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Why a Mumbai-based company has been slapped with US sanction

Mumbai-based petrochemical company Tibalaji Petrochem Private Limited has purchased millions of dollars worth of Triliance-brokered petrochemical products, including methanol and base oil, for onward shipment to China. 

Why a Mumbai-based company has been slapped with US sanction
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First Published Sep 30, 2022, 3:29 PM IST

Aiming to put further pressure on Iran to revive the 2015 nuclear deal, the United States Treasury Department has announced new sanctions against several Asian firms, including one from India, accusing them of being involved in the sale of Iranian petrochemicals and petroleum products to end users in South and East Asia.

Apart from India, the Biden administration has also imposed sanctions on firms from the United Arab Emirates, Hong Kong and China. 

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In a statement, the US treasury department said: "Today's action targets Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products. These entities have played a critical role in concealing the origin of the Iranian shipments and enabling two sanctioned Iranian brokers, Triliance Petrochemical and Persian Gulf Petrochemical Industry Commercial, to transfer funds and ship Iranian petroleum and petrochemicals to buyers in Asia."

In addition to this, the US State Department has designated two entities based in the People's Republic of China (PRC) -- Zhonggu Storage and Transportation Co Ltd and WS Shipping Co Ltd -- for their involvement in Iran's petrochemical trade.

"The United States is committed to severely restricting Iran’s illicit oil and petrochemical sales," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E Nelson. 

"So long as Iran refuses a mutual return to full implementation of the Joint Comprehensive Plan of Action, the United States will continue to enforce its sanctions on the sale of Iranian petroleum and petrochemical products," he added.

The treasury department has further added that it action would be ongoing since Tehran continues to accelerate its nuclear program.

It also cautioned that: "Anyone involved in facilitating these illegal sales and transactions should cease and desist immediately if they wish to avoid US sanctions."

The Indian company slapped with a sanction

According to the Biden administration, Mumbai-based petrochemical company Tibalaji Petrochem Private Limited has purchased millions of dollars' worth of Triliance-brokered petrochemical products, including methanol and base oil, for onward shipment to China. 

What would be the implications of sanctions?

All property and interests in property of the company in the United States or in the possession or control of US persons will be blocked and reported to the treasury department’s Office of Foreign Assets Control (OFAC). 

In addition, any entities that are owned, directly or indirectly, 50 per cent or more by one or more blocked persons will also be blocked. 

Also, the persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to enforcement action.

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