Iran Risk Matrix

Uncovering the Chinese Purchasers of Iranian Oil [UPDATED May 1, 2024]

Claire Jungman and Daniel Roth — Wed, 01 May 2024 22:15:29 +0000

China is principally responsible for keeping the Iranian regime in business through oil purchases that have totaled over $90 billion since President Biden assumed office in January 2021 to December 2023. Four in every five barrels of exported Iranian oil go to China. This is despite U.S. sanctions that were reimposed in 2019 and maintained under the present administration, with the stated aim of reducing Iranian oil exports to zero. China has proven the savior of Tehran by continuing to import millions of barrels of oil every single day, and imports have likely even exceeded those made when the trade was not subject to U.S. sanctions.

While UANI has pinpointed more than 300 foreign oil-carrying “Ghost Armada” ships facilitating the trade, it has been difficult to identify the specific buyers. However, UANI obtained documentation offering major insights into the demand side of this illicit and uniquely lucrative trade. This resource provides granular and regularly updated information on the Chinese purchasers of Iran’s oil.

The Purchasers

Data received and reviewed by UANI shows that Iranian oil is being imported by China’s officially non-state, semi-independent “teapot” petrochemical refiners. Teapots were originally permitted to import crude, subject to centrally imposed quotas, starting in July 2015. Since then, China’s economic planning agency, the National Development and Reform Commission (NDRC), has granted tens of new licenses annually. Estimates of the number of teapots hover around 150.

Today, the teapots import approximately one-fifth of all China’s oil needs. Around 70% of China’s teapot oil processing takes place in the eastern coastal province of Shandong, south of Beijing and north of Shanghai. For Iranian oil purchases, the teapots manage to buy at steep discounts—at least $4 a barrel below benchmark Brent. The Iranian origin of oil is also concealed by rebranding as either Omani Crude, Iraqi Crude, Russian Urals, Bitumen Blend, Nemina, or Malaysian Blend.

The fact that teapots—rather than major state actors—are importing the bulk of Iranian oil makes sense from China’s perspective. Since the U.S. has, in fact, sanctioned Chinese state-owned imports in the past, such as Zhuhai Zhenrong, the decision to import Iranian oil via dozens of small, unaffiliated “non-state” firms helps obscure the Chinese government’s role and protect its own big firms from scrutiny, accountability, and attendant sanctions. By contrast, with their small size and limited business operations, teapots are both hard to uncover and not exposed to the U.S. financial system. In conjunction with the lack of U.S. enforcement, the threat of sanctions is, therefore, far less of a constraining factor.

Available data - through March 2024 - shows the top teapot refinery purchasing Iranian crude is Qingdao-based Lawen Namu Petroleum Trading Co. Ltd. (Lawen Namu). Lawen Namu received at least 29 different shipments of Iranian crude oil, branded as crude, Oman crude, or Nemina. Together these shipments totaled approximately 39 million barrels of Iranian oil. UANI wrote to Lawen Namu in February 2023.

Lawen Namu is a trading company based at the key port of Qingdao in Shandong province. In January 2021, S&P Global noted that Lawen Namu’s oil imports had “jumped 212%” from the previous month, while it classified most of its imports as “blended grades” from Oman, West Africa, and Russia.”

The second biggest teapot importer is Shangang Guomao, which has received 20 different shipments of Iranian crude oil, branded as “Crude, Forties, Malaysia or Bitumen Blend.” Together these shipments have totaled more than 33.5 million barrels of Iranian oil. Kedama, which appears to be formally identified as Qingdao Kedama Energy Trading Co. Ltd, is third. Founded in June 2022, Kedama is a relative newcomer to Shandong’s burgeoning petrochemical trading scene.

Fourth is Shandong Dongfang Hualong Industry & Trade Group Co Ltd. (Hualong). Hualong has received at least 26 shipments of Iranian crude branded as Urals, Mal Blend, Oman or Blue Laser. Together these shipments totaled more than 28.6 million barrels of Iranian oil.

Fifth on our list is Shandong Shengxing Chemical Co., Ltd. (Shandong Shengxing), located on the northern coast of Shandong province. According to Global Trade Alert, Shandong Shengxing was granted its import license on May 23, 2018, perhaps not coincidentally, just two weeks after President Trump announced the U.S. withdrawal from the Iran nuclear deal (JCPOA). Shengxing has received at least 28 different shipments of Iranian crude, branded as Oman crude, and Iraqi crude oil. Together these shipments totaled approximately 26.3 million barrels of Iranian oil. UANI wrote to Shandong Shengxing in February 2023.

In addition to documentation obtained by UANI, the Wikiran website cites a further six teapot refineries - Lihuayi Lijin Refining & Chemical Co. Ltd Shandong Tianhong Chemical Co. Ltd Henan Fengli Petro-Chemical Co. Ltd Shandong Kenli Petrochemical Co. Ltd Qirun Group Co. Ltd Dongying Lianhe Petrochemical Group Co. Ltd. (Fuhai Group) – reportedly accounting for a monthly delivery of four million barrels over a one year period and in apparent collaboration with the Turkish energy giant, ASB Group. The full table of teapot refiners importing Iranian oil is listed in descending order from largest importer by barrels below. UANI will continue to update this chart as we receive more information on the purchasers of Iranian oil in China [Table Updated April 30, 2024]

