Risk factors
Other risks
4
the purchase or acquisition of petroleum, petroleum products or
petrochemical products from Iran, or (ii) materially assisting, sponsoring
or providing financial, material, or technological support for, or
goods or services in support of, the National Iranian Oil Company, the
Naftiran Intertrade Company (“NICO”), or the Central Bank of Iran.
There is no provision in Executive Order 13622 that modifies the
aforementioned “Special Rule”. In addition, Executive Order 13622
contains an exception for the Shah Deniz gas field pipeline project,
in which TOTAL (10%) and NICO (10%) participate, to supply
natural gas from the Shah Deniz gas field in Azerbaijan to Europe
and Turkey. This Executive Order was amended and expanded by
Executive Order 13645 (discussed in further detail below), in order
to capture as potentially sanctionable conduct a wider range of
petroleum-related activities. TOTAL does not conduct activities that
it believes would be sanctionable under Executive Order 13622 as
amended by Executive Order 13645.
which, in addition to amending Executive Order 13622 as discussed
above, implements certain provisions of IFCA and authorizes
additional sanctions against, amongst other things, foreign financial
institutions that engage in certain transactions, potentially including
those for the sale, supply, or transfer to or from Iran of natural gas,
and for the purchase of petroleum or petroleum products from Iran.
TOTAL does not conduct activities that it believes would be
sanctionable under IFCA, NDAA 2012 or Executive Order 13645.
Also with regard to Iran, France and the EU have adopted measures,
based on United Nations Security Council resolutions, which restrict
the movement of certain individuals and goods to or from Iran as
well as certain financial transactions with Iran, in each case when
such individuals, goods or transactions are related to nuclear proliferation
and weapons activities or likely to contribute to their development.
In July and October 2010, the EU adopted new restrictive measures
regarding Iran. Among other things, the supply of key equipment and
technology in the following sectors of the oil and gas industry in Iran
are prohibited: refining, Liquefied Natural Gas, exploration and
production. The prohibition extends to technical assistance, training
and financial assistance in connection with such items. Extension of
loans or credit to, acquisition of shares in, entry into joint ventures with
or other participation in enterprises in Iran (or Iranian-owned enterprises
outside of Iran) engaged in any of the targeted sectors also is prohibited.
Moreover, with respect to restrictions on transfers of funds and on
financial services, any transfer of at least €40,000 or equivalent to
or from an Iranian individual or entity shall require a prior authorization
of the competent authorities of the EU Member States. TOTAL
conducts its activities in compliance with these EU measures.
On August 10, 2012, President Obama signed into law the Iran Threat
Reduction and Syria Human Rights Act of 2012 (“ITRA”), which,
amongst other things, amended ISA and CISADA. ITRA, like CISADA
before it, expanded both the list of activities with Iran that could
lead to sanctions and the list of sanctions available. Amongst other
things, ITRA authorized sanctions for (i) the provision to Iran of goods,
services, technology, information or support above a certain market
value that could directly and significantly facilitate the maintenance
or expansion of Iran’s domestic production of refined petroleum
products, including any direct and significant assistance with the
construction, modernization, or repair of petroleum refineries or
infrastructure directly associated with petroleum refineries, (ii)
participation in a joint venture established on or after January 1, 2002
with respect to the development of petroleum resources outside of
Iran where either the Government of Iran is a substantial partner or
investor or where the joint venture could enhance Iran’s ability to
develop petroleum resources in Iran, and (iii) owning, operating,
controlling or insuring a vessel used to transport crude oil from Iran
to another country. ITRA also contains an exception for the Shah
Deniz gas field project. TOTAL does not conduct activities that it
believes would be sanctionable under ITRA.
On January 23, 2012, the Council of the EU prohibited the purchase,
import and transport of Iranian oil and petroleum and petrochemical
products by European persons and by entities constituted under
the laws of an EU Member State. Prior to that date, TOTAL had
ceased these now-prohibited activities.
With respect to Syria, the EU adopted measures in May 2011 with
criminal and financial penalties that prohibit the supply of certain
equipment to Syria, as well as certain financial and asset transactions
with respect to a list of named individuals and entities. These measures
apply to European persons and to entities constituted under the laws
of an EU Member State. In September 2011, the EU adopted further
measures, including, notably, a prohibition on the purchase, import
or transportation from Syria of crude oil and petroleum products.
Since early September 2011, the Group ceased to purchase
hydrocarbons from Syria. On December 1, 2011, the EU extended
sanctions against, among others, three state-owned Syrian oil firms,
including General Petroleum Corporation, TOTAL’s co-contracting
partner in the production sharing agreement signed in 1988
ITRA also added Section 13(r) to the Securities Exchange Act of
1934, as amended (“Exchange Act”), which requires TOTAL to
disclose whether it or any of its affiliates has engaged during the
calendar year in certain Iran-related activities, including those targeted
under ISA, without regard to whether such activities are sanctionable
under ISA, and any transaction or dealing with the Government of
Iran that is not conducted pursuant to a specific authorization of
the U.S. government (see point 3.9.2., below). For any annual
report that contains responsive Section 13(r) disclosure, an “Iran
Notice” is separately filed with the United States Securities and
Exchange Commission (“SEC”). The SEC must notify the President
and U.S. Congress, and the President must initiate an investigation
and make a sanctions determination within 180 days after initiating
the investigation. TOTAL believes that its Iran-related activities
required to be disclosed by Section 13(r) are not sanctionable,
and TOTAL has not been informed that it is at risk of possible
imposition of sanctions for activities previously disclosed.
(
Deir Es Zor licence) and the Tabiyeh contract. The United States also
has various measures regarding Syria. Since early December 2011,
the Group has ceased its activities that contribute to oil and gas
production in Syria.
In addition, the U.S. Treasury Department’s Office of Foreign Assets
Control (referred to as “OFAC”) administers and enforces economic
sanctions programs, some of which are based on the United Nations
Security Council resolutions referred to above, against targeted
foreign countries, territories, entities and individuals (including those
engaged in activities related to terrorism or the proliferation of weapons
of mass destruction and other threats to the national security,
foreign policy or economy of the United States). The activities that
are restricted depend on the sanctions program and targeted country
or parties, and civil and/or criminal penalties, imposed on a per
transaction basis, can be substantial. These OFAC sanctions
The United States has adopted other sanctions measures, including
the National Defense Authorization Act of Fiscal Year 2012 (“NDAA
2012”),which authorizes the imposition of sanctions on foreign financial
institutions engaged in certain transactions, the Iran Freedom and
Counter-Proliferation Act of 2012 (“IFCA”), which, amongst other
things, authorizes the imposition of sanctions on entities that knowingly
provided goods or services to the energy, shipbuilding, and shipping
sectors, or to port operations, of Iran, and Executive Order 13645,
Registration Document 2013. TOTAL
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