Iran sanctions: Malta must hand over information on Iran’s game of ‘hide and seek’ to circumvent sanctions

The government of Malta is going to have to finally communicate information on the web of companies that have nested in Malta, which are being used to stash the vessels once owned by Iran’s national shipping company Irisl, to circumvent the UN sanctions endorsed by the United States and the European Union.

Under the new sanctions issued by the EU, published in a legal notice today (Tuesday), Malta must communicate to the UN Security Council’s sanctions committee “any information available on transfers or activity by… vessels owned or operated by the Islamic Republic of Iran Shipping Lines (Irisl) to other companies that may have been undertaken in order to evade the sanctions… including remaining or re-registering of vessels or ships.”

This means the Maltese government must report on at least 42 companies whose shareholders are Irisl officials, and which are operating the ships once owned by Irisl and since then renamed to avoid suspicion by national ports.

Despite claims by the government that Irisl activities at its Mediterranean hub in the Malta Freeport would not be affected, Malta's role in adopting these sanctions means the government must report on how Irisl has used the island's financial system to effectively hide its blacklisted vessels.

MaltaToday has established how the office of the Maltese-owned Royal-Med Shipping Agency, at 143 Tower Road, Sliema, is being used to house what the US Treasury Department has termed “front companies”.

According to US Treasury Secretary Tim Geither, Irisl is using these front companies to engage in “deceptive behaviour such as renaming ships to overcome the impact of sanctions and increased scrutiny of its behaviour.”

MaltaToday has located 13 Irisl-owned companies in Sliema, while another address in Qormi hosts 19 shipping companies whose shareholders are Ebrahim Mohammadnabi and Hassan Djalilzadeh, two senior officials at Irisl, registered in Teheran; and at 147/1, St Lucia Street, Valletta, 10 Irisl-owned companies are located. They are all subsidiaries of ISI Maritime, an Irisl company.

The central node of this network is Royal-Med shipping agency, which is the agent for a private, Iranian company – the Hafiz Darya Shipping Lines (HDS). HDS was created in 2009 shortly after the US and UK hit Irisl with trading bans over its alleged role in supplying Iran’s nuclear weapons programme, to take over IRISL’s container business as part of a government privatisation move.

But the New York Times has established that HDS operates out of the third floor of Irisl’s main headquarters in Aseman Tower, in Tehran.

HDS acts as the ship manager of various Malta-flagged ships that previously belonged to Irisl, but which have now been transferred to these shell companies, with the ship names changed from their Iranian appellations into innocuous English-sounding names.

So for example, the M/V Iran Kerman has now changed to Silver Craft, and is owned by Kerman Shipping, registered at 143/1, Tower Road, Sliema. The reason is simple. Whereas before the new sanctions, running a compliance check on a transaction involving one of these ships would have raised several red flags, the new ship names allowed the same transactions to appear clean.

It is not suggested that the creation of these shell companies and the transfer of ownership is unlawful.

Credit checks by MaltaToday have also confirmed that Royal-Med’s sole director-shareholder, Adrian Baldacchino, was formerly the shareholder in Maraner Holdings: the company that previously owned Irisl Malta, along with its other shareholder, Irisl Europe.