Treasury Hammers Iranian Shipper

October 29, 2010

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The U.S. Treasury Department this week extended sanctions against Iran's national shipping company, the Islamic Republic of Iran Shipping Lines (IRISL) - blacklisting 37 front companies and five individuals that have helped IRISL evade U.S. sanctions. Iran uses IRISL and its affiliates "to advance its illicit weapons of mass destruction program and to carry military cargo," according to Treasury.

This welcome move by Treasury comes some six months after the Wisconsin Project described how IRISL, in the wake of U.S. sanctions imposed in September 2008, had undertaken a large-scale relabeling of its ships, giving them new names, new managers and new "owners." In a report published on April 9 ("Smooth Sailing for Iran's Blacklisted Fleet"), the Project argued that Treasury had failed to keep up with these changes and was not adequately enforcing its own sanctions. The report called on Treasury "to discover and publish changes to IRISL vessel names and ownership, and […] to add to its blacklist front companies created for the purpose of evading sanctions." With this week's action, Treasury has done so.

The Project's report explained how IRISL had been transferring nominal ownership of its blacklisted ships to shell companies based mainly Malta, Germany and Hong Kong. IRISL (Malta) Limited, an entity designated by Treasury in 2008, was now sharing office space with a host of newly formed companies, including Kerman Shipping Company, Tongham Shipping Company, Uppercourt Shipping Company and Vobster Shipping Company. These companies were added to Treasury's blacklist on October 27, along with Woking Shipping Investments Limited, which is located at the same address in the Maltese city of Sliema. Mansour Eslami, director of IRISL (Malta) Limited, and Ahmad Sarkandi, the director of several IRISL front companies based on Malta, were also blacklisted.

Similarly, the Project described how IRISL Europe GmbH, based in Hamburg, was now home to a number of newly-formed shipping companies - "Seventh Ocean GmbH and Co.," "Eleventh Ocean GmbH and Co." and "Twelfth Ocean GmbH and Co." - that each owned a single blacklisted IRISL ship. Treasury has now designated over two dozen holding and shipping companies at IRISL Europe's Hamburg address, along with Mohamad Talai, the individual who manages many of these companies, and Naser Bateni, managing director of IRISL Europe GmbH.

The U.S. action was taken pursuant to Executive Order 13382, which freezes the assets of these firms under U.S. jurisdiction and bans all transactions with U.S. parties. In all, Treasury has now designated nearly 70 IRISL front companies and affiliates. The ban also extends to each company's owned or controlled subsidiaries or sub-units, including individual marine vessels. Treasury so far has identified some 150 ships that are owned by IRISL or its affiliates. In June, the Department updated its list with the new names of 71 IRISL vessels it had previously sanctioned, as called for (and named) by the Project in its April report. U.S. banks have been instructed to reject any funds transfer referencing the name of a banned ship. Freight forwarders and shippers are also forbidden from chartering, booking cargo on, or otherwise dealing with the blacklisted vessels.