Refinery	Number of Shipments	Branded/Rebranded As	# of Barrels	Vessels Involved
LAWEN NAMU	29	Crude, Oman and Nemina	39,785,151	FENG TAI, HERA 1, HECATE, ANTHEA, MEMPHIS, ALANA, BOREAS, ELSA, NEREIDES, RHEA, ACHELOUS, FJORD SEAL, SAKARYA
SHANGANG GUOMAO	20	Crude, Forties, Malaysia and Bitumen Blend	33,590,557	GLORY FOREVER, ELOISE (EX: SIMBA), ANSHUN II, CARINA V, PROGRESS V, BREEZE V, PHOENIX I, TITAN, ASTERIX, ROMA, YANNIS, LYDIA II, FIONA, LEONOR
KEDAMA	20	Nemina and Mal Blend	28,956,771	HERA 1, MEMPHIS, FENG TAI, TIMMIUS, ELSA, ACHELOUS, ANTHEA, LYDIA II, NEREIDES, PRATIKA, RHEA
HUALONG	26	Urals, Mal Blend, Oman and Blue Laser	28,636,803	SPIRIT OF CASPER, PHOENIX I, ELOISE (EX: SIMBA), ALTUS, LEOPARD, IVY, PRADA , BERG 1, YONG XING SHUN HANG, ANNICK, ROMA, AYDEN, GALAXY STAR, LUNA LAKE, YANNIS, RIQUEZA
SHANDONG SHENGXING	28	Oman, Iraq, Bitumen Blend and Mal Blend	26,288,971	MARTINA, VORAS,ANASTASIA I, CHOLA QUEEN, AVENTUS I, BERG 1, REMY, BRAVA LAKE, ALTUS, NS CREATION, RANI, NYANTARA,PANDORA, EVERSHINE, AYDEN, OTARIA, GALAXY STAR, PUTRI SAMUDRA, MARIANNE
QIHANG YUANYANG/QIHANG ENERGY	16	Fujairah and Mal Blend	24,377,206	PENTA I, UZOR, TIMIMUS, CATHAY PHOENIX, VETER, ELVA, TREND, IRISES, NIERUS, ARTURA, CATHAY KIRIN, PRADA,
JINCHENG	12	Oman, Bitumen Blend, Mosa, Crude and Belayim	21,174,868	ASTERIX, TIBURTINA, CARINA V, LIANA, MONOCEROS, NATALINA 7, SELENE, CATHAY PHOENIX, PHONIX, LUNA PRIME, LADY SOFIA, WEN YAO
XINTAI	22	Malaysia, Nemina, Bitumen Blend, ESPO, Oman and Fuel Oil	19,377,648	CHOLA QUEEN, MARTINA, RANI, BRIGHT SONIA, SPIRIT OF CASPER, ANASTASIA I, SHANAYE QUEEN, AVENTUS I, BRAVA LAKE, PANDORA, EVERSHINE, OCEAN HERMANA, GLORY FOREVER
YUEYANG GUANSHENG	10	Bitumen Blend and Fuel Oil	14,865,455	AVITAL, LYDIA II, INNOVA, PALMER, SPIRIT OF CASPER, BERG 1, ELVA, FIONA, ARTEMIS III, VIGOR
GEA	11	Mal Blend and Nemina	14,597,216	EMILIA, LADY SOFIA, AFRODITA I, PENTA I, ALTUS, REX 1, JOLIE, BLISSFUL SEA, SPAR
SHENCHI	14	Mal Blend	13,895,535	BRIGHT SONIA, PRADA, DOLPHIN, INNOVA, SPIRIT OF CASPER, QUEEN SERE, VOLANS, ELVA, GALAXY STAR, LEONOR, AFRODITA I, SPAR, EVERSHINE
YINGYU ENERGY	9	Mal Blend, Oman and Urals	13,011,671	OTARIA, AMAK, GLORY FOREVER, PHOENIX I, BERG 1, PALMER, NIERUS, TIFANI, ALTUS
GUANGHUI KAINENG	9	Mal Blend	11,195,848	EVERSHINE, MEMPHIS, MS ANGIA, ATILA, IVY, LYDIA II, MARIANNE, SAVA
XINYUE	10	Crude and Mal Blend	9,611,297	PALMER, ABYSS, QUEEN SERE,BRIGHT SONIA, MS ANGIA, PANDORA, GALAXY STAR, NYANTARA, OCEAN HERMANA
KELIDA	9	Crude, Oman, Iraq, Mal Blend and Nemina	8,716,385	CLYDE NOBLE, EMILIA,INNOVA, LADY SOFIA, ANITA, ELVA, OTARIA, GULF VENTURE
QIRUN	7	Mal Blend	8,410,923	PALMER, QUEEN SERE, VIGOR, SPAR, INNOVA, SPIRIT OF CASPER, SHALIMAR
LUQING	5	Mal Blend	7,625,065	ANNICK, IONA, IRISES, MEHLE, SELENE
DONGMING	5	Fuel Oil,Mal Blend and Crude	6,255,250	PALMER, ATILA, DIMITRA II, SPIRIT OF CASPER, OCEAN HERMANA
MEIJIANENG	5	Oman, Mal Blend and Bitumen Blend	6,423,348	ELOISE, ACHELOUS, ISAIAH, SNOW LOTUS, ABYSS
XIN RUI JI	3	Mal Blend	4,966,408	BOREAS, MUR, STATICE
BANFU ENERGY	3	Mal Blend, Nemina	4,732,148	ANTHEA, ALANA
QICHENG	4	Oman, Bitumen Blend, Malaysia Blend	4,364,232	PANDORA, INNOVA, YANNIS, ATILA
ZHONGKANG/ZHONGYANG INTERNATIONAL	2	Mal Blend & Fuel Oil	4,003,824	IVY, ELYSIA
HENGLI PETROCHEMICAL	3	Crude	3,982,379	HEBE, SCORPIUS, GALAXY STAR
FURONGKANG	3	Crude, Oman & Mal Blend	3,804,369	IVY, BRIGHT SONIA, FIONA
YINGKE	3	Fuel Oil & Mal Blend	3,215,930	LADY LUCY, ROMA, ANNICK
HANKUN ENERGY	2	Light Crude and Malaysian Blend	3,141,882	ALANA, PHONIX
GANGRUN	2	NEMINA	3,096,726	MEMPHIS, ACHELOUS
HAIKE	3	Mal Blend	3,076,029	PANDORA, ANNICK
LITU FENGYUAN	2	Mal Blend	2,978,665	SERENE 1, KASPER
YEUYANG GUANSHENG	2	Bitumen Blend and Mal Blend	2,974,386	HORNET, LEONOR
XINRUN INTERNATIONAL	2	Mal Blend	2,945,139	PANDORA
OCEANIC	5	Bitumen Blend, TBA	2,923,916	PHOENIX I, DOLPHIN, INGRID, TELSA
HAIWANGDA	2	Bitumen Blend, Mal Blend	2,651,910	BRIGHT SONIA, IVY
HUAJIN XIANGRUN	4	Mal Blend	2,639,642	PHOENIX I, PABLO , MARTINA, ROMA
XINCHI	2	Bitumen Blend and Fujairah	2,221,568	SKADI, NESS
XINRUIJI	1	Mal Blend	2,083,670	BELLA 1
CHANGFENG	1	Mal Blend	2,042,323	PUTRI SAMUDRA
SAIDI	1	Fujairah Blend	2,042,266	VIRGO
CISM	1	Mal Blend	2,012,558	PENTA I
QINGHANG ENERGY	1	Fujairah	2,007,772	PAPA
XIANNENG	1	Bitumen Blend	1,999,219	SCORPIUS
GUANGDONG HONGHANG	1	Crude	1,994,565	PAPA
QINGGANG QULIU	1	Mal Blend	1,980,791	ANNICK
ZHONGYOU YIHAI	1	Fuel Oil	1,972, 160	WIN WIN
LZVHOU	1	Mal Blend	1,921,461	ABUNDANCE III
HAO KUN	1	Bitumen Blend	1,921,423	PENTA I
YATAI ENERGY	1	Malaysian Blend	1,919,096	SELENE
QINGAO KERUI	1	Bitumen Blend	1,907,070	VIGOR
ZHONGLIAN HARUI	1	Malaysian Blend	1,856,190	DUPLIC DYNAMIC
KAIDING	1	Crude	1,843,156	BOREAS
HUAYOU	2	Mal Blend and Crude	1,810,641	EVERSHINE, DOLPHIN
SINOCHEM CHANGHE	2	Bitumen Blend, Oman	1,722,944	BERG 1, EVERSHINE
DAQI CHEMICAL	2	Condensate and Crude	1,609,034	TOMIE, NARCISSUS
ZHONGYOU RUNHAI	2	Mal Blend	1,575,234	IVY, CHOLA QUEEN
GAIDA	2	Crude	1,534,340	ELOISE, FENG TAI
XINZHUOYUE	2	TBA	1,501,419	ANASTASIA I, BRIGHT SONIA
YISHENGXIANG	1	Mal Blend	1,501,419	NIERUS
DINGQIAN	2	Bitumen Blend and Mal Blend	1,468,1133	NYANTARA,OCEAN HERMANA
OCEAN PARK	2	Mal Blend, Nemina	1,377,266	ALANA, PHOENIX I
DAOYANG	2	Bitumen Blend	1,136,828	CIMARRON, SPAR
CHAMBROAD	2	Bitumen Blend	1,291,249	EVERSHINE , BRIGHT SONIA
RONGHAI	2	Crude, Mal Blend	1,228,102	COLOSSUS, SAMSUN
HEBEI XINHAI	2	Crude & Mal Blend	1,240,603	PABLO,URGANE I
YINGJIRUI	1	Nemina	1,125,532	MEMPHIS
TAIFENG HAIRUN	2	Crude	1,104,875	DOLPHIN, PRADA
QINGYUAN	2	Nemina	1,093,771	MEMPHIS
ZHEJIANG WUCHAN	1	Bitumen Blend	1,078,153	MEMPHIS
JULI	1	Mal Blend	1,065,341	GLORY FOREVER
KAIYI PETROCHEMICAL	1	Bitumen Blend	1,035, 729	SPAR
RUNCHENG	2	Bitumen Blend	1,034,667	TALOSA, HORNET
ZHONGCHEN	1	Bitumen Blend	1,014,631	GABRIELLE
HENGFENG	1	Mal Blend	973,389	INNOVA
HAIRUN SHENGDE	2	Bitumen Blend and Mal Blend	1,731,354	TIBURTINA, NYANTARA
DONGYING HONGXIANG	1	Mal Blend	935084	AYDEN
GUANGJIN SHUNHE	2	Bitumen Blend	848,326	MARTINA, RANI
WANTONG	1	Crude	842,920	CRESTED
DINGYI	1	Oman	740,349	ALBA SUN
HAIYUE ENERGY	1	Mal Blend	737,437	NYANTARA
SHENGJU YUAN	1	Bitumen Blend	726,864	MARTINA
JINAN ZONGBAO	1	Bitumen Blend	723,421	HERMOSA
LIANRUN	1	Mal Blend	722,780	PHOENIX I
HUANHAI ENERGY	1	Singma	719,500	GULF VENTURE
YUANTONG ZHENGDAO	1	Mal Blend	718,064	ABYSS
CGN	1	Mal Blend	717,867	CLYDE NOBLE
SHILONG	1	Crude	711,301	NYANTARA
BEI ANG SI	1	Mal Blend	703,286	HESTIA
ZHOUSHAN JIAOTOU	1	Bitumen Blend	691,500	GULF VENTURE
HANYUAN ENERGY	1	Crude	684,399	URGANE I
XINHAN	1	Crude	609,009	ABYSS
LIANHONG	1	Condensate	605,163	SUPER EVER
ZHONGJIAO	1	Crude	512,117	JAKA TARUB
SHANGNENG	1	Bitumen Blend	505,250	DOLPHIN
GUANGZHOU RUBIO	1	Mal Blend	500,000	MS ANGIA
HONGRUN	1	Mal Blend	496,900	CIMARRON
EDEN	1	Mal Blend	419,403	DOLPHIN
REMIS TRADING	1	Oman	265,900	AVENTUS I

