A merican Club Circular No. 34/1 9 1 SEPTEMBER 11, 2019 CIRCULAR NO. 34/19 TO MEMBERS OF THE ASSOCIATION Dear Member: GUIDANCE ON OFAC: IRAN SANCTIONS AS THEY RELATE TO BUNKERING OPERATIONS On September 4, 2019, OFAC issued an “Advisory to the Maritime Petroleum Shipping Community” setting forth sanctions’ risks related to shipping petroleum and petroleum products from Iran. For a copy of the Advisory, see: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/Iran_advisory_09032019.pdf OFAC has emphasized that shipowners, charterers, or traders must be aware of the significant sanctions risk for providing bunkering services to vessels transporting petroleum or petroleum products from Iran. According to the Advisory, the US is “aggressively enforcing” sanctions against Iran and is targeting shipments of petroleum and petroleum products from Iran as a “critical element” of denying access to financial resources to support its activities. OFAC’s Advisory warns that anyone who knowingly engages in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran or of Iranian origin, or who knowingly provides significant support to an Iranian person or entity on the SDN list is at “serious risk” of being targeted by the US for sanctions, “regardless of the location or nationality of those engaging in such activities.” Importantly, the Advisory also warns that persons providing bunkering services to vessels transporting petroleum or petroleum products from Iran, risk being subject to sanctions themselves, unless an applicable waiver or exception applies. FAQs # 296, 691, 692 on Bunkering dated September 5, 2019 provide guidance to shipowners, who are engaged in non-sanctionable conduct, with respect to Iran on their bunkering activities in trade to and from Iran. The relevant FAQs provide as follows: 296. Will the provision of bunkering services to a non-Iranian vessel carrying non-sanctionable goods to or from Iran be subject to sanctions? If a non-Iranian vessel is transporting non-sanctionable goods to or from Iran, the bunkering of that non-Iranian vessel in a country other than Iran — and related payments for these bunkering services — will not be subject to sanctions, only if (1) the transaction either does not involve US persons (including US financial institutions) or A merican Club Circular No. 34/1 9 2 US-owned or -controlled foreign entities, or the transaction is exempt from OFAC regulation or authorized by OFAC if it does involve US persons ... or US-owned or controlled foreign entities, and (2) the transaction does not involve persons on [the SDN list] that have been designated in connection with Iran’s support for international terrorism or proliferation of weapons of mass destruction, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or activity that is subject to other sanctions authorities. 691. Will the provision of bunkering services to a non-Iranian vessel carrying sanctionable goods to or from Iran be subject to sanctions? If a non-Iranian vessel is transporting sanctionable goods to or from Iran ..., bunkering of that non-Iranian vessel in a country other than Iran — and related payments for these bunkering services — risk being subject to sanctions unless an applicable waiver or exception applies. For example, persons providing bunkering services to a non-Iranian vessel transporting petr