Posts Tagged ‘IRISL’

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More Iran sanction wind whistling

November 10, 2011

The normally reticent director of OFAC, Adam Szubin, has written a blog post about Iran sanctions on the U.S. Treasury Department’s website.  The post accompanied Treasury’s designation of six front companies that own more vessels from Iran’s maritime fleet (IRISL), and Szubin dubiously claimed that “IRISL’s days may be numbered.”

Szubin also linked to a somewhat disorienting Treasury graphic to show the measures Iran has taken to conceal the true identity and ownership of its vessels:

Iran exploits Isle of Man & Panama

At any rate, the post highlights Treasury’s desire to demonstrate that the Obama administration’s sanctions on Iran are “tough” and “smart,” although critics have pointed out that sanctions against Iran have done little to deter Iranian nuclear advances.

During his opening statement at a Senate hearing last month, Banking Committee ranking minority member Sen. Shelby (R-AL) levied a scathing review of the sanctions strategy:

Despite 30 years of progressively more stringent economic sanctions, Iran remains one of the more serious threats to the national security of the U.S. and our allies. Iran continues to support authoritarian regimes, terrorist organizations and radical militias in Iraq and Afghanistan. For allies such as Israel… Iran’s threat to its very existence is real, continues unabated, and cannot be ignored.

More than one year has passed since Congress, the UN, and many of our allies levied the most recent round of sanctions against Iran in an attempt to derail Iran’s efforts to obtain nuclear weapons. Unfortunately, the heightened sanctions have not yet produced any significant change in Iran’s behavior regarding its nuclear program, international terror, or its record on human rights.

One problem is that the White House and the State Department have carefully managed to avoid labeling any major Russian, Chinese, or other US-trading partner’s companies as violators of US-mandated sanctions. China, Russia, and others are expanding trade with Iran, continuing to provide it with banking assistance and investing in its energy sector. Additionally, China and Russia have further undermined U.S. sanctions by supporting Iran’s military programs. For sanctions against Iran to be as effective as possible, the Administration needs to do a better job at securing the cooperation of the global community.

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Cohen adds Iran sanctions to get promoted

June 30, 2011

According to The Cable, David Cohen’s nomination to become Treasury’s new undersecretary for terrorism and financial intelligence is “back on track.”

Cohen’s nomination had been delayed because of concerns about the Obama administration’s lack of tenacity in enforcing anti-Iran sanctions laws.  Cohen, a former Clinton lawyer with little understanding of terrorist financing methods, responded to the delay by jumping through whatever hoops the Senate created in order to get confirmed.

This included the recent addition of sanctions against ten companies tied to Iran’s nefarious state shipping firm (IRISL) and a designation against Venezuela’s state oil company for selling gasoline to Iran.

But going after IRISL and Chavez wasn’t enough. 

It took sanctions against Iran Air and Tidewater Middle East, Iran’s major airline and port operator, to make Cohen’s final sale to the Senate.  Once those designations were announced, Sen. Ron Kirk wrote:

I applaud Acting Under Secretary David Cohen for moving decisively to designate Iran Air and a major Iranian port operator responsible for facilitating Iran’s illicit transfer of weapons and other proliferation activities. Both designations will significantly restrict shipping to and from Iran and put even more pressure on the Iranian economy.  Under Secretary Cohen has proven himself to be a worthy successor to former Under Secretary Levey. He has my confidence.

Political horse trading is what it is, but Mr. Cohen is still an unwise selection for the post for reasons discussed here.  A positive outcome of the whole seedy transaction is that the sanctions regime, which even Democrat Senator Bob Menendez called a “paper tiger,” has become stronger.

However, the enterprising Avi Jorisch recently noted that the sanctions “are not working” partly because of the large number of loopholes in the sanctions regime against Iranian banks that are involved with funding Iran’s nuclear program.  Specifically, Europe allows pre-existing bank relationships to continue, and only prohibits new ones.  Jorisch explains:

Unfortunately, many banks continue to do business with Tehran’s illicit financial industry, and this undermines the sanctions effort. Many of Iran’s designated banks, including those named by the United Nations and the European Union, have a number of branches in countries such as China, Russia, Italy, South Korea, France, Iraq, Lebanon, the United Arab Emirates, among others. Indeed, some of America’s closest allies have publicly claimed their support for sanctions, while at the same time, allowed the Iranian regime free access to hard currency and the international financial sector.