Total	392		479,777,102

*reportedly not affiliated with Sinochem Holding

(Credit: Reuters Muyu Xu)

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Business Risk

Tanker Tracking

The Switch List: Tankers Shift From Carrying Iranian Oil to Russian Oil

Claire Jungman and Daniel Roth — Wed, 01 May 2024 06:10:51 +0000

Updated: May 1, 2024

On December 5, 2022, the G7, the European Union, and Australia agreed to a $60-per-barrel price cap on Russian seaborne crude oil. The G7 price cap allows non-EU countries to continue importing seaborne Russian crude oil, but prohibits shipping, insurance, and reinsurance companies from handling cargoes of Russian crude around the globe, unless it is being sold for less than the price cap. EU countries have separately implemented an embargo that prohibits them from purchasing seaborne Russian oil. In an attempt to overcome these curbs on the country’s oil, Russia has established its own shadow fleet of tankers. These are mostly older vessels, many of which have experience working with sanctioned regimes such as Iran. Since the Russian invasion of Ukraine began in February 2022, more than 92 vessels previously involved in helping Tehran export Iranian oil are now helping Moscow transport Russian oil or petroleum products.

UANI first predicted that Russia would turn to the “Ghost Armada” to keep the crude flowing to its Chinese partner in May 2022. Since then, the number of tankers that have made the switch has grown.

The “switch list” is below, and UANI will publish monthly updates:

IMO	Vessel Name	Flag
9410234	AFRODITA I	PANAMA
9213313	ALBEDO (EX: ALITA I)	GABON
9354521	ANHONA	BELIZE
9306457	ANNABELLE	MARSHALL ISLANDS
9281683	ANTHEA	COMOROS
9218181	ATLANTIS MZ (EX: TOMIE)	PALAU
9280873	AVENTUS I*	PANAMA
9236353	BLUE (EX: JULIA A)	ANTIGUA & BARBUDA
9199127	BOREY G	PANAMA
9232876	BRAVA LAKE	PANAMA
9213296	BRIGHT SONIA	PANAMA
9137648	CARUZO	COOK ISLANDS
9229439	CERES I	SAO TOME & PRINCIPE (FALSE)
9257802	CHOLA QUEEN	PANAMA
9238052	CLIO	PANAMA
9282792	CLYDE NOBLE	PALAU
9247986	CRESTED*	PANAMA
9273052	DANICA (EX: AFRA CROWN)*	GABON
9240885	EAST 1	HONG KONG
9277747	ELISE	LIBERIA
9418078	ELIZA II	PANAMA
9216717	ELIZABET	CAMEROON
9189952	EM UNITY	SAN MARINO
9258870	EMILIA	PANAMA
9265744	EVERSHINE (EX: CHAO XING)*	CAMEROON
9513139	FJORD SEAL (EX: FEYHA N)	PANAMA
9235725	FUGA BLUEMARINE	PANAMA
9337389	GLAUCUS	COMOROS
9363833	GOBY	VIETNAM
9259599	HAI II	LIBERIA
9162916	HANA	TANZANIA
9259185	HEBE	COMOROS
9326720	HERA	VIETNAM
9304356	HERA 1*	COMOROS
9227443	INNOVA	VIETNAM
9183271	IONA (EX: CALYPSO)	CAMEROON
9249324	IZUMO (EX: CATHAY PHOENIX)	GABON
9283801	JADEAR (EX: ACHELOUS)	PANAMA
9198094	JOEL (EX: JOLIE)	PALAU
9224295	JUDY II	SAO TOME & PRINCIPE (FALSE)
9315654	KAPOK	PANAMA
9312896	KRASNOYARSK (EX: NS CREATION)	RUSSIA
9341512	LADY LUCY (EX: DELPHI)	LIBERIA
9247792	LALIQUE (EX: GABRIELLE)	PANAMA
9258882	LEGEND	VIETNAM
9284594	LEOPARD	VIETNAM
9266750	MAGIC LADY	LIBERIA
9220938	MARBEL	COOK ISLANDS
9254915	MARTINA*	PANAMA
9189146	MEMPHIS	COMOROS
9281891	MEROPE	PANAMA
9257137	MIN HANG (EX: AURIGA)	COOK ISLANDS
9249312	MISCA	PANAMA
9231767	MISSION (EX: CAMELIA)	ANTIGUA & BARBUDA
9296810	MISSONI	PANAMA
9257993	MISTRAL 1	PANAMA
9232931	NARCISSUS	PANAMA
9242120	NYANTARA	PANAMA
9286229	OCEAN HERMANA	PANAMA
9268112	OLIA (EX: ARC 1)	GABON
9187227	OMEGA	CAMEROON
9234642	ORBIT I	PANAMA
9131357	ORION	CAMEROON
9301524	PALMER*	VIETNAM
9284582	PANDA	VIETNAM
9282481	PRIAPUS	PANAMA
9316701	PROGRESS V	PANAMA
9250907	RANI*	PANAMA
9237228	RHEA	COMOROS
9240407	ROANA	PANAMA
9144782	ROBON (EX: TURBA, PELICAN)	CAMEROON
9524463	SAKARYA	PANAMA
9396725	SAN REMO (EX: ALNIC MC)	LIBERIA
9436006	SAMSUN (EX: PARAMOUNT)	PANAMA
9308778	SATINA (EX: AMELIA)	PANAMA
9264893	SCORPIUS	PANAMA
9270517	SEAGULL	PANAMA
9242118	SHANAYE QUEEN	MALAYSIA
9328716	SHARP OCEAN	PANAMA
9230971	SKADI	PANAMA
9259733	SNOW LOTUS	PANAMA
9263643	SONA STAR	COOK ISLANDS
9342786	SUNSEA	VIETNAM
9277761	SUPER EVER	PANAMA
9248813	TALOSA	HONG KONG
9231509	TREND	BELIZE
9247780	TURACO	PANAMA
9187435	VERGIOS	BELIZE
9233349	VESNA	BELIZE
9422988	VOLANS	BARBADOS
9336414	VOLTA RIVER (EX: FREEDOM)	PANAMA
9247431	WILMA II (EX: REMY)	PANAMA

* Indicates the vessel has been switching between transporting both Iranian and Russian cargoes.

