The penalties are the first issued under a revised sanctions law that targets companies that help Iran import refined products or develop its refining sector, according to the State Department.
The companies sanctioned include Petróleos de Venezuela (PDVSA), which is Venezuela’s state-owned oil company. The company, between December 2010 and March 2011, has delivered at least two cargoes to Iran – worth roughly $50 million – of a blending component that increases gasoline quality, the department said.
The sanctions against PDVSA will prevent it from competing for U.S. procurement contracts, securing financing from the Export-Import Bank of the U.S., and obtaining U.S. export licenses. But they will not affect PDVSA’s subsidiaries, including CITGO, or prevent sale of oil to the U.S. or other markets.
The sanctions drew praise on Capitol Hill.
“The administration’s decision to impose further sanctions on businesses directly or indirectly assisting Iran’s pursuit of weapons of mass destruction is a welcome development; hopefully, other countries will follow the Obama administration’s example,” said Rep. Howard Berman (D-Calif.), the top Democrat on the House Foreign Affairs Committee.
Sen. Richard Lugar (R-Ind.), the top Republican on the Senate Foreign Relations Committee, singled out the action against PDVSA.
He called it a “welcomed and directed first step” that stems from the Venezuelan government’s “unwillingness to break its ties with terrorist organizations and countries that support them.”
Lugar said the Obama administration is coming to realize “that the Venezuelan government is not likely to back away from these relationships without more explicit international exposure and action.”
The sanctions announced Tuesday also target other companies including Petrochemical Commercial Company International, which has offices in the U.K., the United Arab Emirates and elsewhere; Royal Oyster Group of the UAE; and Speedy Ship, aka Sepahan Oil Company of the UAE and Iran.
“These firms are among the largest current suppliers of refined petroleum products to Iran and all three regularly engaged in deceptive practices in order to ship these products to Iran and evade U.S. sanctions,” according to the State Department.
“The sanctions we have imposed on these firms will prohibit them from U.S. foreign exchange transactions, U.S. banking transactions, and all U.S. property transactions,” the department said.
Other sanctioned companies are Tanker Pacific of Singapore, Ofer Brothers Group of Israel, and Associated Shipbroking of Monaco.
“These companies are being sanctioned for their respective roles in a September 2010 transaction that provided a tanker valued at $8.65 million to the Islamic Republic of Iran Shipping Lines (IRISL), an entity that has been designated by the United States, and the European Union for its role in supporting Iran's proliferation activities,” according to the State Department.
The sanctions come as Rep. Ileana Ros-Lehtinen (R-Fla.), the chairwoman of the House Foreign Affairs Committee, is pushing legislation that would create a higher bar for the administration to waive sanctions, among other provisions. She argues the White House has been too timid in enforcing energy-related sanctions against Iran.
Separately, the State Department also announced sanctions Tuesday against an array of entities under the Iran, North Korea, and Syria Nonproliferation Act.