Iran lays false trail to dodge US sanctions

An Iranian labourer walks on an oil facility platform in the Khark Island, on the shore of the Gulf. (AFP)
Updated 20 March 2019
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Iran lays false trail to dodge US sanctions

  • Supertanker shipped fuel oil under forged Iraqi papers
  • Ship not in Basra port during cited loading period

SINGAPORE: At least two tankers have ferried Iranian fuel oil to Asia in recent months despite U.S. sanctions against such shipments, according to a Reuters analysis of ship-tracking data and port information, as well as interviews with brokers and traders.
The shipments were loaded onto tankers with documents showing the fuel oil was Iraqi. But three Iraqi oil industry sources and Prakash Vakkayil, a manager at UAE shipping services firm Yacht International Co, said the papers were forged.
The people said they did not know who forged the documents, nor when.
The transfers show at least some Iranian fuel oil is being traded despite the reimposition of sanctions in November 2018, as Washington seeks to pressure Iran into abandoning nuclear and missile programmes. They also show how some traders have revived tactics that were used to skirt sanctions against Iran between 2012 and 2016.
"Some buyers...will want Iranian oil regardless of U.S. strategic objectives to deny Tehran oil revenue, and Iran will find a way to keep some volumes flowing," said Peter Kiernan, lead energy analyst at the Economist Intelligence Unit.
While the United States has granted eight countries temporary waivers allowing limited purchases of Iranian crude oil, these exemptions do not cover products refined from crude, including fuel oil, mainly used to power the engines of large ships.
Documents forwarded to Reuters by ship owners say a 300,000 tonne-supertanker, the Grace 1, took on fuel oil at Basra, Iraq, between Dec. 10 and 12, 2018. But Basra port loading schedules reviewed by Reuters do not list the Grace 1 as being in port during those dates.
One Iraqi industry source with knowledge of the port's operations confirmed there were no records of the Grace 1 at Basra during this period.
Reuters examined data from four ship-tracking information providers - Refinitiv, Kpler, IHS Markit and Vessel Finder - to locate the Grace 1 during that time. All four showed that the Grace 1 had its Automatic Identification System (AIS), or transponder, switched off between Nov. 30 and Dec. 14, 2018, meaning its location could not be tracked.
The Grace 1 then re-appeared in waters near Iran's port of Bandar Assaluyeh, fully loaded, data showed. The cargo was transferred onto two smaller ships in UAE waters in January, from where one ship delivered fuel oil to Singapore in February.
Shipping documents showed about 284,000 tonnes of fuel oil were transferred in the cargoes tracked by Reuters, worth about $120 million at current prices.
Officials at Iran's oil ministry declined to comment.
Singapore customs did not respond to requests for comment.
The Grace 1, a Panamanian-flagged tanker, is managed by Singapore-based shipping services firm IShips Management Pte Ltd, according to data. IShips did not respond to several requests for comment via email or phone.
A Reuters reporter visited the office listed on IShips' website but was told by the current tenant that the company had moved out two years earlier.
The ship-tracking data analysed by Reuters showed the Grace 1 emerged from the period when it did not transmit its location almost 500 kilometres south of Iraq. It was close to the Iranian coast with its draught - how deep a vessel sits in water - near maximum, indicating its cargo tanks were filled.
The Grace 1 transferred its cargo to two smaller tankers between Jan. 16 and 22 in waters offshore Fujairah in the UAE, data showed.
One of those vessels, the 130,000 tonne-capacity Kriti Island, offloaded fuel oil into a storage terminal in Singapore around Feb. 5 to 7. Reuters was unable to determine who purchased the fuel oil for storage in Singapore.
The Kriti Island is managed by Greece's Avin International SA.
The tanker was chartered by Singapore-based Blutide Pte for its voyage to Singapore, Avin International's Chief Executive Officer George Mylonas told Reuters. Mylonas confirmed the Kriti Island took on fuel oil from the Grace 1.
There is no indication that Avin International knowingly shipped Iranian fuel oil. Mylonas said his firm had conducted all necessary due diligence to ensure the cargo's legitimate origin.
Mylonas emailed Reuters a copy of a Certificate of Origin (COO) that he said was provided by the charterers – referring to Blutide - showing the Grace 1 loaded fuel oil at Basra on Dec. 10 and 12, 2018.
"The Certificate of Origin and all the information obtained did not reveal any connection with Iran, let alone that the cargo of fuel oil originated" from there, Mylonas wrote.
Mylonas said the Grace 1's owners, managers, shippers, receivers and charterers were screened by Avin International. "There were not circumstances that would make the COO of dubious origin," he said via email.
He said he had been told by the charterers that the Grace 1 only stopped in waters off Iran in late December and early January for "repairs of damaged diesel generators" before sailing to Fujairah.
The document provided by Mylonas says Iraq's state oil marketer SOMO certified the Grace 1 in December loaded a total of 284,261 tonnes of Iraqi fuel oil.
Reuters shared the document with a SOMO official in Iraq who said it was "faked" and "completely wrong". The official declined to be identified by name, citing the marketer's communications policy.
Two other Iraqi oil industry sources with direct knowledge of Basra port and oil industry operations also said the documentation was forged.
The two sources said the document bore the signature of a manager who was not working at Basra port on the stated dates. The document also bears contradictory dates: It indicates a loading period of Dec. 10 and 12, 2018 but a sign-off date for the transaction of Jan. 12, 2018.
Data showed the second tanker into which the Grace 1 transferred cargo was the Marshal Z, also a 130,000-tonne vessel.
It was bound for Singapore in the first half of February but changed course on Feb. 15, parking off western Malaysia. Reuters was unable to determine who owns the Marshal Z, nor who chartered it.
Around Feb. 25, the Marshal Z transferred its cargo to another vessel called the Libya, owned and managed by Tripoli-based General National Maritime Transport Company (GNMTC).
A GNMTC spokesman said the Libya was chartered by Blutide, the same Singapore firm that chartered the Kriti Island.
Blutide registered as a company in Singapore on May 14, 2018. Its sole listed shareholder and only director, Singaporean Basheer Sayeed, said by telephone on Feb. 7 he was retired and not in a position to comment on the company's activity.
The Libya's owner GNMTC "was not aware, at any stage that the cargo is linked in any way to Iran," the company's spokesman said via email.
GNMTC provided Reuters with a copy of a COO that it said was issued by shipping services company Yacht International, based in Fujairah, showing the Marshal Z loaded Iraqi-origin fuel oil during a ship-to-ship transfer in UAE waters on Jan. 23.
However, Yacht International shipping manager Prakash Vakkayil said in an email his firm did not issue the certificate and "considers it to be forged".
The GNMTC spokesman did not respond to follow-up questions from Reuters.


