Sanctions: COSCO license update

The UK P&I Club have received the following client alert from Freehill Hogan and Mahar, regarding a COSCO license update.

As reported in our Client Alert of September 25, 2019, the U.S. authorities had named two COSCO entities to the SDN list pursuant to the authority of Executive Order 13846 which re-imposed sanctions on Iran. The U.S. authorities subsequently issued General License K authorizing the wind down or maintenance of transactions involving COSCO Shipping Tanker (Dalian) Co. Ltd. ("Cosco Shipping Dalian") through December 20, 2019. Today, the Office of Foreign Assets Control (OFAC) issued an updated General License K-1 authorizing the maintenance or wind down of transactions involving Cosco Shipping Dalian through 12:01 a.m. eastern standard time February 4, 2020. The license expressly states that it does not authorize any transactions or activities with COSCO Shipping Tanker (Dalian) Seaman and Ship Management Co., Ltd., or any entity owned, directly or indirectly, 50% or more by that COSCO entity.

In conjunction with the issuance of General License K-1, OFAC amended three Iran-related FAQs concerning the impact of the designation of the COSCO entities, FAQ 804, FAQ 806, and FAQ 807. Those amended FAQs, as well as FAQ 805, provide useful guidance, particularly for non-U.S. shipowners contemplating trade with the designated COSCO entities.