This is the fifth bulletin in our regular series on Iran sanctions which comes at a time when HMRC has convicted a Director of selling products to Iran and European Union foreign policy chief Catherine Ashton has announced that a new round of nuclear talks between Iran and the P5+1 group will take place from 15th to 18th November.

In a recent case brought by HMRC (R v Bisgrove - HMRC prosecution at Southwark Crown Court) Phillip Bisgrove, the owner of NDT Mart, a company that exports non-destructive testing equipment, was questioned by HM Revenue and Customs investigators about his export activities between May 2007 and June 2008. During this period Bisgrove made 10 supplies of goods to Iran without the required authorisation. These goods required a licence, for which Bisgrove did not apply. HMRC officers searched Bisgrove's home taking emails, invoices and other documents as evidence that he had known all along that his deals were illegal. Emails revealed that he had discussed shipping goods via Dubai, Malaysia and China in order to avoid export licence controls. According to HMRC investigators to try to cover his tracks, Bisgrove had also paid a separate company, RSM Motorsport, to ship and receive goods on behalf of NDT Mart. When interviewed by HMRC, Bisgrove tried to mislead, avoid and confuse issues regarding his dealings with the Iranian firm claiming he did not know a licence was required to export the dosimeters. However, when faced with the evidence he admitted he knew all along he needed a licence for the exports. Peter Millroy, Assistant Director of Criminal Investigation for HMRC said: "This case shows that those who flout the law in this way will be identified, investigated and if convicted will receive a prison sentence."

Mr Bisgrove was sentenced at Southwark Crown Court where he pleaded guilty to five counts of being knowingly concerned in the exportation of any prohibited or restricted goods. He has been jailed for eight months and ordered to pay GBP30,000. Confiscation proceedings are underway.

On 14th October the EU foreign policy chief put forth the proposal to hold a three-day round of talks between Iran and the P5+1 group (Britain, China, France, Russia, the United States, and Germany) over Tehran's nuclear program. The talks are planned for 15th to 18th November and will take place in Vienna. Iran announced it was prepared to resume nuclear discussions in September, but insisted that any negotiations must be conducted within the framework of a declaration the country issued with Brazil and Turkey in May. Dialogue between Iran and the P5+1 group, which Ashton represents, has been stalled since October 1st 2009, when the two sides met in Geneva.

Recent Sanctions Developments

On 13th October HM Treasury issued a new Financial Sanctions Notification. It covers:

  • The freezing of assets funds and economic resources of persons associated with Usama bin Laden, the Al-Qaida network and the Taliban as listed by the United Nations Security Council Al-Qaida and Taliban Sanctions Committee established pursuant to Resolution 1267 (1999);
  • The amendments following the publication of Commission Regulation (EU) No 906/2010 of 11 October 2010 in the Official Journal of the European Union (O.J. L268, 12.10.2010, p.21) on 12 October 2010. The European Commission has amended Annex I to Regulation 881/2002, with effect from 13 October 2010, to reflect the decisions made by the UN Sanctions Committee on 27 and 29 September 2010 to amend the identifying information of two existing entries on the UN list maintained under Resolution 1390 (2002); and
  • The UK's Consolidated List of individuals and entities subject to financial sanctions in effect in the UK which is maintained on the HM Treasury website and which has been updated to reflect the amendments.

For further information please see HM Treasury website.

Recent Developments in the News

The Washington Post has reported that US Intelligence believes some Chinese firms are helping Iran improve its missile technology and develop nuclear weapons and has asked Beijing to prevent such activity. Citing an unnamed senior US official, the newspaper said the request was conveyed during a visit to Beijing last month by a US delegation led by Robert Einhorn. A second official, also speaking anonymously, told the Post that Chinese companies had been discovered selling Iran high-quality carbon fibre, which could help make better centrifuges needed to enrich uranium. It is believed that Chinese officials did not authorise the activity of the companies. China has insisted that it has been implementing the sanctions.

It has been reported in Lloyd's List (12th October) that there have been papers lodged with the European Court of Justice claiming companies are being unfairly connected with nuclear proliferation. The Islamic Republic of Iran Shipping Lines (IRISL), together with a group of 19 other shipping companies affected by the sanctions, are challenging the EU's actions on the basis that they unfairly and inaccurately connect the companies with illegal nuclear weapon proliferation. Papers to this effect were lodged at the Court of Justice of European Communities in Luxembourg. Cases logged at the Court can be found on the CURIA website.

Proactive investors reported that EU sanctions against Iran are threatening the Nabucco pipeline (also referred to as the Turkey–Austria gas pipeline), which is set to transport natural gas from the Caspian region to Europe, due to Iran's 10% stake in Azerbaijan's Shah Deniz gas field. The Shah Deniz field is operated by BP which has a share of 25.5%. Other partners include Statoil (25.5%), SOCAR (10%), Total S.A. (10%), LukAgip, a joint company of Eni and LUKoil (10%), OIEC (National Iranian Oil Company) (10%), and TPAO (9%).

Recent Clyde & Co Articles

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