U.S. Assures Banks on COSCO Shipping Sanction Rules

The Trump administration assured U.S. banks on Wednesday that they can temporarily process U.S. dollar transactions on Chinese shipping companies it had previously sanctioned for allegedly transporting oil from Iran, in a move meant to blunt the impact of the sanctions on global shipping markets.

The administration slapped sanctions on Sept 25 on Dalian units of Chinese shipping company COSCO, a move that pushed global freight costs to record highs. The Treasury Department's Office of Foreign Assets Control, or OFAC, said in the guidance on Wednesday it "would not expect the intermediary U.S. financial institution to conduct additional due diligence beyond the information collected in the ordinary course of processing such transactions," assuring banks such deals are permitted through Dec. 20, a wind-down period that Treasury allowed in a temporary waiver issued in October.

Reporting by Timothy Gardner