U.S. Treasury Warns Financial Institutions of Sanctions Risks from Chinese 'Teapot' Oil Refineries
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued a warning to financial institutions regarding the sanctions risks associated with Chinese 'teapot' oil refineries. These refineries, primarily located in Shandong Province, are heavily involved in importing and refining Iranian crude oil. China is responsible for purchasing approximately 90% of Iran's oil exports, with these teapot refineries playing a significant role. The revenue generated from these activities is believed to support the Iranian regime, including its weapons programs and military. Some of these refineries have reportedly used the U.S. financial system for dollar-denominated transactions and to procure U.S. goods. OFAC's alert advises financial institutions to implement risk-based controls, conduct enhanced due diligence, and clearly communicate sanctions compliance expectations to correspondent banks. The alert also highlights evasion tactics such as the use of front companies, intermediary brokers, ... 
