Paying Iran for Strait of Hormuz Passage: Sanctions and Shipping Risk

For U.S. persons — including U.S. companies, U.S. financial institutions and U.S.-owned or -controlled foreign entities — payments to, or guarantees from, the Government of Iran or the IRGC for safe passage are not authorised absent an applicable OFAC authorisation. OFAC guidance has been explicit that this extends to receiving safe-passage services even where no payment is made.

The risk is also payment-method neutral: fiat, digital assets, offsets, in-kind consideration and nominally charitable donations may all create exposure where they are mechanisms for obtaining Iranian safe passage. For a U.S. person, the baseline is prohibition unless a licence applies.

Non-U.S. persons are not subject to the same comprehensive U.S. primary prohibition merely because they are foreign. The exposure is different in character: secondary sanctions. OFAC has warned that safe-passage payments create significant secondary-sanctions exposure, and dealings with designated or blocked Iranian actors can carry consequences for foreign persons and financial institutions.

Whether a given transaction is “significant” is assessed on the totality of circumstances — size, frequency, nature, management awareness, nexus to blocked persons and any deceptive practices. A small payment is not automatically safe, and indirect or disguised routing can increase, not reduce, the risk.

The EU position is structurally different again. The EU does not impose a blanket embargo on all dealings with Iran; the critical question is whether funds or economic resources are made available, directly or indirectly, to or for the benefit of a listed person or entity, or whether another restriction applies.

Where a toll is paid to a listed entity — or through an intermediary where the funds are for its benefit — an EU person can face a direct asset-freeze prohibition absent an authorised derogation. It does not follow that every Iran-related payment is prohibited; a payment to an unlisted recipient requires separate analysis of the legal and beneficial recipient, the intermediary and the bank.

A UAE, Asian or other non-U.S./non-EU operator is not automatically bound by U.S. or EU primary sanctions simply because those regimes exist. But practical exposure remains, and it should not be assumed away: U.S. dollar clearing, a U.S. or EU bank, insurer, P&I club, parent or listed counterparty can all bring a transaction within reach, and U.S. secondary sanctions can target foreign persons without primary jurisdiction over the underlying deal.

For a shipowner, flag and place of incorporation are therefore insufficient answers. Ownership and control, payment currency, correspondent banks, insurers, charterparty parties and the identity of the Iranian recipient all bear on the exposure.

Each option carries a different profile. Paying risks sanctions and enforcement exposure and may not remove the underlying risk. Refusing and attempting passage risks detention, interference or a kinetic security exposure. Diverting or postponing may reduce sanctions exposure but creates delay, deviation cost and charterparty, cargo and insurance consequences. Using an intermediary does not remove sanctions risk where the payment is indirectly for a blocked person, and concealment can aggravate it.

Because those consequences reach into charterparty performance and insurance, they frequently become matters of dispute. Trident provides expert evidence on the operational risk picture — the threat and operating environment, and the reasonableness of the decisions taken — alongside, and distinct from, the legal and sanctions advice that others provide. The war-risk dimension of the same voyage is addressed in Strait of Hormuz: war risk, safe passage and charterparty disputes.