Quietly, European policymakers have said that designated branches can continue to operate in their jurisdictions as long as the transactions relate to contracts signed prior to the UN designation. No new business is allowed, not even “getting new phone lines.” Yet in practice, this loophole allows Iranian banks to maintain their business licenses in Europe, and continue to operate as they did before. In other words, as long as Iran signed a contract with a European company the day before UN sanctions were enacted, European officials are willing to look the other way.

Perhaps the Senate should have held out until these loopholes were shored up as well.

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Nine banks hoodwinked by IRISL

June 27, 2011

Iran, the grand Shia deceiver, managed to trick nine New York bank houses into making transactions on behalf of their shipping industry in violation of U.S. sanctions laws.  Iran is known to use its own banks and international banks to funnel money back into its nuclear programs.  At least this time they were eventually discovered, $60 million later…

From MoneyLaundering.com on June 21:

Banks Receive Praise and a Warning in Press Conference Announcing Indictments Tied to Iranian Shipper

By Brian Monroe and Kieran Beer

Banks were the subject of praise and a warning at a press conference on Monday unveiling a 317 count indictment against 11 corporations and five individuals for their alleged participation in a conspiracy involving an Iranian shipping company.

Manhattan District Attorney Cyrus R. Vance characterized nine banks as victims of deception when they processed more than $60 million of payments for the Islamic Republic of Iran Shipping Lines (IRISL) in violation of U.S. sanctions.

The banks “were not complicit in any way, but on the contrary have been very helpful” during the 14-month investigation that culminated in the indictments, said Adam Kaufmann, who is chief of the investigative division in the district attorney’s office.

And, the efforts of the nine large clearing banks to aid the district attorney’s investigation were “very aggressive and very sophisticated,” according to Adam Szubin, director of the Office of Foreign Assets Control (OFAC), the U.S. Treasury Department agency tasked with managing U.S. economic sanctions, who also took part in the press conference.

But Vance added that “to the extent there are banks that are banking sanctioned entities or not paying enough attention, this indictment is a continuing indication that our office and OFAC are watching carefully and will take action when we see intentional, pervasive efforts to violate federal and state law.”

IRISL and 15 others set up shell companies in Singapore, the United Kingdom and the United Arab Emirates in order to fool major New York-based dollar clearing banks into processing about $63 million in transactions, according to the indictment.

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Thirty-seven designations and a hill of beans

November 14, 2010

False names, false flags, rapid changes in owners, managers, and operators—all of this is part of Iran’s effort to use IRISL, its shipping fleet, to evade international sanctions.  Iran doesn’t just sit down and take its medicine from the U.S., Europe, and the United Nations.  It does everything it can to move goods, supplies, weapons, and materials in and out of the world’s ports without detection.

Although the U.S. has already designated IRISL’s known ships, it took an additional step forward last month by designating 37 companies that own or control IRISL ships.  From Treasury’s press release:

The U.S. Department of the Treasury today announced the designation of 37 front companies based in Germany, Malta, and Cyprus and five Iranian individuals for being owned or controlled by, or acting for or on behalf of, the Islamic Republic of Iran Shipping Lines (IRISL) and its affiliates.  Today’s action…targets IRISL’s complex network of shipping and holding companies and executives and further exposes Iran’s use of its national maritime carrier to advance its illicit weapons of mass destruction (WMD) program and to carry military cargoes.

“We will continue to expose the elaborate structures and tactics Iran uses to shield its shipping line from international scrutiny so that it can continue to facilitate illicit commerce,” said Under Secretary for Terrorism and Financial Intelligence Stuart Levey. “This pattern of obfuscation is leading the private sector around the world to refuse business with Iran rather than risk becoming involved in its nuclear and missile programs.”

Tighter sanctions are a plus, but there are always limits.  In an investigation into IRISL earlier this year, the New York Times found that Iran’s abilities to evade “goes well beyond the knowledge of even the Treasury Department” and that, “As difficult as it is to keep track of ships that are on the blacklist, ships that have never been listed present an even greater challenge.”  The New York Times suggests that no matter how many ships and companies Treasury designates, Iran will just keep finding ways around the sanctions. 

But when our leaders basically take military options off the table, and Iran writes-off diplomatic options, futile economic restrictions are about all that’s left.