Iran Shipper Evades U.S. Blacklist
Iran's state shipping company has changed the names and ownership of most of its vessels to evade U.S. sanctions, but the Treasury Department has yet to update the blacklist that U.S. companies use to verify they are in compliance, according to a new report. As a result, some firms are at risk of doing business with the company, Islamic Republic of Iran Shipping Lines, despite a ban that has been in place since 2008, says the report by the Wisconsin Project on Nuclear Arms Control, a Washington-based nonprofit watchdog.
The findings raise questions about the effectiveness of some of Washington's sanctions, which are aimed at pressuring the regime in Tehran not to build nuclear weapons?something Iran denies it is doing.
"Iran has made more of an effort to circumvent the sanctions imposed on IRISL than the United States has made to enforce them," the report states. "This pattern must change if sanctions are to be effective."
A Treasury official said the Office of Foreign Assets Control, the Treasury Department's financial sanctions enforcement arm, was aware of the vessel name and ownership changes.
OFAC Director Adam J. Szubin said his agency "deliberates carefully about the timing of its public designations," adding, "We may choose to delay a public identification to allow for additional surveillance or to secure cooperation with foreign allies."
Mr. Szubin also said the Iranian company's actions signaled the sanctions were having an effect. "Since its designation [by the Treasury], IRISL has taken a number of steps to mask its commercial activities and disguise the ownership of its ships. IRISL's attempts to deceive third parties are consistent with its past practices, and a measure of the impact that U.S. sanctions have had."
IRISL officials in Germany and Iran didn't respond to requests to comment. Bak Sahraei, a spokesman for Iran's mission to the United Nations in New York, said of the report's accusations that the company has tried to evade sanctions: "This is just an allegation, and this mission does not confirm it."
The U.S. has implemented a number of financial sanctions on Iran, including asset freezes. The Wall Street Journal reported Monday that the asset freezes are surprisingly small, less than $43 million in the U.S. and about $1.4 million in Switzerland.
"We think OFAC in general does a good job," said Valerie Lincy, who edits the Wisconsin Project's IranWatch.org. "This is an enormous task, obviously."
The Treasury Department added IRISL, its vessels and related entities, to a list of blacklisted Iranian companies in September 2008, accusing it of shipping military-related cargo, including a chemical used in missiles, to Iran's defense ministry, through deceptive techniques. IRISL's cargoes are subject to inspection under a U.N. Security Council resolution. Tehran also faces sanctions by the U.N. and the European Union.
Mr. Szubin said at a briefing then that the department would update its list of sanctioned Iranian entities "if we see IRISL changing the names of its vessels."
The Wisconsin Project report says IRISL has since renamed at least 80 of the 123 vessels in its shipping fleet?often dropping the word "Iran"?but that Treasury's current published list used by U.S. companies continues to include the old names.
For example, the Iran Matin was renamed the Abba, and the Iran Kermanshah was changed to the Acena, the report states, citing proprietary shipping registries.
Some changes were made over a year ago: A bank compliance officer listed some of them in April 2009 on a forum at the Web site BankersOnline.com.
IRISL's vessels still carry the same unique ship-identification numbers required of all ships, but these numbers don't always appear on cargo documents, the Wisconsin Project reported.
The report also states that IRISL, in another apparent sanctions-avoiding technique, has been transferring ownership of its ships to shell companies that don't appear on OFAC's list.