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Tanker Tracking

Business Risk

Hezbollah’s Lifeline to the Islamic Republic: Bank Saderat

Jack Roush — Wed, 27 Mar 2024 18:21:29 +0000

It’s no secret that the Islamic Republic of Iran’s support is critical in facilitating the activities of Hezbollah, one of its most powerful proxies. According to the terrorist organization’s general secretary, Hassan Nasrallah, “everything it eats and drinks, its weapons and rockets, comes from the Islamic Republic of Iran.” Along with arms and supplies, the Islamic Republic also provides hundreds of millions of dollars each year to fund Hezbollah’s global operations – which span Europe, Latin America, and the Middle East. Much of this funding is transferred through illicit means, including smuggling gold, trafficking drugs and arms, or via third-party donors.

However, a significant amount of Hezbollah’s funding is funneled through ostensibly commercial banks that are affiliated with the Islamic Republic and operate in Lebanon. The most important of these is Bank Saderat, one of Iran’s largest banks. Bank Saderat alone has transferred tens of millions of dollars per year to Hezbollah since 2001, acting as an important lifeline through the organization’s war against Israel and Lebanon’s economic collapse. Since that time, such transfers have occurred through clearing funds through Bank Saderat to Hezbollah’s financial arm, al-Qard al-Hasan, or through wire transfers through third parties. Despite coming under heavy scrutiny in the past for involvement in the Islamic Republic’s malign activities, Bank Saderat’s continued connections to Hezbollah have gone largely unabated in recent years. Further action is clearly required from both the United States and its allies.

The United States first recognized Bank Saderat’s role in terror financing in 2006, in a public statement by then-Undersecretary of the Treasury Stuart Levey. This statement was accompanied by a comprehensive ban on the bank’s activities in the U.S. financial market. In 2007, this ban was followed by additional measures, as executive orders designated the bank as an entity tied to the Islamic Republic. Soon thereafter, Bank Saderat came under international restrictions. A resolution adopted by the United Nations Security Council in 2008 imposed travel bans and asset freezes on Bank Saderat executives due to its involvement in violating anti-proliferation statutes. The European Union similarly listed the bank as an entity involved in the Iranian nuclear program in 2010, which was upheld following legal opposition.

Despite these efforts to identify Bank Saderat’s involvement in malign activities and impose punitive measures, these U.S., UN, and EU restrictions either expired or were otherwise removed following the implementation of the Joint Comprehensive Plan of Action in 2015. These moves were partly enabled by Greece’s efforts to block attempts at renewing sanctions against the bank. After restrictions were removed, Bank Saderat returned to western financial hubs, including London, Frankfurt, and Paris. Rather than inhibiting the Islamic Republic’s malign activities, the JCPOA allowed entities like Bank Saderat to expand their operations and increase their revenue – to the benefit of Hezbollah and other terrorist organizations.

Since the U.S. withdrawal from the JCPOA in 2018, moves to draw attention to and restrict Bank Saderat’s terrorist financing activities have resumed. A few months after the withdrawal took place, the U.S. reimposed sanctions on banks connected to the Islamic Republic, including Bank Saderat. Due to its involvement in facilitating Hezbollah’s terrorist operations, the U.S. Department of Justice has also opened the door for Americans to seek legal action against the bank. In addition to actions taken by the U.S., the G7 Financial Action Task Force has issued guidance for state authorities to exercise vigilance over Bank Saderat, monitoring its clients and transactions. Additionally, the Canadian Security Intelligence Service has exposed that Bank Saderat illegally wired money through third-party entities in Canada, with the funds channeled to terrorist organizations like Hezbollah.

Ultimately, all these actions are inadequate in preventing Bank Saderat from financing Hezbollah. The organization continues to plot terror operations around the world and conducts military strikes on civilian targets strikes civilian targets. Western states like France, Canada, Germany, Italy, Greece, and the United Kingdom should follow the U.S. and sanction Bank Saderat after immediately suspending its operations as a key first step. Lebanon should also be pressed to ban the bank, following the precedent set after the Iraqi government suspended the operating licenses of other Iranian banks. Members of the Lebanese government have called for such action since 2017. In response, other officials have claimed to be monitoring Bank Saderat’s activities – but this approach has clearly been unsuccessful. Finally, the U.S. must continue to target Hezbollah’s international funding network, particularly in the western hemisphere. Failure to act on each of these fronts will further enable Hezbollah and only embolden the Islamic Republic.

Jack Roush is a research associate at United Against Nuclear Iran (UANI) and a PhD candidate in International History at the London School of Economics and Political Science. He is on Twitter @RoushJackW.

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Hezbollah

Business Risk

Panama’s Controversial Re-Flagging of Sanction-Violating Vessels: Prioritizing Profit Over Principles

Claire Jungman — Wed, 16 Aug 2023 17:43:50 +0000

The case of the Panama Maritime Authority’s re-flagging of vessels previously de-flagged by other nations due to Iran sanctions violations serves as a stark illustration of economic interests overshadowing ethical obligations. Notably, Panama is not only infamous for re-flagging but also for flagging vessels that violate sanctions. These decisions contradict the essence of the Registry Information Sharing Compact (RISC) agreement and, in turn, enable Iran’s illicit activities with devastating consequences that cannot be justified by financial gains.

The RISC agreement stands as a powerful testament to the importance of international cooperation in curbing sanctions evasion through maritime trade. RISC brings together countries committed to sharing vital information about vessels involved in sanctions-violating activities. Member nations, including Panama, Marshall Islands, Liberia, St Kitts & Nevis, Comoros, Honduras, and Palau, collaboratively share information about vessels engaged in sanctions-violating activities. The objective is clear: prevent these vessels from exploiting maritime freedom to further their rogue agendas.

Panama, renowned for having the world’s largest ship registry, is a part of the RISC agreement, thereby aligning itself with the collective mission against sanctions evasion. However, Panama’s re-flagging decisions raise significant concerns about its dedication to this shared cause. By re-flagging vessels that were previously de-flagged by responsible nations due to Iran sanctions violations, Panama appears to prioritize profit over its international obligations.

Some Examples of Panama’s Re-Flagging Instances:

REMY (IMO: 9247431) – Formerly known as EASTERN PRIDE. Following notification from UANI, the Liberian International Ship Registry (“LISCR”) responsibly withdrew the flag for the vessel due to possible sanctions breaches and violation of the Liberia Maritime Law/Regulations. RISC members were informed of the vessel’s investigation and subsequent cancellation, yet Panama decided to re-flag the vessel.
TURACO (IMO: 9247780) – Formerly known as DATURA. Following notification from UANI, LISCR responsibly withdrew the flag for the vessel due to possible sanctions breaches. RISC members were informed of the vessel's investigation and impending cancellation, yet Panama decided to re-flag the vessel.
LEONID (IMO: 9198771) – Following notification from UANI, the Palau International Ship Registry withdrew the flag for the vessel due to possible sanctions breaches. Despite this, Panama made the decision to re-flag the vessel.

