OFAC adds to narcotics & Iran sanctions programs

PRESS RELEASES

Treasury Targets Network Supporting Iranian Petrochemical and Petroleum Sales

November 17, 2022

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 companies in multiple jurisdictions facilitating the sale of hundreds of millions of dollars’ worth of Iranian petrochemicals and petroleum products to buyers in East Asia on behalf of sanctioned Iranian petrochemical brokers Persian Gulf Petrochemical Industry Commercial Co. (PGPICC) and Triliance Petrochemical Co. Ltd. (Triliance), as well as the National Iranian Oil Company (NIOC) and its marketing arm, Naftiran Intertrade Company Ltd. (NICO). Today’s action, the fifth round of designations targeting Iran’s illicit petroleum and petrochemical trade since June 2022, demonstrates our determination to target sanction evasion efforts. 

“Today’s action further demonstrates the complex sanctions evasion methods Iran employs to illicitly sell petroleum and petrochemical products,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States will continue to implement sanctions against those actors facilitating these sales.”

Today’s action was taken pursuant to Executive Order (E.O.) 13846. PGPICC was designated pursuant to E.O. 13382 on June 7, 2019, for being owned or controlled by Iranian petrochemical conglomerate Persian Gulf Petrochemical Industry Co. (PGPIC), which was itself designated pursuant to E.O. 13382 that same day for providing financial support to Khatam al-Anbiya Construction Headquarters, the engineering conglomerate of Iran’s Islamic Revolutionary Guard Corps (IRGC).

Triliance was designated pursuant to E.O. 13846 on January 23, 2020, for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of NIOC.

PGPICC SANCTIONS EVASION

Access Technology Trading L.L.C (Access Technology), which is based in Dubai and formerly known as ME Access Technology General Trading FZE, has purchased petrochemicals from PGPICC worth tens of millions of dollars for shipment to the People’s Republic of China (PRC). Throughout 2022, Hong Kong-based Highline Logistic HK Limited served as a front company to enable PGPICC to receive millions of dollars from customers, including Access Technology, obfuscating PGPICC’s role in the transactions. To further conceal their roles in the transactions, PGPICC and its complicit business partners, such as Access Technology, altered invoices to evade anti-money laundering controls. Additionally, since late 2021, Dubai-based Monch General Trading L.L.C. has purchased petrochemical products worth more than $10 million dollars from PGPICC to broker sales to to the PRC. 

Since 2021, Hong Kong-based Hong Kong Aeonian Complex Co., Limited (Hong Kong Aeonian) has purchased thousands of metric tons of petrochemicals worth millions of dollars from PGPICC. Hong Kong Aeonian paid PGPICC via front companies, such as Hong Kong-based Torgan Co., Limited (Torgan), to obscure PGPICC’s role in these transactions. Since early 2022, Torgan has received payments on behalf of PGPICC for its petrochemicals sales to foreign customers. PRC-based Zhejiang Wonder Imp. and Exp. Co., Ltd. has similarly purchased petrochemicals from PGPICC and remitted payment via a PGPICC front company.

Monch General Trading L.L.C., Access Technology Trading L.L.C., Highline Logistic HK Limited, Hong Kong Aeonian Complex Co., Limited, Torgan Co., Limited, and Zhejiang Wonder Imp. and Exp. Co., Ltd. are being designated pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, PGPICC.

TRILIANCE SANCTIONS EVASION

Since 2020, Triliance has orchestrated millions of dollars’ worth of funds transfers to accounts owned by UAE-based Asian Zone Trading L.L.C in an attempt to avoid U.S. sanctions. Similarly, Triliance has used UAE-based Galaxy Petrochemical FZE (Galaxy Petrochemical) to facilitate the sale of petrochemicals, such as butane and propane, involving Treasury-designated entities including Kharg Petrochemical Company Limited (Kharg Petrochemical) and Petrokick LLC. In February 2021, Triliance brokered the sale of millions of dollars’ worth of Iran-sourced naphtha destined for the UAE from Kharg Petrochemical and used Galaxy Petrochemical as a front company to obfuscate the source of the funds and the entities party to the transactions. 

In early 2022, Triliance used UAE-based Newton Trading FZE to receive payments for tens of thousands of metric tons of Iranian naphtha, worth tens of millions of dollars, most of which was bound for the UAE. Since at least November 2021, Triliance paid millions of dollars into accounts owned by UAE-based Sum Five Petrochemicals Trading L.L.C (Sum Five) for the sale of tens of thousands of metric tons of paraffin. Sum Five has operated as a front for Iranian producers selling petrochemicals to Triliance.

In February 2022, Edgar Commercial Solutions (ECS), a designated Triliance front company, used a Hong Kong-based Barza Style & Mode Co., Limited (Barza) account to receive funds for the sale of thousands of metric tons of low density polyethylene in order to obfuscate ECS’s and Triliance’s roles in the transaction. Between June and July 2022, ECS continued to pay into an account owned by Barza for the sale of of hundreds of metric tons of low density polyethylene. 

