013 the law firm of Holland & Knight reports.
The U.S. Office of Foreign Assets Control (OFAC) recently issued new guidance on the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA), which takes effect July 1, 2013, explaining that the new rules apply to seagoing vessels owned, controlled, or chartered directly or indirectly by the Iranian government, or flying an Iranian flag.
For such vessels, examples of prohibited activities include providing registry, classification, repair, survey, issuance of certificates or provision of maintenance, supply, bunkering, and docking.
Along with IFCA, U.S. President Barack Obama has issued a new rule, Executive Order 13645, which also takes effect July 1, 2013, tightening sanctions on petroleum and petrochemical exports from Iran, making it clear that existing sanctions apply to entities involved in transport or marketing of Iranian petroleum product exports.
Holland & Knight
The pending IFCA sanctions have already had a chilling effect
The executive order also targets new parts of Iran's economy for sanctions, including currency exchange of Iranian rials and the country's automotive industry.
Non-U.S. companies that violate the new rules face possible U.S. sanctions, denial of insurance coverage, refusal by banks to process transactions related to Iran, and counterparties that may refuse to perform on contracts involving possible sanctionable conduct.
"The pending IFCA sanctions have already had a chilling effect on foreign trade with Iran," Holland & Knight said.
"In particular, the uncertainty regarding what transactions will be considered 'significant' under IFCA raises concerns even for the transport of non-sanctioned cargo.
"Hence, except for trade related to humanitarian goods and expressly exempt oil/natural gas transactions, there are no clear safe harbors."
International sanctions targeting Iran's nuclear programs have been said to have curbed its crude exports, but the nation has been selling more fuel oil.