Related News

Akin hires ex-OFAC chief counsel

US slaps sanctions on Dubai trader and EU subsidiaries over terror links

HFW hires sanctions partner in London

Know your cargo: US to use sanctions enforcement powers “robustly”

UK to toughen sanctions regime with new enforcement unit

US authorities have taken action against companies in the United Arab Emirates (UAE), Singapore, Hong Kong, China and Malaysia for allegedly breaching US sanctions on oil exports from Iran. 

The US Treasury Department announced this week that six companies had been added to its list of sanctioned entities for their role in facilitating the sale of Iran-origin petroleum products to buyers in East Asia. 

A UAE-based company, Blue Cactus Heavy Equipment and Machinery Spare Parts Trading, is accused of facilitating the sale of oil to Trilliance, a trade intermediary sanctioned by the Treasury since January 2020 and described as “one of Iran’s most important petrochemical brokers”. 

Three other companies are accused of facilitating oil sales on behalf of Persian Gulf Petrochemical Industries Company (PGPIC), previously described by the Treasury as Iran’s “largest and most profitable petrochemical holding group”. It has been sanctioned since June 2019, when it was believed to account for half of all Iranian oil exports. 

Farwell Canyon HK Limited is headquartered in Hong Kong, while Shekufei International Trading has entities in Hong Kong and China. PZNFR Trading Limited is headquartered in Malaysia and also has operations in Hong Kong. 

PGPIC used bank accounts held by all three companies “to collect millions of dollars’ worth of proceeds from these sales” of sanctioned oil, officials say. 

The Treasury has also added Singapore-based Pioneer Shipmanagement Pte Ltd and China-headquartered Golden Warrior Shipping Co. Limited to its list of sanctioned entities, though has not provided details on either case. 

None of the six companies have an internet presence or could be reached by GTR, though UAE corporate records show that Blue Cactus’ business licence has been cancelled. 

The announcement marks the first time a Malaysia-based entity has found itself on the country’s sanctions list, while only one Singapore-headquartered company, fuels trader Jiaxing Energy Holding, has previously been designated – also for its alleged dealings with Trilliance. 

Companies in the UAE and China have been the subject of several previous US enforcement actions. Trilliance itself was headquartered in Hong Kong when it became subject to US sanctions, with operations in the UAE, China and Germany. 

Treasury says the total value of oil sales facilitated by the six companies runs into the “tens of millions of dollars”. 

The move comes despite market suggestions that the US government could allow Iran to increase its oil export volumes in the coming months. 

Talks have stalled on reviving the Joint Comprehensive Plan of Action, an agreement that lifted sanctions on Iranian oil from January 2016 but was scrapped by then-President Donald Trump in May 2018. 

However, energy traders have expressed hope that the squeeze on oil supply caused by sanctions on Russia, and the resulting acceleration of price increases, could prompt US officials to relax restrictions. 

Brian Nelson, Treasury under-secretary overseeing terrorism and financial intelligence, says the government is continuing to seek “a mutual return to full implementation of the Joint Comprehensive Plan of Action” but that sanctions enforcement will continue until that is the case. 

“Until such time as Iran is ready to return to full implementation of its commitments, we will continue to enforce sanctions on the illicit sale of Iranian petroleum and petrochemicals,” he says. 

Iran has reportedly increased its oil exports significantly, however. The country’s oil minister said last month that export volumes had increased by 50%, and the revenue collected from such sales had doubled, according to a broadcast by US-backed Radio Farda. 

Nevertheless, revenue collected in April and May remained less than 15% of the amount due, the Supreme Audit Court of Iran says. Radio Farda adds that Russia is applying a discount of US$30 per barrel on its crude exports to Asia, around US$10 more than the discount applied by Iran.