Markets Wired

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated four entities for facilitating the export of Iranian petrochemical products by Triliance Petrochemical Co. Ltd. (Triliance), an entity designated by Treasury in January 2020. These China- and United Arab Emirates-based companies have provided Triliance with critical shipping services or conducted financial transactions on behalf of the company, enabling Triliance to continue brokering and moving Iranian petrochemical exports. Iranian petrochemical sales are an important revenue source for the Iranian regime, generating wealth for its corrupt leaders and financing a range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for foreign terrorist groups, and a variety of human rights abuses, at home and abroad.

“Iran’s petrochemical and petroleum sectors are primary sources of funding for the Iranian regime, which it uses to support its malign domestic and foreign agenda,” said Secretary Steven T. Mnuchin. “The United States will act against persons who support illicit actors engaged in the movement of Iranian petroleum and petrochemical sales.”

These entities are being designated pursuant to section 1(a)(iii)(B) of Executive Order (E.O.) 13846.

BACKGROUND

In January 2020, OFAC sanctioned Triliance and three other petrochemical and petroleum companies that collectively transferred the equivalent of hundreds of millions of dollars’ worth of exports from the National Iranian Oil Company (NIOC). In October 2020, OFAC designated the Iranian Ministry of Petroleum and NIOC pursuant to a counterterrorism authority for their financial support to Iran’s Islamic Revolutionary Guard Corps-Qods Force, a previously-designated Foreign Terrorist Organization.

Triliance has used, and continues to use, various front companies in connection with the purchase of petrochemical products by foreign buyers and the transportation of those petrochemical products from Iran. The entities targeted today help facilitate Iran’s petrochemical exports in contravention of U.S. economic sanctions.

SANCTIONS EVASION

In early 2020, China-based Donghai International Ship Management Limited (Donghai) was responsible for operating a vessel that freighted tens of thousands of metric tons of petrochemicals worth millions of dollars from Iran to China for a deal brokered by Triliance. 
 
China-based Petrochem South East Limited (Petrochem) was used to channel payments to companies involved in deals with Triliance. In early 2020, Petrochem was used to make payment to Donghai in return for Donghai’s management of a vessel used to transport petrochemicals in a deal brokered by Triliance. Likewise, in late 2019, Petrochem was used to facilitate a payment related to a deal for Iranian petrochemicals facilitated by Triliance.
 
UAE-based Alpha Tech Trading FZE has been used as a front company for Triliance’s and Trio Energy DMCC’s brokerage of thousands of tons of petrochemical sales. OFAC designated Trio Energy DMCC in September 2020 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Triliance. Likewise, UAE-based Petroliance Trading FZE has been used as a front company for Triliance’s brokerage of petrochemical sales.
 
Donghai International Ship Management Limited, Petrochem South East Limited, Alpha Tech Trading FZE, and Petroliance Trading FZE are being designated, pursuant to section 1(a)(iii)(B) of E.O. 13846, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Triliance. 
 
Concurrently with Treasury’s designations, the Department of State imposed sanctions on Vietnam Gas and Chemicals Transportation Corporation pursuant to E.O. 13846 in connection with significant transactions for the transport of petroleum products from Iran, on or after November 5, 2018. The Department of State also imposed sanctions pursuant to E.O. 13846 on the company’s Managing Director, Vo Ngoc Phung, for serving as a principal executive officer of the company.  

SANCTIONS IMPLICATIONS

All property and interests in property of these persons designated today subject to U.S. jurisdiction are blocked, and U.S persons are generally prohibited from engaging in transactions with them. Any entities that are owned, directly or indirectly, 50 percent or more by such persons are also blocked. In addition, foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the persons designated by OFAC today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.

View more information on the entities designated today.