The U.S. Treasury Department and Office of Foreign Assets Control (OFAC) of removed sanctions on shipping tanker COSCO Dalian on Jan. 31.
On Sept. 25, 2019, OFAC designated COSCO Dalian and a second vessel from China’s largest shipping company on the Specially Designated Nationals and Blocked Persons List for transporting Iranian crude oil to China.
That had an enormous and immediate impact on the oil and shipping industries since a handful of COSCO subsidiaries and dozens of vessels were also considered sanctioned by OFAC and effectively removed from the petroleum shipping market.
“OFAC hasn’t announced the policy rationale yet, but [it] likely resulted from receiving credible assurances that the Chinese company would no longer ship Iranian oil,” observes Beau Barnes, an attorney at the global firm Kobre & Kim. “The speed of the removal is lightning fast by OFAC’s standards, and likely stems from the company’s critical role in the global supply chain.”
Some have opined that ongoing U.S.-China trade talks played a role in the OFAC delisting.
“COSCO’s original designation had caused increased global tanker freight rates to increase, leading OFAC to issue two waivers to temporarily allow transactions with the company,” notes Barnes, who represents clients in white-collar criminal defense matters, investigations, regulatory actions and commercial litigation, with a particular focuses on matters related to national security, economic sanctions, export controls, economic espionage and cybersecurity.