OFAC (the Office of Foreign Assets Control, the US Treasury bureau that administers sanctions) issued General Licence V on 24 April 2026 alongside the SDN designation of Hengli Petrochemical (Dalian) Refinery Co., Ltd., authorising a 30-day wind-down of US-person and US-dollar transactions with the refinery. That clock runs out at the end of Sunday 24 May. From Monday, any non-US bank that processes a single Hengli dollar payment becomes exposed to secondary sanctions and loses its US correspondent access.
Hengli is China's second-largest independent refinery and the first mainland Chinese refinery OFAC has designated; earlier rounds carefully avoided mainland targets and routed designations through Hong Kong, UAE and Marshall Islands shells. MOFCOM (China's Ministry of Commerce) closed the legal gap on 2 May with Announcement No. 21, directing Hengli and four sister refineries (Luqing, Jincheng, Xinhai, Shengxing) to disregard the US sanctions under China's 2021 Blocking Rules. MOFCOM and OFAC now collide on the same dollar wire from Monday morning.
Hengli Petroleum, the refinery's Singapore trading arm, has begun laying off staff in anticipation of the shutdown, Manifold Times reported1. The corporate-level retreat sits oddly against Beijing's posture: Iran's appointment of a new ambassador to Beijing on 18 May was briefed as 'unprecedented' commitment to the China relationship, and MOFCOM's blocking statute is engineered for exactly this enforcement moment. Hengli Petroleum Singapore began layoffs at the trading desk on 20 May regardless.
The nearest precedent is OFAC's April 2018 designation of Rusal, Russia's largest aluminium producer. Aluminium prices spiked roughly 35 per cent in three weeks; Glencore and other counterparties unwound positions within days; the sanctions forced the removal of Oleg Deripaska's controlling stake before the wind-down expired. The transmission mechanism was dollar clearing, not trade flows, which is why the Singapore layoffs are the operational tell. General Licence V is the only Iran-touching US instrument with a working clock; every other lever, from the unfiled Murkowski AUMF to the oral Pentagon order, runs on Trump's verbal track. OFAC's wind-down clock cannot be postponed by a Truth Social post.
