News / Asia

Hong Kong Shipping Under Scrutiny for Iran Links

The container vessel "IRAN PIROOZI" anchors at the quay of Aker MTW Shipyard in Wismar, northern Germany, after namegiving ceremony ( 2003 file photo).
The container vessel "IRAN PIROOZI" anchors at the quay of Aker MTW Shipyard in Wismar, northern Germany, after namegiving ceremony ( 2003 file photo).
Ivan Broadhead

In the past year the United Nations has tried to tighten restrictions on an Iranian shipping company accused of helping Tehran gather materials for its nuclear program. Security Council Resolution 1929 has helped locate ships operating under the Islamic Republic of Iran Shipping Lines (IRISL) and turn them away from ports in Europe and North America.  The measure has been much less effective in Asia.

Last week, David S. Cohen, U.S. Treasury undersecretary for terrorism and financial intelligence, again warned the Asian shipping industry that conducting business with the IRISL contravenes international law.

Meeting industry representatives in Hong Kong, Cohen named 19 ships that he says the Iranian company renamed and transferred ownership to local shell companies to conceal their identity.

Deceptive practices

Claudia Rosett is with the Foundation for Defense of Democracies - an institute financed by private donors and the U.S. government that studies terrorism.  She has investigated the Iranian company’s sanctions-thwarting methods by using records in the Hong Kong Marine Department.

"You start to see what is really an amazing global network of shell companies, deceptive practices and so on, with which Iran has been trying to get around sanctions on its commercial shipping," she said.

Rosett says one former IRISL ship now registered to a Hong Kong shell company has even been renamed The Alias.

US warning

The U.S. Treasury department warns that any organization found trading with IRISL - even one of its covertly registered entities - would be considered to be helping thwart the United Nations sanctions.

However, Hong Kong marine industry representatives say they do not have the resources adequately to police one of the world’s busiest ports, through which almost half a million ships and 268 million tons of cargo pass each year.

Industry representatives say they need extra intelligence to keep IRISL out of Hong Kong and to prevent their business being unfairly tarnished.

Arthur Bowring is managing director of the Hong Kong Shipowners Association, which includes insurers, fuelling companies, port authorities and other marine services providers.

"A lot of the information is very vague," he said. "It’s a minefield for operators; a lawyer’s paradise in many ways."

Capabilities

Bowring says the industry is committed to upholding sanctions against Iran, which were incorporated into Hong Kong law this June. But he adds that his members are not intelligence experts and yet are being asked by Washington to second-guess which, if any, companies might be a front for IRISL.   

"It makes life extremely difficult for ship owners, who don’t want to trade with Iran, aren’t trading with Iran.  Yet they are caught up with the associated link," he says.

Bowring admits that shippers are nervous of falling foul of the U.S. Treasury, a view with which Rosett sympathizes.

"My guess would be it’s not the intention of the U.S. government to scare people, but to point out that Iran is exploiting the services of Hong Kong’s terrific, vibrant business community... The problem really lies with Iran," said Rosett.

Cohen also met with China’s four largest state banks and warned them they could be sanctioned should they do business with Iranian financial institutions with ties to Iran’s nuclear program.  A Chinese Foreign Ministry spokesman later said none of China’s business with Iran violates U.N. resolutions.

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