Spokesman's Comments on Reuters Report on IRISL Attempting to Evade Sanctions in Singapore

February 17, 2012

In response to media queries on Reuters' report "Iran's Global Cat-and-Mouse Game on Sanctions" dated 15 February 2012, the MFA Spokesman said:

"The Reuters story contains several inaccurate assertions. The reporter has, whether willfully or out of ignorance, failed to understand the issue and indeed has confused several important legal points. In so doing, it has implied that Singapore is not compliant with its United Nations (UN) obligations. Singapore takes a serious view of its international obligations and enforces all UN Security Council sanctions against Iran. A clarification of the issues is attached."

Clarification of legal inaccuracies contained in Reuters' report "Iran's Global Cat-and-Mouse Game on Sanctions" dated 15 February 2012

Reuters appears to have conflated the unilateral sanctioning of the Islamic Republic of Iran Shipping Lines (IRISL) by certain jurisdictions such as the United States, with the issue of United Nations (UN) member states' obligations under the UN Security Council Resolutions (UNSCRs) on Iran.

2 For example, in referring to the seizure in Singapore of three IRISL ships in 2010 for failing to meet their credit arrangements (the "Sahand case"), Reuters quotes selectively from a UNSCR on Iran and states that "The UN embargo orders IRISL assets be frozen, including those of "any person or entity acting on their behalf or at their direction, and to entities owned or controlled by them"." This is a misrepresentation of the relevant UNSCRs.

3 These UNSCRs do not require the freezing of IRISL's assets. They only require the freezing of assets of specific IRISL entities as listed in Annex III of UNSCR 1929 (2010), namely, (i) Irano Hind Shipping Company, (ii) IRISL Benelux NV, and (iii) South Shipping Line Iran. The assets of IRISL itself are not targeted by the UNSCRs. This is abundantly clear from the text of Paragraph 19 of UNSCR 1929 (2010), which reads:

"Decides that the measures specified in paragraphs 12, 13, 14 and 15 of resolution 1737 (2006) shall also apply to the entities of the Islamic Republic of Iran Shipping Lines (IRISL) as specified in Annex III and to any person or entity acting on their behalf or at their direction, and to entities owned or controlled by them, including through illicit means, or determined by the Council or the Committee to have assisted them in evading the sanctions of, or in violating the provisions of, resolutions 1737 (2006), 1747 (2007), 1803 (2008) or this resolution;" [emphasis added]

(Paragraph 12 of UNSCR 1737 (2006) is the paragraph which deals with the assets freeze. IRISL is also not among the entities designated under UNSCR 1737(2006).)

4 It is therefore factually incorrect on Reuters' part to report that "The UN embargo orders IRISL assets be frozen..."

5 Reuters further alleged that the Singapore High Court had ruled in the Sahand case that, even if the UNSCRs applied to IRISL, "they did not imply that commercial assets such as ships should be seized". This is a misrepresentation of the High Court's decision. The High Court ruled that the UNSCR "does not require the impounding or detention of vessels owned or controlled by the designated IRISL entities". There was no mention of other commercial assets in the High Court's ruling.

6 Furthermore, Reuters neglected to report that the High Court came to this ruling after observing that the relevant European Union regulation and United Kingdom Treasury notice implementing the UNSCR expressly provide that the obligation to freeze assets does not require the impounding or detention of vessels and also that there has been no known case of ships being impounded or detained in Singapore or elsewhere, pursuant to the UNSCRs. The High Court's Grounds of Decision in the Sahand case is a matter of public record.

7 Elsewhere in the Reuters report, Reuters asserts that "A United Nations resolution forces all states to inspect IRISL's cargo." Again, Reuters has taken licence in its interpretation of UNSC resolutions.

8 The relevant provision is operative paragraph 14 of UNSCR 1929 (2010) which "Calls upon all States to inspect, in accordance with their national authorities and legislation and consistent with international law, in particular the law of the sea and relevant international civil aviation agreements, all cargo to and from Iran, in their territory, including seaports and airports, if the State concerned has information that provides reasonable grounds to believe the cargo contains items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737 (2006), paragraph 5 of resolution 1747 (2007), paragraph 8 of resolution 1803 (2008) or paragraphs 8 or 9 of this resolution, for the purpose of ensuring strict implementation of those provisions;"

9 This is a call on states to inspect cargo to and from Iran if there are reasonable grounds to believe the cargo contains prohibited items. It is not an obligation that "forces all states to inspect IRISL's cargo" as suggested by Reuters. Nevertheless, Singapore has instituted measures to exercise vigilance against Iranian-linked vessels, including those connected to IRISL, and is continually looking at how those measures can be improved.

10 To reiterate, Singapore takes a serious view of its international obligations and enforces all UNSC sanctions against Iran.