United States Slaps New Sanctions on Seven Foreign Corporations, Venezuela State Oil Company, for Iran Business

May 24, 2011 12:33pm

Kirit Radia (@kiritradia_abc) reports:

The United States slapped sanctions Tuesday on seven foreign companies, including Venezuela’s state oil company PDVSA, for engaging in trade with Iran’s energy sector in violation of the Iran Sanctions Act.

“By imposing these sanctions, we're sending a clear message to companies around the world:  Those who continue to irresponsibly support Iran's energy sector or help facilitate Iran's efforts to evade U.S. sanctions will face significant consequences,” Deputy Secretary of State James Steinberg said in announcing the new measures.

“Iran uses revenues from its energy sector to fund its nuclear program, as well as to mask procurement of dual-use items.  Today's actions add further pressure on Iran to comply with its international obligations,” he added.
 
The sanctions will prevent the companies from accessing U.S. government contracts, but will not prohibit oil sales to the United States and will not affect their subsidiaries. They will also be prevented from accessing the U.S. banking system and from making transactions through the United States.
 
Steinberg said the Obama administration had carefully considered any affect on oil markets before making the decision.
 
These are the first sanctions imposed by the United States for refined petroleum products under the Iran Sanctions Act since it was amended last year. The other entities sanctioned today are the UAE’s Royal Oyster Group, Speedy Ship of the UAE and Iran, Singapore’s Tanker Pacific, Israel’s Ofer Brothers Group, Monaco’s Associated Shipbroking, and Petrochemical Commercial Company International of Jersey.
 
PDVSA, according to the State Department, has in the past several months delivered to Iran at least two shipments of products needed to improve the quality of gasoline worth around $50 million.
 
“All these companies have engaged in activities related to the supply of refined petroleum products to Iran, including the direct supply of gasoline and related products, as well as the provision of an oil product tanker to the Islamic Republic of Iran Shipping Lines, IRISL, an entity that has been designated by the United States and the European Union for its role in supporting Iran's proliferation activities,” Steinberg told reporters. 

Some of the companies sanctioned today are among the largest suppliers of refined petroleum products to Iran, according to the State Department. Others are being punished for knowingly working with entities or front companies that are under U.S. sanctions or for their role in violating U.S. and European Union sanctions by providing a tanker last September valued at $8.65 million to the Islamic Republic of Iran Shipping Lines, which had previously been hit with sanctions.
 
Steinberg said that enforcement of U.S. sanctions to date has already had an impact.
 
“In the refined petroleum sector, we've seen many indications that shipments of refined petroleum have dropped significantly since the passage of CISADA,” he said, referring to the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. 

“Some reports indicate that imports in some months have dropped over 60 percent. Iran has lost millions in potential revenue by converting petrochemical plants to produce gasoline to make up for their dramatic shortfall in gasoline imports,” he added. 

Steinberg also announced separate sanctions on an additional 16 foreign entities for their involvement in missile and nuclear proliferation activities involving Iran, Syria, and North Korea.
“These entities were sanctioned for the transfer to or acquisition from North Korea, Syria or Iran of goods, services or technologies controlled under the various export control regimes or otherwise have the potential to make a material contribution to the developments of WMD or cruise or ballistic missile systems,” he said.

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