Chalk up another black mark against Iran’s regime… as if any more were needed. To dodge U.S. sanctions imposed in 2008 on its state-owned merchant shipping company and purveyor to Iran’s missile and nuclear programs, the Islamic Republic of Iran Shipping Lines, or IRISL, Iran’s regime has been playing a global shell game. For the past three years IRISL has been camouflaging its ships by reflagging them, renaming them, and creating proliferating sets of shell companies to serve as their nominal owners, with Iran lurking behind them. Despite U.S. sanctions, ships blacklisted by the U.S. for their links to IRISL continue to ply the seas, while IRISL hides behind a morphing network of affiliates, shell companies, and related accretions.
For this activity, described by the U.S. Treasury as a web of “deceit,” Iran has favored a number of hubs, including Malta, Germany, and one of the world’s great port cities — Hong Kong. None of this activity is good, but there is something about Iran’s exploitation of Hong Kong that has been particularly appalling. Hong Kong’s great virtue is that it is a place friendly to business, a testament even today to the benefits of a free market. Say what you will about the shadowy side of China’s growing influence in Hong Kong since Britain turned over the Crown Colony in 1997 (and there is plenty to say), Hong Kong carries on as one of the marvels of the modern world, still a place of energy and enterprise.
Since 2008, Iran has battened onto Hong Kong’s system as a handy place to set up shell companies to try to disguise its connection to 19 IRISL-linked Hong Kong-flagged cargo ships, all blacklisted by the U.S. Treasury . Batches of these Hong Kong shell companies serving as nominal owners of these ships have been exposed by Treasury and added to its Iran sanctions blacklist. Last month, while in Hong Kong, I took a look at some of the documents connected with these 19 Hong Kong-flagged ships. I discovered that since Treasury’s most recent bout of related black-listings, in January, and a superb series of articles early this year on that theme in the South China Morning Post, these ships had come under new ownership by 19 new and obscure Hong Kong-registered companies — all sharing the same Hong Kong address. I went to that address, where the only physical sign of these companies consisted of rows of green file boxes, containing their corporate documents, shelved in the back room of a company that provides corporate secretarial services to a variety of clients.
The paper trail led on, or perhaps I should say it led back, via a web of nested companies, to a company in Iran, by the name of Kish Roaring Ocean Shipping Company. It does not appear on Treasury’s blacklist. Indeed, I could not discover any list on which it does appear, apart from its listing as sole corporate director of a Hong Kong company that in turn serves as sole director of every single one of these 19 companies which according to the Hong Kong Marine Department Shipping Registry had become the owners of those 19 ships. That tale, including the 19 Hong Kong-flagged U.S.-blacklisted IRISL-linked ships (all currently with names starting with the letter “A” — for instance, the Ajax, Apollo, Adrian, Amplify and, I kid you not, the Alias), is the subject of my article in the Asian Wall Street Journal titled “Tehran’s Ghost Fleet” (this is a link that will only work for Wall Street Journal subscribers, but the headline gives the basic idea).
Make of this latest lattice what one will, the entire exercise was a reminder that, according to the U.S. Treasury, Iran in recent years has already exploited Hong Kong as a platform for trying to evade sanctions meant to stop Iran’s pursuit of weapons of mass murder. That problem does not emanate from Hong Kong. It comes from the regime in Iran. Not only does Iran’s regime violently abuse and oppress its own people, train and support terrorists, and gloat over its dreams of “purifying” the human race (starting with Israel) while developing weapons to kill millions. In an opportunistic manner, it also infests systems that were meant for far healthier uses, from the governing boards of major United Nations agencies, to the by-ways of such commerce-friendly polities as Hong Kong. This may not look like a direct threat, but it is corrosive.
Has anyone lookded at the links between this and the shipment that exploded “by mistake” in Cyprus recently?
Can you do the innocent Iranian people a favour and refer to these rogues as distinct from Iran. It is the fraudulent Hezbollah activities both in Iran and internationally that is wrong. Please put it that way so that they can be identified properly. They are not an “Iranian regime” as Iranians are being killed by them. They are like the Taliban is to Afghnistan.
Thanks.
Ships are useful to evildoers, not only as a way of obtaining WMDs, but also as vehicles for deploying them.
How secure are our container ports?
It’s good to see the Treasury Dept. on top of the Iranian shipping shell game, but it is a little hypocritical. Maybe they should start looking into American companies that flag their ships in tax havens.
The practice of reflagging ships and mega yachts is commomplace all over the world. The flag fluttering from the fantail of these vessels is almost never the flag representing the true owners.
In years past Liberia and Panama were the most common “flags of convenience” nowadays more and more vessels are flying the flag of the Marshall Islands, not exactly a great maritime power.
Readers here are advised to read a more detailed Wall Street Journal article this morning by Claudia Rosett, titled “Iran’s Hong Kong Shipping Shell Game” which confirms Hong Kong’s long-accustomed role an an aggressive pursurer of the “main chance” and never, ever, leaving a potential new business opportunity unexplored for more than a nanosecond. There are no business vacuums in Hong Kong, communist possession or no. Never have been.
