by Claire Jungman
The Islamic Republic of Iran has pursued a wide range of deceptive practices in the shipping industry to evade international sanctions on Iranian oil products. The regime’s deceptive shipping activities compromise the safety and integrity of the international maritime industry.
U.S. sanctions impose penalties on individuals and entities that knowingly engage in significant transactions for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran – or knowingly provide significant support to an Iranian person on the Office of Foreign Assets Control (OFAC)’s List of Specially Designated Nationals and Blocked Persons (SDN List), such as the National Iranian Oil Company (NIOC) and the National Iranian Tanker Company (NITC). These sanctions apply to ship group and registered owners, managers, operators, brokers, ship chandlers, flag states, port operators, shipping companies, freight forwarders, classification service providers, commodity traders, insurance companies (protection and indemnity (P&I) clubs), and financial institutions. These entities should therefore be aware of the deceptive shipping practices used by Iran to evade sanctions. Additional details regarding sanctions on Iran’s shipping and oil industry can be found in the appendix.
Iranian schemes and deceptive practices to evade sanctions have become increasingly widespread and complex. In response, UANI developed its own ship tracking methodology to detect these practices and obtain an accurate account of Iran’s crude oil, gas condensates, and petrochemical exports.
This report provides an explanation of the different types of deceptive shipping schemes that Iran exploits and demonstrates how such activities can be detected by analyzing vessel traffic data, or Automatic Identification System (AIS) data, and satellite imagery.
The report also provides a history of Iran’s fraudulent shipping practices via selected case studies to illustrate methods of evasion and deception, including the use of various ‘spoofing’ techniques and Iran’s manipulation of vessels’ AIS data. The report concludes with policy recommendations on how to counter Iran’s illicit activities at sea and prevent the regime from evading international sanctions, including by strengthening due diligence measures.
Cargos traded in breach of international and national trade sanctions are on the rise. Some of the techniques used to evade sanctions have been used for several years, while others are newer and have become more prevalent over the last few years. These techniques aim to minimize surveillance and detection through confusion or concealment of vessels’ identities, cargo, geographical location, and navigational activities. Such concealment poses risks for all maritime industry players who may inadvertently be involved in transporting a sanctioned cargo.
The cases identified in this report highlight the numerous loopholes and vulnerabilities in the maritime industry that allow Iran to engage in deceptive shipping practices. Every case identified in this report was reported to the respective flag state, classification society, and P&I club by UANI. UANI’s reporting of these cases demonstrates real challenges to the maritime industry’s due diligence protocols.