US Threatens Sanctions on Shipping Companies Paying Transit Fees to Iran

On May 3, the Office of Foreign Assets Control (OFAC) under the US Department of the Treasury warned on May 1 that any shipping company that pays transit fees to Iran for passage through the Strait of Hormuz, including in the form of charitable donations, could face US sanctions. A document released by OFAC on April 28 stated that the US prohibits its individuals or entities from paying security transit fees to Iran, and that non-US individuals or entities making such payments to Iran would also face significant sanction risks. On May 1, OFAC indicated that payment requests from Iran could involve not only cash transfers but also digital assets, debt offsets, informal swaps, or other physical payments, including charitable donations to the Iranian Red Crescent or the Iranian embassy. Any individuals or entities making payments to Iran in any form could face US sanctions. It remains unclear whether any companies or countries have made such indirect payments. Reports indicate that at least $2 million has been paid to Iran by entities to allow a ship to pass through the Strait of Hormuz. OFAC also announced new sanctions against three Iranian foreign exchange institutions.