Malta adopts sanctions against Iran shipping lines and its front companies

The Maltese government has formally adopted EU sanctions against various branches and subsidiaries of the Islamic Republic of Iran Shipping Lines (Irisl), published today.

The sanctions freeze all funds and economic resources belonging to various Irisl companies that are using Malta as a ‘haven’ to transfer Iranian cargo ships from one ghost company to the other, in a bid to escape the sanctions.

Among the Malta-based companies and parent companies which had their assets frozen are South Shipping Line Iran, Bushehr Shipping Company, Hafiz Darya Shipping Lines – the main Irisl agent in Malta – ISI Maritime (Malta), and Marble Shipping.

The sanctions prohibit the loading and unloading of cargoes from vessels owned or chartered by Irisl in Maltese ports. But the prohibition does not prevent the execution of a contract concluded before the entry into force of the EU regulation on 25 October 2010.

The obligation to freeze the funds and economic resources of Irisl and its subsidiaries will not require the impounding or detention of the vessels or the cargoes carried by them as long as the cargoes belong to third parties.

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 uses 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 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 local agency central to the network is the Royal-Med shipping agency, which is the agent for the private Iranian company – the Hafiz Darya Shipping Lines (HDS). But 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.

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 its Iranian-sounding name to the innocuous-sounding Silver Craft, and is owned by Kerman Shipping, which is registered at Tower Road, Sliema. Whereas before, running a compliance check on a transaction involving this ship would have raised several red flags, the new name 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.