India-based Firm Sanctioned by US for Dealing in Iranian Petroleum Products

This is the first time that an India-based entity has been sanctioned by the US for involvement in dealing with Iranian petroleum products

A Mumbai-based petrochemical trading firm is among entities sanctioned by the US for being part of a global network of companies allegedly involved in selling Iranian petroleum products worth hundreds of millions of dollars to end users in South and East Asia.

This is the first time that an India-based entity has been sanctioned by the US for involvement in dealing with Iranian petroleum products. Iran was among India’s top three energy suppliers till May 2019, when the country stopped purchasing Iranian crude due to the threat of secondary sanctions by the US.

The US treasury department said on Thursday, 29 Sept. 2022 that Tibalaji Petrochem Private Limited “purchased millions of dollars’ worth of Triliance-brokered petrochemical products, including methanol and base oil, for onward shipment to China”.

Triliance is a Hong Kong-based broker with branches in Iran, the United Arab Emirates (UAE), China, and Germany that was sanctioned by the US in 2020 for providing financial and technological support to the National Iranian Oil Company (NIOC).

The US treasury department also accused Triliance of purchasing petrochemical and petroleum products worth millions of dollars from Iran-based petrochemical brokers Iran Chemical Industries Investment Company and Middle East Kimiya Pars Co and shipping them to India.

It described Triliance as “a critical component of Iran’s petroleum and petrochemical sectors, which brokers the sale of Iranian products to foreign purchasers”.

There was no immediate response from Indian officials or from Tibalaji Petrochem to the development. The Indian firm’s website describes it as a reputed and leading distributor of chemical, solvent, fertiliser, and polymer products in India.

While announcing the latest sanctions against entities involved in dealing with Iranian petroleum products, US secretary of state Antony Blinken said on Thursday that the United States is taking “further action to disrupt efforts to evade sanctions on the sale of Iranian petroleum and petrochemical products”.

The US state department imposed sanctions on two China-based entities, Zhonggu Storage and Transportation Co Ltd, which operates a commercial crude oil storage facility that provides a “vital conduit” for the Iranian petroleum trade, and WS Shipping Co Ltd, the manager of a vessel that transported Iranian petroleum products.

The US treasury department sanctioned eight entities based in Hong Kong, Iran, India, and the UAE for involvement in Iran’s petrochemical trade. These entities included Tibalaji Petrochem.

“As Iran continues to accelerate its nuclear program in violation of the JCPOA, we will continue to accelerate our enforcement of sanctions on Iran’s petroleum and petrochemical sales under authorities that would be removed under the JCPOA,” Blinken said, referring to the Joint Comprehensive Plan of Action or the Iranian nuclear deal.

“Anyone involved in facilitating these illegal sales and transactions should cease and desist immediately if they wish to avoid US sanctions,” he said.

The other entities sanctioned by the US treasury department are Iran Chemical Industries Investment Company, Middle East Kimiya Pars Co, Hong Kong-based Sierra Vista Trading Limited, UAE-based Clara Shipping LLC, UAE-based Virgo Marine, Hong Kong-based Sophychem HK Limited, and ML Holding Group Limited. Most of them were accused of helping ship Iranian petroleum products to China.

As a result of the sanctions, any assets owned by the targeted entities in the US will be blocked, while persons that engage in transactions with the designated entities may be exposed to sanctions or enforcement action.