June 7, 2019

OFAC places new sanctions on Iran petrochemical sector

The US Department of the Treasury, Office of Foreign Assets Control (OFAC) has designated Persian Gulf Petrochemical Industries Company (PGPIC), pursuant to Executive Order 13382, for providing support to Khatam al-Anbiya Construction Headquarters, the engineering arm of the Islamic Revolutionary Guard Corps (IRGC).  In addition to today’s designation of PGPIC, OFAC designated its Iran-based subsidiaries, and companies controlled by them, including those in the UK, the Philippines, and the UAE.  As a result, non-U.S. persons risk the imposition of secondary sanctions for providing material support to the designated entities, as well as foreign financial institutions that knowingly facilitate significant financial transactions to designated entities.  The secondary sanctions risks resulting from today’s designations are in addition to the sanctions already in place since November 5, 2018, which threaten sanctions for the purchase, acquisition, sale, transport, or marketing of petrochemical products from Iran and for knowingly providing insurance or re-insurance for the transport of Iranian petroleum and petrochemical products.  Secondary sanctions may be imposed, even for activity with no US nexus.