By offering its flag to these vessels, Panama assists Iran in its sanctions-evading activities. It is important to note that Panama is not solely entangled in re-flagging controversies. The nation has earned a reputation for flagging vessels that blatantly violate sanctions, allowing them to continue their illicit activities with a veneer of legitimacy. This practice underscores Panama's role in perpetuating Iran's sanctions-evasion strategies, further tarnishing the integrity of international sanctions enforcement.

Permitting vessels to use the Panama flag enables Iran to discreetly export its oil, sidestepping international sanctions. The revenue generated from these oil sales is a lifeline for Iran’s nuclear program, funds human rights abuses, and financially supports terrorist activities worldwide. Panama’s re-flagging decisions contribute to these severe consequences, undermining the broader global effort to maintain security and stability.

As the world navigates multifaceted challenges, the choices of individual nations hold immense significance. Panama’s re-flagging choices are a troubling example of profit trumping principles. These actions erode the collaborative spirit of international agreements like RISC and cast doubts on the effectiveness of global sanctions enforcement.

In a landscape where security, diplomacy, and economics intersect, striking a balance between economic interests and ethical responsibility is paramount. The repercussions of Panama's choices extend beyond its own borders, influencing global security and stability. Addressing this issue necessitates a unified commitment to transparency, ethical accountability, and the spirit of international agreements. The choice before Panama is clear: Will it persist in prioritizing profit over ethical behavior, or will it align itself with the principles of international cooperation and security?

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London Blacklists Russia’s Banks, Iran’s Get Green Light

Daniel Roth — Wed, 16 Mar 2022 18:03:51 +0000

In the wake of Vladimir Putin’s invasion of Ukraine, Britain moved decisively against all Russian banks, freezing $336 billion (£258 billion) - a bigger assets freeze than any other country including the U.S.

This is laudable and yet throws Britain’s contrastingly limp policy against Iranian banks into sharp relief. There are more Iranian bank branches operating in London’s ‘square mile’ financial district than any other city outside Iran: three are within spitting distance of the Bank of England. And all are sanctioned by the United States for their terror ties.

Iran’s Bank Saderat is literally across the street from The Old Lady of Threadneedle Street. One of Iran’s top three state-owned banks, Bank Saderat has helped the Iranian regime funnel money to multiple terrorist proxies, including Hamas, Hezbollah and Palestinian Islamic Jihad.

Immediately next door is Persia International Bank plc (PIB), formerly known as Iran Overseas Investment Bank. Its two shareholders are Bank Mellat and Tejarat Bank, both designated by the U.S. Treasury’s Office of Foreign Assets Control (OFAC). Bank Mellat has facilitated the movement of millions of dollars for Iran’s nuclear program since 2003 and while the UK ceased business with them in 2009, its PIB subsidiary continues to operate on British soil.

A ten minute stroll away, Londoners will find Bank Sepah plc, which has provided “direct and extensive financial services” to Iran’s ballistic missiles and development agencies including Aerospace Industries Organization (AIO) and its subsidiary, Shahid Hemmat Industrial Group (SHIG).

Further west in well-heeled Kensington is Melli Bank plc, the most malignant of all. Bank Melli was sanctioned by the U.S. in 2018 for its support of Iran’s notorious Islamic Revolutionary Guard Corps (IRGC) and billions of dollars equivalent in funds have flowed through IRGC-controlled accounts at Bank Melli.

Since the mid-2000s, Bank Melli increasingly provided services to Iranian military-related entities as they became further involved in all aspects of the Iranian economy. The IRGC-Quds Force has used Bank Melli to dispense funds to Iraqi Shia militant groups, and Bank Melli’s presence in Iraq was part of this scheme.

These Shia militant groups include the notorious Iran-sponsored terror group, Kataib Hezbollah, whose leader Abu Madhi al-Mohandes was killed in the same drone strike that neutralized Qasem Solemani in 2020. In March 2020, Kataib Hezbollah missiles targeted a military base 17 miles north of Baghdad. The attack killed three—two Americans and one British soldier—and injured at least 14 others.

Kataib Hezbollah is responsible for “some of the most lethal attacks against U.S. and coalition forces throughout the [Iraq War].”

Not surprisingly, each of these institutions are subject to U.S. secondary sanctions, which are targeted at firms outside U.S jurisdiction.

London’s Iran Banks– Bank Saderat and Persia International Bank are located directly opposite Britain’s central bank. Bank Sepah is 0.3 miles south. Melli Bank is 5 miles west. (Credit: Google Maps)

And yet London’s Iranian banks proudly flaunt their British bona fides. All proclaim to be authorized by the Prudential Regulatory Authority (PRA), regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FCSA). This cloak of legitimacy provides these institutions with the cover they need to funnel capital to the world’s leading sponsor of terror. They represent a financial as well as a moral hazard to the unsuspecting British public and UK firms alike, who may easily misunderstand that these banks are not normal reputable institutions.

Starting with Iran’s rogue banks, it is high time for Boris Johnson and Foreign Secretary Liz Truss to display the same sense of moral purpose against Tehran as they have shown against Moscow.

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Is COSCO At It Again?

Claire Jungman and Daniel Roth — Tue, 15 Mar 2022 13:10:06 +0000

Back in September 2019, the U.S. State Department announced sanctions on five Chinese companies for purchasing Iranian oil, including two entities owned by China Oil Shipping Company (“COSCO”), a Chinese state-owned shipping company headquartered in Shanghai. According to the accompanying press statement, all of the entities had imported Iranian oil to U.S. persons, transacted in U.S. dollars, or otherwise engaged in sanctioned activities involving U.S. persons or services. The two COSCO companies were designated under secondary sanctions “for knowingly engaging in a significant transaction for the transport of oil from Iran.”

The designations sent shockwaves through shipping markets with confusion about whether they applied to the parent company’s vast fleet of more than 1,000 ships. But after four months of negotiations, the U.S. Office of Foreign Assets Control (“OFAC”) eventually removed one of the entities, COSCO Shipping Tanker (Dalian) Co., Ltd, from its list of Specially Designated Nationals (“SDN”) on January 31, 2020. According to Reuters, “A U.S. Official said lifting sanctions on only one of the COSCO subsidiaries would allow the Trump administration to retain leverage on China and COSCO to stop taking Iranian oil.”

Regardless of whatever legal wranglings were waged to secure the COSCO firm’s removal from the SDN List, it appears that COSCO has not stopped its Iran activities. It has just found more creative ways to hide its involvement.

On February 15, 2022, UANI identified two crude oil tankers engaged in a ship-to-ship (“STS”) transfer of Iranian crude oil in waters east of Singapore. UANI strongly suspects the vessels involved were LATIN VENTURE (formerly known as PACIFIC BRAVO) (IMO: 9206035) and FT ISLAND (formerly known as CCPC VANGUARD) (IMO: 9166675). During the dates of the suspected STS transfer, FT ISLAND had its AIS transponder turned off. On February 17, 2022, the vessel reappeared just east of where the STS transfer occurred.

(Source: Marine Traffic)

Similarly, LATIN VENTURE, which loaded crude oil from Kharg Island, Iran, on January 27, 2022, had its AIS transponder turned off during the STS transfer. The vessel reappeared on February 18, 2022, just south of where the STS transfer occurred.

