U.S. Treasury Sanctions Six Chinese Firms for Aiding Iranian Shipping

The U.S. Treasury's Office of Foreign Asset Control has placed six Hong Kong- and China-based shipping companies on its specially designated nationals (SDN) sanctions list in connection with prohibited transactions involving Islamic Republic of Iran Shipping Lines.

The sanctioned firms included Delight Shipping Company, Gracious Shipping Company, Supreme Shipping Company, and Noble Shipping Company, all based at the same address in Hong Kong; Reach Shipping Lines Hong Kong Co., based at a different Hong Kong address; and China-based Reach Holding Group Shanghai Company. 

Two individuals - Daniel He and Eric Chen, Reach Group's president and the CEO, respectively - have also been placed on the list. 

The U.S. Treasury referenced the Trump administration's 2018 sanctions on trade with Iran in justifying the SDN listings. In an accompanying statement, the U.S. State Department accused Reach Group of arranging for berthing for IRISL vessels at Chinese ports and allegedly concealing Iranian shipping activity from Chinese stakeholders, including the Chinese government. In addition, State alleged that the company "knowingly sold, supplied, or transferred four large container vessels" to the IRISL subsidiary Hafez Darya Arya Shipping Company (HDASCO).

Reach Group has an extensive history of business ties with Iran's shipping industry, long predating the sanctions regimes of both the Obama and Trump administrations. 

In an editorial penned in 2017 to celebrate the 50th anniversary of the Islamic Republic of Iran Shipping Lines (IRISL), Chen congratulated Iran's state-owned cargo vessel operator on its long tenure in the business. "Reach Group has been working with IRISL for over 17 years in international logistics," he wrote. "In July [2017] a Joint Venture, known as IRC . . . was established between IRISL Iran and Reach Group China to deal with the trading and services and business cooperation between Iran and China."

At the time, Chen described the JV's core business as facilitating the logistics of Iranian oil, gas and petrochemical production and sale, including the transport of required equipment and supplies. 

Virtually all transactions with Iran's shipping, petroleum and banking industries are currently forbidden by the U.S. Treasury. The consequences for violations include SDN listing, which bars affected entities from accessing the U.S. financial system, freezes their U.S.-domiciled assets and prohibits them from obtaining visas to visit the United States. 

"Today, we reiterate a warning to stakeholders worldwide:  If you do business with IRISL, you risk U.S. sanctions," said U.S. Secretary of State Mike Pompeo in a statement.