OFAC Sanctions Two COSCO Subsidiaries

The Treasury’s Office of Foreign Assets Control on Sept. 25 announced sanctions on two subsidiaries of COSCO Shipping Corporation and clarified that the designation does not apply to their parent company or any of other COSCO affiliates. In total, OFAC announced sanctions on five people and six entities and issued a new Frequently Asked Questions document.

The FAQ addresses whether sanctions on two of the designated entities, COSCO Shipping Tanker (Dalian) Co. and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co., apply to their “corporate parent and affiliates.” The agency said the sanctions only apply to the "listed entities and any entities in which they" have a majority ownership but do not apply to COSCO or its other subsidiaries. OFAC clarified that U.S. and non-U.S. companies are not banned from doing business with COSCO as long as "the proposed dealings do not involve any blocked person, or any other activities prohibited pursuant to any OFAC sanctions authorities."

OFAC did not immediately release more information on the sanctioned people and entities. The listings for the individuals added to the Specially Designated Nationals list all have addresses in China and operate in the banking and foreign exchange sector. The entities are based in either mainland China or Hong Kong, or the British Virgin Islands.