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US sanctions Cosco subsidiaries for importing Iranian crude oil

2019-9-30

COSCO Shipping Tanker (Dalian) Co and Cosco Shipping Tanker (Dalian) Seaman & Ship Management Co have been accused by the US government of breaching unilateral sanctions on Iran's energy and shipping sector.


The Office of Foreign Assets Control (Ofac) said that the blocking sanctions did not apply to the parent company, Cosco Shipping Corporation, or any of its other subsidiaries or holdings, reported UK's Lloyd's List.


The Ofac note added five Chinese citizens to its Specially Designated Nationals list, connected to the two Cosco subsidiaries, as well as a further three maritime companies and one oil company. Sanctions would only apply to other Cosco entities if any of these blocked people held 50 per cent or more of the company.


Hong Kong's China Concord Petroleum, Pegasus 88 and Kunlun Shipping, alongside Kunlun Holdings in the Virgin Islands were the other companies listed, with a total of 60 vessels affected.


This is the strongest action yet taken by the US over China's failure to comply with the unilateral sanctions as refineries continue to import Iranian crude and liquefied petroleum gas.


In spite of the Ofac reassurance that other Cosco subsidiaries remain unaffected, insurers, charterers and other marine service providers will be scrambling to ascertain and assess their exposure to the parent company as well as the other companies.


Until now, the Trump administration has largely ignored widespread international reports detailing how China had revamped maritime logistics to evade sanctions detection by buying and establishing a secondary fleet of tankers and gas carriers alongside Iran's sanctioned national tanker fleet of 60 vessels.


There is a subterfuge fleet of 21 tankers and liquefied petroleum gas carriers that are either Chinese- or Iranian-owned that are involved in shipping Iranian crude and gas to China, Syria and Turkey, according to analysis of Lloyd's List Intelligence data.


Many of the Chinese companies cited acquired aging tonnage in 2019 that is floating off Singapore and Malaysia, and recently Indonesia, supplying vessels with Iranian crude discharged from other ships, for onwards sailing to China, the report said.

 
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