U.S. imposes sanction against Indian petrochemical company for ‘clandestine’ Iran oil purchases

Move by U.S. is first such action against Indian company, comes day after EAM Jaishankar U.S. visit

September 30, 2022 04:49 pm | Updated October 01, 2022 10:06 am IST - NEW DELHI

Photo used for representation purpose only.

Photo used for representation purpose only. | Photo Credit: The Hindu

In the first such move against oil shipments to India, the U.S. Treasury department announced it had imposed sanctions against a Mumbai based petrochemical company amongst several entities accused of selling Iranian petroleum products.

The company, Mumbai based Tibalaji in particular that was accused of purchasing shipments that were then sent to China, is the first Indian entity to face the U.S. designation under unilateral sanctions passed in 2018-19, after the U.S. Trump administration’s decision to walk out of the nuclear deal, or Joint Comprehensive Plan of Action (JCPOA) with Iran. While India has officially refused to endorse the “unilateral sanctions” of the U.S., the Modi government agreed to end all oil imports from Iran in 2019, that made up about 11% of India’s intake, rather than face the sanctions.

Announcing the move on Thursday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) said it had sanctioned the “international network of companies” that were involved in the sale of “hundreds of millions of dollars” worth Iranian petrochemical products to South Asia and East Asia.

“Today’s action targets Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products,” the treasury department said, accusing the sanctioned companies of “concealing the origin” of the shipments from Iran.

“India-based petrochemical company Tibalaji Petrochem Private Limited has purchased millions of dollars’ worth of Triliance-brokered petrochemical products, including methanol and base oil, for onward shipment to China,” the Treasury statement added, explaining that any U.S.-based assets owned by the sanctioned entities in the U.S. will be blocked, while personnel dealing with the Iranian shipments would also face “enforcement action”.

The U.S. claimed that the Indian company had worked with sanctioned entities like Triliance, a petroleum and petrochemical brokerage firm, as well as Iran Chemical Industries Investment Company and Middle East Kimiya Pars Co., for oil orders which were “ultimately shipped to India”.

Neither the Ministry of External Affairs, nor Tibalaji Petrochemicals responded to requests for a comment on the U.S. decision, that came a day after External Affairs Minister S. Jaishankar concluded his visit to the U.S., where he met several senior officials including U.S. Secretary of State Antony Blinken.

The Iranian embassy said it had no knowledge of any Indian company that was “registered to deal with such businesses”. However, a diplomat familiar with the issue said that the U.S. move was “hostile”, and called the sanctions “illegal”. The diplomat said, “Iran has never taken permission from the U.S. and accordingly it will adopt any necessary measure to ensure its legal rights and national interests.” 

“Today we took further actions to disrupt efforts to evade sanctions on the sale of Iranian petroleum and petrochemical products,” Mr. Blinken tweeted. When asked, neither the MEA nor U.S. officials commented on whether Mr. Blinken had discussed the impending sanctions with Mr. Jaishankar in Washington.

According to the Treasury department, the sanctions against Tibalaji and other companies could be reversed if Iran returns to compliance under the JCPOA agreement. Iran and International Atomic Energy Agency officials held a round of talks in Vienna this week to discuss the possibility of Iran’s agreement to reallow inspectors back to Iran for oversight over reactors. The U.S. and Iran have also exchanged their stands indirectly via the European Union for a “final draft” on rejoining the JCPOA.

“The United States is committed to severely restricting Iran’s illicit oil and petrochemical sales,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson; “So long as Iran refuses a mutual return to full implementation of the Joint Comprehensive Plan of Action, the United States will continue to enforce its sanctions on the sale of Iranian petroleum and petrochemical products.”

Along with Tibalaji petrochemicals, the OFAC announced sanctions against several oil shipping and brokering companies in the UAE, Iran and Hongkong and added the company linked to the Panama registered shipping vessel Gas Allure

“These entities have played a critical role in concealing the origin of the Iranian shipments and enabling two sanctioned Iranian brokers, Triliance Petrochemical Co. Ltd. (Triliance) and Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), to transfer funds and ship Iranian petroleum and petrochemicals to buyers in Asia” the U.S. Treasury claimed.

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