(Source: Marine Traffic)

The name PACIFIC BRAVO might ring a bell for tanker watchers. That's because in August 2019, the U.S. publicly identified the vessel for carrying Iranian oil. A U.S. government official even warned ports in Asia not to allow the ship to dock, saying that it was carrying Iranian crude in violation of U.S. economic sanctions. At that time, LATIN VENTURE and FT ISLAND were linked to Kunlun Shipping Company Limited, one of the sanctioned COSCO firms that the U.S. sanctioned on September 25, 2019.

Fast forward to 2022. The vessels have changed names and ownership, but it is not certain they have dropped their ties to COSCO. Indeed an analysis of the vessels’ ownership and operator details indicates they are still connected. Since November 2019, FT ISLAND has been operated by Asia Affluence Ltd, a subsidiary of Xu D, doing business at Unit 2507, 25th Floor, COSCO Tower, Grand Millenium Plaza, 183, Queen’s Road Central, Hong Kong, China.

(Source: IHS Maritime)

Asia Affluence Ltd shares an address, including floor and suite number, with ten other companies, one of which is United Amity Ltd, a subsidiary of COSCO Shipping Tanker Dalian. Could COSCO be using Asia Affluence Ltd as a front company for its Iran activities?

(Source: IHS Maritime)

In a May 14, 2020 memorandum, Guidance to Address Illicit Shipping and Sanctions Evasion Practices, the U.S. warned that Iran, North Korea, and Syria, exploit complexities surrounding the global shipping industry through the use of “complex business structures, including involving shell companies and/or multiple levels of ownership and management, to disguise the ultimate beneficial owner of cargo or commodities in order to avoid sanctions or other enforcement action, among other reasons.” Perhaps China has learned from those three countries and adopted similar tactics to conceal its activities.

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One Obvious Move to Help Classification Firms Cut Loose Rogue Ships

Claire Jungman and Daniel Roth — Wed, 02 Feb 2022 18:58:54 +0000

UANI’s shipping campaign has been widely successful in compelling the world’s leading maritime classification societies to strip rogue ships of their certifications. Absent such accreditations guaranteeing a vessel’s seaworthiness, a tanker is barred from entry to foreign ports and may not secure insurance cover. Since the world’s top 12 classification societies are “essential to the running of thousands of vessels in the global shipping fleet,” this has had a profound impact. Smuggling has become far more difficult and risky for Iran and its ocean-going enablers.

And yet Iran still goes to extraordinary lengths to conceal illicit shipping commerce (manipulation and spoofing of AIS transponders). This means the list of bad marine actors remains long.

One obvious remedy has been suggested by the classification societies themselves, and it is clear many would like to do more. After all, it is their reputations on the line too. Last month London-based Lloyds Register explained to UANI:

"Our ability to withdraw or suspend class, in accordance with these express terms, is made much easier if a relevant state authority imposes sanctions on the vessel, its registered owner or managing agent having found, based on evidence held by, or presented to, the state concerned, that the vessel has breached applicable sanctions laws."

In other words, more sanctions ought to be levied by the U.S. and other jurisdictions to trigger the declassification of rogue operators. UANI’s directory of vessels operating as Iran’s ‘ghost armada’ must be the first group for sanctions consideration.

The evidence for their rogue behavior is compelling and meticulously documented but in many cases classification societies are hesitant to proceed with declassification. A clear sanctions label for individual ships and their owners and agents – following the normal procedures of due diligence by U.S. authorities – would immediately uncork the bottleneck.

Both Lloyd’s Register and the American Bureau of Shipping (ABS) have taken our alerts seriously to potentially sanctionable activities involving their respective classed vessels by initiating investigations and expelling vessels found to be engaged in smuggling. Last week, as reported by Reuters, ABS declassified two vessels, KARO and ELSA, after UANI’s solicitations. KARO transported over 9 Million barrels of Iranian oil to China in 2021 while ELSA loaded Iranian petroleum on three separate occasions:

"In a Dec. 21 letter to UANI, seen by Reuters, ABS said that after completing an independent investigation it had found "material evidence" that on or about Dec.8 the Elsa had "engaged in illicit transshipment operations with an Iranian tanker" and had as a result cancelled all classification services. ABS said in another letter on Jan. 14 it had completed a separate independent investigation of the Karo and also cancelled all certification services associated with it."

Clearly, many private classification societies are eager to comply with and even augment sanctions regimes, but need the U.S. to do more to enable them to act decisively. Even in the case of ABS, it took several months and rounds of correspondence for the much-needed declassifications.

As well as adding individual sanctions to vessels and their direct owners and managers, we have extensively advocated for the U.S. to broaden the range of sanctionable maritime services. This would permit the U.S. Treasury Department to punish other entities - importing agents, management firms, charterers, operators, marine insurers, vessels and all other “maritime services providers” - directly and willfully found to be helping Iran. Doing so now is more essential than ever. Iran is exporting its oil and natural gas to countries like China and Venezuela at an alarming rate.. Finally and crucially, the U.S. should also encourage other countries to follow its lead and issue guidance for all companies involved in maritime trade, as the U.K.’s Office of Financial Sanctions Implementation (OFSI) has done. Public authorities and private firms, which are evidently keen to support U.S. policy objectives, must work together if we are serious about staunching the illicit flow of Iranian oil.

###

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Hezbollah Imports Iranian Fuel for Lebanon

Claire Jungman and David Daoud — Wed, 15 Sep 2021 20:04:46 +0000

In August, Lebanon’s Central Bank Governor Riad Salameh announced an end to its fuel subsidies, which have drained the bank’s reserves since the country began descending into a financial crisis. The move, which was expected to cause already high fuel prices to quadruple, plunged Lebanon further into collapse. Shortly thereafter, the Lebanese government partially reversed Salameh’s decision, raising fuel prices by the comparatively low 66% instead, in a partial reduction of fuel subsidies. But this was only a partial fix, and a temporary one at that. The Lebanese government essentially had to borrow against its 2022 budget to continue this partial subsidization of fuel.

The detrimental impact of the rise in fuel prices has far-reaching implications for Lebanon. Long queues of customers are now regular sights at Lebanese gas stations, each waiting in line to fill up their gas tanks. Desperation has even resulted in killings over the increasingly scarce commodity. With no public transportation to speak of, fuel shortages have impacted unemployment rates, which are almost at 40 percent. The fuel shortage has also forced further cutbacks in Lebanon’s already-anemic supply of electricity. As a result, even hospitals have reduced their activities, and the country’s supply of potable water has also become jeopardized. Without electricity, supermarkets, restaurants, and private homes have been unable to store food, resulting in increased cases of food poisoning. Hospitals and the medical sector, which have already been forced to reduce their activities due to the electricity shortage, have been stretched to their breaking point.

Hezbollah has stepped in to help alleviate the impact of this latest Lebanese crisis. The group’s Secretary-General Hassan Nasrallah had been offering to import fuel for Lebanon from Iran to combat the country’s energy shortages since June of 2020, claiming this would additionally alleviate the country’s dollar shortages because Tehran was willing to accept Lebanese Liras – instead of increasingly scarce dollars – for its fuel. He reiterated this proposal on March 18, 2021, saying he had not waited for permission from Lebanese officials to facilitate the deal. “I went and spoke to the Iranians, and they’re ready to supply Lebanon with fuel,” he claimed.