Asian Zone Trading L.L.C, Galaxy Petrochemical FZE, Newton Trading FZE, and Sum Five Petrochemicals Trading L.L.C are being designated pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Triliance.

Barza Style & Mode Co., Limited is being designated pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of ECS.

Uteliz Resources Co., Limited is being designated pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Triliance.

NIOC SANCTIONS EVASION

In late 2021, PRC-based East Asia Trading Import and Export Trade Co., Ltd.facilitated a shipment of petroleum to a foreign customer for NIOC and its marketing arm, NICO. East Asia General Trading Co. Ltd. has also served as a front to facilitate the payment of debt worth tens of millions of dollars from the sale of oil by NIOC.

NIOC was designated pursuant to the counterterrorism authority E.O. 13224 on October 26, 2020 for its support to the IRGC-Qods Force. NIOC is also identified pursuant to E.O. 13599 as being owned or controlled by the Government of Iran. NICO is also identified pursuant to E.O. 13599 for being owned or controlled by the Government of Iran.

East Asia Trading Import and Export Trade Co., Ltd. is being designated pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of NICO.

SANCTIONS IMPLICATIONS 

As a result of today’s action, all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to an enforcement action. Furthermore, unless an exception applies, any foreign financial institution that knowingly facilitates a significant transaction for any of the individuals or entities designated today could be subject to U.S. sanctions.

The power and integrity of OFAC sanctions derive not only from its ability to designate and add persons to the list of Special Designated Nationals and Blocked Persons (“SDN List”), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

U.S. Treasury Department Press Release

PRESS RELEASES

Treasury Sanctions Illicit Fentanyl-Trafficking La Nueva Familia Michoacana and its Leaders

November 17, 2022

Violent Mexico-based drug organization traffics “rainbow fentanyl” and other deadly drugs to the United States

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated La Nueva Familia Michoacana and its co-leaders, Johnny Hurtado Olascoaga (Johnny Hurtado) and Jose Alfredo Hurtado Olascoaga (Jose Hurtado), pursuant to Executive Order (E.O.) 14059, for having engaged in, or attempted to engage in, activities or transactions that materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. La Nueva Familia Michoacana smuggles illicit drugs into and throughout the United States. This organization is also behind the increasing U.S. presence of rainbow fentanyl, which, according to the U.S. Drug Enforcement Administration (DEA), appears in the form of pills/powder that come in a variety of bright colors, shapes and sizes and is made to attract children and young users.

“Today’s action targets the leadership of one of the most violent and depraved drug cartels,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Not only does this cartel traffic fentanyl, which claimed the lives of more than 71,000Americans last year, it now markets ‘rainbow fentanyl’ as part of a deliberate effort to drive addiction amongst kids and young adults. Treasury’s partnership with the DEA and the Mexican government has been critical as we take actions to protect our citizens from the harmful effects of these deadly narcotics.”

La Nueva Familia Michoacana is the successor of the original La Familia Michoacana, which was designated in 2009 pursuant to the Foreign Narcotics Kingpin Designation Act and designated again on December 15, 2021 pursuant to E.O. 14059. La Nueva Familia Michoacana operates in approximately 35 Mexican municipalities in the states of Michoacán, Guerrero, Morelos, and the state of Mexico. It is expanding into other regions of Mexico and generates revenue from drug trafficking, illicit mining, and extortion. Members of La Nueva Familia Michoacana are distributing “rainbow fentanyl,” which is spreading throughout the United States. La Nueva Familia Michoacana’s other drug trafficking activities include the planting of marijuana and poppy and trafficking various drugs from Central America, to include methamphetamine, heroin, cocaine, and fentanyl, all of which are destined for the United States. 

In addition to La Nueva Familia Michoacana, OFAC designated its co-leaders, Mexican nationals Johnny Hurtado and Jose Hurtado, for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. La Nueva Familia Michoacana has also demonstrated a willingness to attack government officials and buildings in Mexico, in addition to employing and training multiple assassins. This violence is conducted in furtherance of their poly-drug trafficking activities within Mexico and the United States. Johnny Hurtado and Jose Hurtado are two of the most wanted criminals in Mexico; the State of Mexico’s Attorney General’s Office is offering up to 500,000 Mexican pesos for information leading to the capture of both Johnny Hurtado and Jose Hurtado.

On June 24, 2000, a federal grand jury in the United States District Court for the Southern District of Florida returned an indictment against Johnny Hurtado charging two counts related to the attempted possession of and conspiracy to distribute cocaine. Johnny Hurtado remains a fugitive from these charges. 

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated individuals and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of designated or otherwise blocked persons.

Today’s action is part of a whole-of-government effort to counter the global threat posed by the trafficking of illicit drugs into the United States that causes the deaths of tens of thousands of Americans annually, as well as countless more non-fatal overdoses. OFAC, in coordination with its U.S. government partners and foreign counterparts, will continue to target and pursue accountability for foreign illicit drug actors.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please visit here.

U.S. Treasury Department Press Release