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Mainland Chinese Trading Company Targeted as Part of U.S. Sanctions on Iran

The Treasury Department’s Office of Foreign Assets Control on 10 January designated various firms for violating U.S. sanctions on Iran. In addition to Iran-based individuals and firms, designated firms include (i) trading company Pamchel Trading Beijing Co. (also known as Pamchel Asia Co. and Pamchel Asia Steel Group Co.), with offices in Beijing and Hong Kong; (ii) Hong Xun, a vessel involved in the purchase, sale and transfer or Iranian metals products as well as the provision of critical metals production components to Iranian metal producers, and (iii) the vessel’s registered owner, Hongyuan Marine Co. of Zhejian.

Executive Order 13871 of May 2019 authorised U.S. sanctions on any firm trading iron, steel, copper or aluminium with Iran. A Treasury press release claims that Pamchel has purchased “tens of thousands of metric tons of steel slabs” since August 2019 from an Iranian steel producer and co-ordinated the sale of Iranian copper concentrates to a mainland Chinese purchaser. Treasury further contends that Pamchel sold “multiple consignments of carbon blocks, cathode blocks, and graphite electrodes” to an Iranian mineral trading firm. It is also alleged that a Seychelles-registered firm, Power Anchor Limited, served as a “front company” for these transactions, but Pamchel ostensibly knew that Seychelles was not the source of the metals nor the destination of the cathodes and electrodes. Treasury indicates that Pamchel’s steel slabs were transported to mainland China in September 2019 aboard the vessel Hong Xun. Hongyuan Marine Co. is listed as the vessel’s ship manager/commercial manager and registered owner.

According to Treasury, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

The White House also issued a new executive order on 10 January ordering sanctions on additional sectors of the Iranian economy, including construction, mining, manufacturing, textiles, and any other sector of the Iranian economy as may be determined by the secretary of the Treasury in consultation with the secretary of State.

Appearing on television on 12 January, U.S. Treasury Secretary Steve Mnuchin discussed the enforcement and expansion of the Iran sanctions. Mnuchin said that mainland China “is subject to sanctions like everybody else” and reported that mainland Chinese state-owned enterprises were discontinuing Iranian oil purchases.

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