US Sanctions Vast Iranian Shipping Network, Issues Guidance
The Treasury’s Office of Foreign Assets Control announced sanctions on a shipping network that moves hundreds of millions of dollars of oil for Iran, Treasury said in a Sept. 4 press release. The network includes dozens of ship managers, ships and “facilitators” overseen by Rostam Qasemi, a senior Iranian military official and the country’s former minister of petroleum. The sanctions target 16 entities, 10 people and 11 ships.
As part of the announcement, the State Department is offering a reward of up to $15 million for information that may lead to further disruption of Iran’s Islamic Revolutionary Guard Corps and their revenue sources, Brian Hook, the State Department’s special representative for Iran and a senior adviser to Secretary Mike Pompeo, said during a Sept. 4 press conference.
“We announced new sanctions today, we did sanctions yesterday, we did sanctions Friday,” Hook said, referencing recent OFAC sanctions against an Iranian oil tanker (see 1909030049) and three Iranian space agencies (see 1909030054). “There will be more sanctions coming. We can’t make it any more clear that we are committed to his campaign of maximum pressure and we are not looking to grant any exemptions or waivers.”
OFAC also released a shipping advisory about the “significant” sanctions risks involved with shipping oil from Iran. The advisory contains a list deceptive shipping practices by Iran, how companies can mitigate risks and an annex of ships that were added to OFAC’s Specially Designated Nationals List for sanctions violations.
Iran routinely falsifies cargo and vessel documents to hide the fact that its shipments are coming from Iran, the advisory said. Treasury said the network has already moved more than 10 million barrels of oil worth more than $500 million in 2019, mostly to Syria. Iranian officials are doing this by deceiving customers into buying Iranian oil by passing it off as Iraqi-origin cargo, Treasury said. Treasury urged companies to verify “bills of lading, certificates of origin, invoices, packing lists, proof of insurance and lists of last ports of call.”
Iranian ships are also often involved in illegal ship-to-ship transfers and frequently disable their automatic identification system (AIS), allowing them to travel undetected, Treasury said. Ship owners involved in these activities change the names of their vessels, Treasury added, stressing that companies should research a ship by its International Maritime Organization number instead of just its name.
In addition, Treasury said companies should strengthen sanctions compliance programs by using measures “consistent with Financial Action Task Force standards,” monitor “AIS manipulations,” review all “applicable shipping documentation” before following through on a purchase, and use “organizations that provide commercial shipping data, such as ship location, ship registry information, and ship flagging information” to avoid sanctions violations.
Iran is not only shipping oil. In an effort to find more revenue, the Iranian network is also diversifying its exports with iron and other metals industries, Treasury said. The network charters tankers and transports metal goods, such as steel rebar, to several countries, including Syria and China, Treasury said.