During the Viet Nam War, The Shipping pages of the South China Morning Post from time to time listed British or Hong Kong registered ships calling at Haiphong. One wonders what was on the cargo manifests as opposed to the cargo in the holds.
I’ve often wondered about the current ownership of the South China Morning Post and how they cope with the return of Hong Kong as Chinese territory.
“Time Marches On”, as the former newsreels used to somberly intone.
This is just more proof how economic embargoes or sanctions are a joke in this day and age. You can get shipping companies to do just about anything you want and you can falsify documents for any ship in the world. As the article points out, ships can be re-flagged and ownership can be muddied to such an extent that it’s hard to find out who really owns the ship. Economic sanctions did NOT work against Saddam Hussein (as in the Oil-for-Food program), so why should it work against the Iranians? The only way to close an enemy’s ports is through a naval blockade. Unless you are willing to do that, then economic sanctions on the sea are pointless. Countries like Iran will just change the paperwork on each ship and carry on business as usual. Firm naval blockades are an act of war, but they do work. Everything else is just window dressing. It just depends on how serious you are in closing the ports of rogue nations like Iran.
There are some links in article I posted last week, before the storms along the east coast, which you may find useful in research. http://msmignoresit.blogspot.com/2011/08/what-is-in-syria-that-keeps-obama-quiet.html?m=1
Oh, while at the blog msmignoresit.blogspot.com you will also find a piece on the IRGC which is now in charge of OPEC.
Barny, not too many months ago a ship showed up in Nigeria with one of several loads of weapons from Iran to Nigeria. I don’t recall the specifics, but a google search will pull it all for you. It is nothing new even though not many in the West ever hear about it
I;m in accord regarding the ‘sanctions’ nonsense. How many sanctions collectively are levied on Iran? Since being voting age, taking an interest in politics from the early 90′s I’ve heard ALL U.S. Presidents lower the ‘Bob the Builder’ hammer on Iran with sanctions. UN sanctions. Yadda yadda yadda.
The result has been Jack and S hit. And Jack left town.
Unless the countries mentioned in the article use their Navy might (Malta’s Navy is miniscule containing mostly patrol=type boats) on these terrorists of the sea, it’s EASY business as usual for these despicable rogues ( for you Mr. Mostofi) in Iran until obtaining the necessaries to inevitably seek and do their evil bidding.
Sanctions are not working because they are not serious. Iran has always been vulnerable to an oil embargo, or a naval blockade. But China and Russia are committed to undermininmg any sanctions regime. In these circumstances, the kind of sanctions imposed have never been avoidance accompanied by high moral dudgeon. Whatever they are, they are not action.
During the 2008 campaign, Candidate Obama was clear about the threat posed by Iran’s nuclear weapons program. In a “60 Minutes” interview (9/22/2008), he said:
“I think that a nuclear armed Iran is …a game changer in the region. It’s unacceptable. And that’s why I’ve said that I won’t take any options off the table, including military, to prevent them from obtaining a nuclear weapon.”
Earlier (July 23, 2008), he told an Israeli audience: “That is our single most important threat to Israel but also to the United States of America. So this is something that we’re going to spend a lot of time working on.”
Since then, Iran’s nuclear weapons program has progressed unimpeded. The centrifuges continue to hum, fuel continues to be stockpiled, and the only remaining question is when the first Iranian nukes will be ready to mount on their missiles. When, not if.
And where is President Obama’s commitment “to spend a lot of time working on” the problem? Whatever happened to all the “options” he so boldly kept on the table? It appears that the options, along with the “single most important threat to the USA”, have somehow fallen off the president’s table.
In the best case, it is possible that Obama, like Neville Chamberlain before him, believed that hostile powers led by apocalyptic madmen would respond positively to his outreach and reasonableness; in this case, he honestly doesn’t know what to do now.
Or, in an uglier interpretation, one might suppose that his campaign statements were merely cynical political moves designed to secure the support of those voters concerned about the threat: promises, like piecrusts, made to be broken.
But Obama’s psychology is not the immediate concern. Iran must be stopped from becoming a nuclear power. They cannot be stopped without strong US leadership.
I would like to suggest Ms- Rosett to read Triple (author: Ken Follet) before making any report related to “political shipping industry”. As an expert in commercial shipping industry, I found Ms. Rosset report as a basic non professional report more likely to a basket ball reporter who is trying to report a boxing match.
She has not noted to this important that there are numerous ways for employment of a commercial ship through which the original ownerships could not be traced. Moreover, a banned (U.S. or internationally) ship should not be insured by the maritime international under-writers since they are provided with the updated ownership lists on daily basis.
But the biggest difference in employment of a ship is when the owner is supposed to use it as a “private carrier” or “public Carrier”.
Ms. Rosett should have consulted with a shipping expert, in my opinion, before writing this report particularly when 99% of her readers do not have professional shipping knowledge.