Sanctions 21 Nov, 2019 Updated - Impact of the designation of COSCO Shipping Tanker (Dalian) Co. Tony Paulson Head of Asia & Corporate Director A number of Members have sought clarification from the Managers about the impact of the recent designation of COSCO Shipping Tanker (Dalian) Co. ("COSCO Dalian"). Download PDF It will be recalled that this entity (plus others) was designated on 25 September 2019 under Executive Order 13846. Simultaneous with notice of the designation, OFAC also published a FAQ which sought to emphasise that the impact of the designation was not intended to have a wider effect and that parties could continue to deal with other COSCO entities. Nevertheless there would appear to be some uncertainty over the precise impact of the designations and the FAQ. The position has been further impacted by OFAC issuing General Licence K on 24 October 2019 which entitles U.S. persons to wind-down their activities with COSCO Shipping Tanker (Dalian) Co. Ltd. and any subsidiary in which they own 50% or more for a limited period. Following consultation between the Club’s attorneys Freehill Hogan & Mahar and the U.S. authorities the following clarification is now offered, noting that the Executive Order has primary and secondary sanctions effects impacting on U.S. persons and non-U.S. persons respectively.  The general position: U.S. persons: May not directly or indirectly engage in any transactions with COSCO Dalian and any entity which they own or have a 50% or greater interest in. May continue to engage in transactions with any other COSCO entity, including COSCO Shipping Corporation Ltd. and COSCO Shipping Holdings, so long as COSCO Dalian do not own or have a greater than 50% interest in them. Non-U.S. persons: May continue to engage in transactions with COSCO Dalian as long as it does not involve sanctionable activity and there is no U.S. nexus (meaning for example that no payments can be made in U.S. Dollars). For the avoidance of doubt thi