Now, Hezbollah seemed ready to deliver. On August 19, Nasrallah announced that the first ship – identified as National Iranian Tanker Company (NITC) owned and operated tanker FAXON (IMO: 9283758), carrying 280,000 barrels of Iranian diesel/gas oil, had set sail for Lebanon. Nasrallah had been promising to do precisely that since June 8, when he vowed that “if [Lebanon’s] fuel crisis continues without a solution, Hezbollah will buy ships of fuel from Iran and bring them to Beirut Port,” challenging the Lebanese government “to prevent the delivery of gasoline and diesel to the Lebanese people.”

Within a week of announcing that the first Iranian fuel ship had set sail for Lebanon, Nasrallah said Tehran had agreed to send two additional fuel ships to Lebanon. The second ship is most likely the NITC owned and operated tanker FOREST (IMO: 9283760). Based on satellite imagery, from September 15, 2021, the vessel FOREST is anchored in the Red Sea near the Iranian ‘spy-ship’ SAVIZ along with the Iranian crude oil tanker LOTUS (IMO: 9203784). FOREST departed Iran’s Shahid Rajaee port on August 29, 2021, and is estimated to be carrying around 265,000 barrels of Iranian oil.

(Source: ESA via Sentinel Hub)

The third tanker is believed to be the FORTUNE (IMO: 9283746). FORTUNE, also owned and operated by NITC, began loading at Shahid Rajaee Port on September 14, 2021.

FAXON, FOREST, and FORTUNE are the same three Iranian-flagged tankers that were part of a fleet of five tankers that have brought Iranian gasoline to Venezuela on numerous occasions since May 2020. Following the deliveries to Venezuela, the United States sanctioned the captains of all five ships used to make the deliveries.

After almost three weeks of silence on the fate of the ships, Nasrallah announced on September 13 that the first of the three ships – the FAXON – had docked in Syria’s Banias Port the night before, and on September 14, it began discharging its cargo from at Bandar Mahshahr, Iran. He said the fuel would be transported to Lebanon’s Beqaa Valley by Thursday, where it would be “stored in specific fuel tanks in Baalbek,” one of the group’s stronghold cities.

According to Lebanese fuel importers and private generators, the FAXON’s cargo would only cover the country’s needs for three days. Nasrallah addressed this in his September 13 speech, saying, “we wanted to set priorities. Of course, the amount [of fuel we imported] won’t cover all of Lebanon’s needs, because we don’t want to enter competition with other companies. We’re capable of doing this, and I will comment on this later.” In the meantime, Nasrallah laid out Hezbollah’s plan to deliver targeted batches of the imported fuel to specific sectors, in two consecutive phases: a humanitarian phase during which fuel would be distributed for free, followed by a phase where the fuel would be sold. Nasrallah also said that the fuel – whether gifted or sold – would be delivered in batches, “in order to maximize benefit, we won’t give a requested full month’s supply upfront.”

Nasrallah said the first phase would have a “humanitarian” focus and would last between September 16-17 and October 16-17. Hezbollah plans to offer fuel “as a free gift” to help satisfy “all or part of” the needs of “public hospitals… nursing homes… orphanages…special needs homes, public water institutions…[poor] municipalities with wells, as well as firefighters, the civil defense, and the Lebanese Red Cross” for a month. During this month-long “humanitarian” phase, Nasrallah said the group would not reach out to the institutions in question but would wait for them to contact Hezbollah to receive fuel.

During the second phase, which would start after October 16-17, Nasrallah said the group would begin selling fuel “for an appropriate price” to private hospitals, drug and serum laboratories, drug and serum factories, grain mills, bakeries, supermarkets and coops, food industry factories, farming, and the owners of generators providing electricity subscriptions. For the time being, he noted, Hezbollah would not sell fuel on an individual basis, “but in the future, of course we will sell to individuals, particularly as the winter season approaches.”

As for the sale price, Nasrallah said Hezbollah would sell at lower than the total cost of purchasing and transporting the fuel. “We don’t want to make a profit, and we’re going to bear a specific portion of the cost, and we’ll consider it a gift to help the Lebanese people from the Islamic Republic of Iran and Hezbollah.” Nasrallah didn’t set the exact fuel price in his speech, saying that it would depend on the prices set by Lebanon’s Ministry of Energy. He noted that Hezbollah would announce that price by Thursday, September 16, at the latest, and that in any case, the group would sell the fuel in exchange for Lebanese Liras, not dollars.

Nasrallah said the responsibility for fuel distribution would devolve upon Amana Fuel Co., which, as he noted, has been designated by the U.S. Treasury Department. Amana Fuel Co. is one of many subsidiaries belonging to Atlas Holding SAL, also a designated entity, which is in turn controlled by Hezbollah’s Martyr Association, which itself ultimately answers to the group’s Executive Council.

Malek Yaghi, the head of Hezbollah’s “Fuel Office” in the Beqaa, appeared in a video shortly thereafter, explaining the group’s fuel distribution. Yaghi said the “convoy of victory” carrying the fuel to “break the [American] siege on Lebanon” would enter the country from Syria through the Beqaa Border Crossing. He said the convoy’s cargo would fill “dozens” of designated fuel tanks, whose contents would be distributed by Amana Fuel Co. According to Yaghi, Amana would set up Call Centers, where fuel orders could be placed.

Amana Fuel Co. listed the numbers of five such “call centers,” Lebanon’s 25 districts where fuel requests could be placed: the first call center would serve Beirut, and the Baabda, Aley, and Chouf districts in of the Mt. Lebanon Governorate, in the country’s center. The second call center would serve the districts of Tyre, Marjayoun, Bint Jbeil, and Hasbaya in south Lebanon. The third call center is designated to serve the Nabatieh, Sidon, Western Beqaa, Rachaya, and Jezzine districts, covering the rest of south Lebanon and the Beqaa Valley. The fourth call center will serve the districts of Baalbek and al-Hermel, which are Hezbollah strongholds in northeastern Lebanon, and Zahle, in the northern Beqaa Valley. The fifth call center will serve the districts of Northern Metn, Jbeil, Tripoli, Keserouan, Zgharta, Bcharre, Batroun, Koura, Dinieh-Al-Miniah, and Akkar, covering the northern portions of Mt. Lebanon, northward.

Per Yaghi, these call centers will collect the requisite information from potential fuel recipients and submit the orders to the corresponding stations belonging to Amana Fuel Co., which would then deliver the requested fuel. Yaghi also reiterated Nasrallah’s claim that Hezbollah had designated an oversight team to ensure that the fuel would only be delivered to institutions that were truly in need, and not to groups or individuals intending to hoard the materials or re-sell it on the black market.

The arrival of the FAXON’s shipment at Banias Port was met with notable silence from the U.S. administration, despite sanctions on Iran’s exportation of fuel, as well as sanctions on the FAXON itself. The only comment from U.S. officials on the matter came on August 19, when U.S. Ambassador to Lebanon Dorothy Shea effectively gave tacit U.S. approval for Hezbollah’s importation of fuel.

Ambassador Shea told Al-Arabiya at the time that she didn’t believe Lebanon needed fuel from Iranian tankers, citing “a whole bunch” of other tankers anchored off the country’s coast waiting to offload their cargo. Ultimately, she said, “Lebanon can do whatever it wants,” adding that, “I don’t think anyone is going to fall on their sword if someone’s able to get fuel into hospitals that need it.” Shea’s only objection was to note that “the Lebanese people deserve importers of fuel to distribute it equitably,” asking, “can you count on Hezbollah to do that?”