India suspends Kashmir border trade with Pakistan

Updated 19 April 2019
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India suspends Kashmir border trade with Pakistan

  • Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries
  • India said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency”

NEW DELHI: India has suspended trade across its disputed Kashmir border with Pakistan, alleging that weapons and drugs are being smuggled across the route, as tensions simmer between the nuclear-armed neighbors.
Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries and brought the two countries to the brink of war with cross-border air strikes.
On Thursday, India’s government, which is in the middle of a tough national election, said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.”
It also said many of those trading across the Line of Control, which divides Kashmir into zones under Indian and Pakistani control, had links to militant organizations.
The home ministry said trade would be suspended until a stricter inspection mechanism is in place.
The cross-border trade is based on a barter system, with traders exchanging goods including chillies, cumin, mango and dried fruit.
It began in 2008 as a way to improve strained relations between New Delhi and Islamabad, who have fought two of their three wars over the disputed region.
The Indian Express newspaper said Friday that 35 trucks carrying fruit traveling from the Indian side of the border had been stopped after the government order.
Trade on the border has been suspended before, including in 2015, when India accused a Pakistani driver of drug trafficking.
The latest move comes after India withdrew “Most Favoured Nation Status” — covering trade links — from Pakistan after the February attack, which was claimed by the Pakistan-based Jaish-e-Mohammed Islamist group.
Islamabad has denied any involvement in the attack.
India’s Hindu nationalist Prime Minister Narendra Modi has made national security a key plank of his re-election campaign, pointing to the recent flare-up of violence as he battles the center-left opposition Congress party.
He is seeking a second term from the country’s 900 million voters in the mammoth election which kicked off on April 11 and runs till May 19. The results will be out on May 23.