TT Talk - Introduction to OFAC, CISADA and EU REGULATION 961/2010

In recent months the international trading world, including the Club and its Members, has been faced with an intensified sanction regime. The position under the major legislative changes is summarised in this issue and impact all those in the transport and logistics industry involved in international trade, as well as insurers.

(a) OFAC (Treasury Office of Foreign Assets Control and the Department of Commerce)

This emanates from the United States against designated states, regimes, companies and people, including Iran. OFAC enforces sanctions against 15 territories and over 6000 individuals, entities, and vessels (Specially Designated Nationals) (SDNs) involved in activities inimical to US interests.

The activities include WMD, terrorism, and drug trafficking. It is illegal for a 'US person' without an OFAC licence to engage in a 'prohibited transaction' with a sanctioned territory or an SDN. The territorial sanctions, and therefore the definition of 'prohibited transaction', vary in extent.

The most comprehensive embargoes involve Cuba, Iran and Sudan. Broad embargoes also cover Myanmar, North Korea, and Syria. Sanctions in respect of other territories are primarily directed against SDNs.

(b) CISADA (Comprehensive Iran Sanctions, Accountability, and Divestment Act 2010)

This is United States regulation applying specifically against Iran. CISADA focuses principally on foreign persons engaging in certain types of transactions with Iran, and imposes sanctions such as blocking foreign exchange and freezing assets. Targeted activities include investing in or otherwise supporting Iran's petroleum and energy industries.

Regulation 961, implemented by the European Union against Iran, impacts in particular on insurance and prohibited goods.

It prohibits:

insurance of the Iranian Government, Iranian persons and bodies or anyone acting on behalf or at the direction of these;
sale, supply, transport and broking prohibited goods to Iran.

Prohibited goods are defined generally as relating to the nuclear and oil and gas industries, military equipment and internal repression.