Whether Hezbollah will indeed distribute its Iranian-supplied fuel fairly remains to be seen. At the moment and at least on paper, however, the group's distribution plan seems to aim for equitable distribution, even considering the preferential treatment, which Hezbollah’s partisans and apparatchiks are almost certainly receiving. That’s not to say that the group has transformed into a humanitarian organization overnight. From a purely pragmatic standpoint, Hezbollah has an interest in preventing Lebanon’s further descent into chaos. Not necessarily because it has suddenly discovered some long-lost sense of Lebanese patriotism, but because further collapse will have a detrimental impact on the group’s fortunes and its ability to continue its military, political, and social growth. Chaos is not conducive to expansion.

Moreover, Hezbollah is interested in placating a periodically restive Lebanese street, including its supporters, who are suffering under the increasing weight of Lebanon’s unraveling. Periodically, fingers of blame for the crisis are pointed at Hezbollah, which risks eroding its support base over time. To survive the economic upheaval that has roiled Lebanon for almost two years, the group has been feeding its supporters a steady stream of propaganda, blaming all of the country’s woes on a “financial siege” by the United States, and positioning itself as Lebanon’s would-be savior. But propaganda won’t keep the lights on. To survive with minimal loss of supporters, Hezbollah will have to show that it – and not its foes among the protesters or political opponents – can act, deliver on its promises, and do so responsibly.

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The Role of Classification Societies in Stopping Maritime Malpractice

Claire Jungman and Daniel Roth — Wed, 19 May 2021 18:32:20 +0000

It appears that many classification societies – which certify a vessel’s seaworthiness – are starting to heed last year’s official guidance on maritime malpractice and sanctions.

In May 2020, the U.S Coast Guard, State and Treasury Departments issued its “Guidance to Address Illicit Shipping Practices and Sanctions Evasions Practices.” This was an important document, especially in addressing the true bane of sanctions evasion at sea: the disablement of Automatic Identification System (AIS) tracking satellites.

In a section addressed specifically to classification societies, it advised that they consider:

Requiring contractual language that describes AIS disablement and manipulation inconsistent with SOLAS [International Convention for the Safety of Life at Sea] and activity prohibited by sanctions as of the contract date as grounds for termination of the contract and removal and denial of services. Additionally, parties could incorporate contractual language that prohibits transfers of cargo to clients that are not broadcasting AIS or have an AIS history that indicates manipulation inconsistent with SOLAS.

Not surprisingly, AIS disablement is an everyday occurrence in the context of Iranian oil shipping. (To be clear, AIS disablement is supposed to happen only in the very narrowest of circumstances and well-defined zones of piracy).

UANI has therefore written dozens of times to classification societies, alerting to them of instances in which vessels classified by them have engaged in this practice.

Some well-known classification societies include the American Bureau of Shipping, Tokyo-headquartered Nippon Kaiji Kyokai (Class NK), UK’s Lloyd’s Register, Paris-based Bureau Veritas, Norwegian firm Det Norske Veritas (DNV), Indian Register of Shipping (IRS), and Registro Italiano Navale (RINA). These members are all part of the International Association of Classification Societies (IACS), the most prestigious ‘club.’ An IACS certification in particular grants vessels enhanced access to global maritime trade and provides an important layer of accountability upon which other maritime entities - flag administrations, marine insurers, oil traders, charterers and port authorities – rely. But regardless of whether a society is an IACS member or not, ‘declassification’ or non-classification should entail the revocation of insurance coverage and indeed the right to sail at all.

Overall, UANI’s campaign has led to the ‘declassification’ of 29 tankers identified as suspected of shipping Iranian cargo. Yet despite having their class withdrawn or suspended, these same tankers continue to traverse international waters – a situation that is of serious concern should any of these tankers be involved in a collision or oil spill. An additional 80+ tankers strongly suspected of having transported sanctioned Iranian oil or gas have retained their classification, despite UANI relaying our concerns to the relevant societies.

For example, Bureau Veritas has responsibly withdrawn the class for a total of seven vessels that UANI has brought to their attention. In one reply, Bureau Veritas wrote, “Further to a thorough due diligence process of the ownership and activity of these vessels, it was decided, in line with our procedures, to terminate contracts binding us to these vessels even in the absence of any OFAC listing.” Similarly, DNV GL has withdrawn the class for eight vessels that UANI highlighted.

However, of these 15 vessels that had their classification withdrawn, six are now being classed by other IACS members.

Classification societies need to start working in unison. Otherwise, ‘classification-hopping,’ like ‘flag-hopping,’ will be the inevitable upshot. Indeed, just as we have encouraged flag registries to make public the information they have relating to vessels that seek to support the Iranian regime, we encourage classification societies to do the same.

Clearly, it is unfair that only some societies take the responsible route to declassify vessels that are switching off tracking satellites against all maritime rules, while the others among them simply pick up the business and enable the regime to continue exporting its most lucrative yet illicit resource around the world.

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Iran Spies on Swedish Companies for Nuclear Program: Swedes Continue Trading

Daniel Roth — Tue, 18 May 2021 12:35:31 +0000

In its latest report the Swedish Security Service revealed that Iran is investing “large sums” in “conduct[ing] industrial espionage, which is primarily aimed at Swedish high-tech industry and Swedish products that can be used in nuclear weapons programs.” The Iranians are “acting more offensively than before,” and their spy operations are taking place over many years, “even decades.” Yet major global Swedish companies, including firms that makes components used for the nuclear industry, still appear to be doing business with and in Iran.

As the name suggests, SKF (“Swedish Ball Bearing Factory”) is known for making high-precision ball and roller bearings -- crucial components in nuclear power plants. SKF’s own in-house magazine confirms that SKF products are used in the nuclear sector, such as the “stainless-steel SKF roller screws” at the Belgian Nuclear Research Centre. (It has also advocated for nuclear power as a transitional post-fossil fuel energy source).

Meanwhile, SKF lists an Iran Branch operating as SKF Eurotrade AB, located on Tehran’s Valiasr Street (“the longest street in the Middle East”). The Iranian firm Rayan Bearing prominently advertises SKF on its website, urging customers to “optimize your rotating machinery design with world-class quality and reliability.” And a Google Maps search reveals several SKF locations in Tehran, like this “authorized distributor” store:

SKF also has ‘authorized distributors’ in the United States. In fact it has more than 4,000 of them, as well as 28 manufacturing sites and two “Solution Factories” in Houston, Texas and Cleveland, Ohio. SKF is also a massive beneficiary of U.S. federal contracts, including from Department of Defense entities including the U.S Air Force and DOD combat support arm Defense Logistics Agency. According to Govtribe.com, SKF USA, Inc. has received $15.1 million in federal contract and grant funding from 2002 to 2020, while the Federal Procurement Database System indicates that SKF has received contract awards to the tune of almost $3.5 million in the last 12 months alone.

Given SKF’s vast and lucrative U.S. footprint, it is imperative that SKF provides full disclosure with regard to Iran. UANI has written three times to SKF seeking such clarification, and most recently on May 7 - a copy of which was sent to SKF USA, Inc. based in Lansdale, Pennsylvania. SKF has failed to respond.

Other U.S.-based entities have also made public their concerns about SKF. Most notably, the California Public Employees’ Retirement System CalPERS, the largest public pension fund in America with $444 billion in assets, has placed SKF “in monitor” status for 2020. CalPERS “continues to monitor the company for possible changes in status relevant to the [California Public Divest from Iran] Act.” The Act bars CalPERS and its sister fund CalSTRS from investing in companies with Iran business operations, and requires “each pension system to sell or transfer any investments in a company with business operations in Iran.”

On June 1, SKF will install a new Chief Executive Officer, Rickard Gustafson. UANI trusts that Mr. Gustafson will prove more forthcoming about SKF’s apparent Iran business than his predecessor.

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