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September 11, 2008

U.S. slaps sanctions on Iran's national shipping line

The U.S. is imposing sanctions on Iran's national shipping line. The Department of the Treasury's Office of Foreign Assets Control yesterday designated the Islamic Republic of Iran Shipping Lines (IRISL), and 18 other affiliated entities under Presidential Executive Order 13382 of June 28, 2005, Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters.

Designations under E.O. 13382 are implemented by Treasury's OFAC, and they prohibit all transactions between the designees and any U.S. person, and freeze any assets the designees may have under U.S. jurisdiction.

"Not only does IRISL facilitate the transport of cargo for U.N. designated proliferators, it also falsifies documents and uses deceptive schemes to shroud its involvement in illicit commerce," said Stuart Levey, U.S.Treasury Under Secretary for Terrorism and Financial Intelligence. "IRISL's actions are part of a broader pattern of deception and fabrication that Iran uses to advance its nuclear and missile programs. That conduct should give pause to any financial institution or business still choosing to deal with Iran."

IRISL is Iran's national maritime carrier; a global operator with a worldwide network of subsidiaries, branch offices and agent relationships. It provides a variety of maritime transport services, including bulk, break-bulk, cargo and containerized shipping. These services connect Iranian exporters and importers with South America, Europe, the Middle East, Asia, and Africa.

According to information available to the U.S. government, IRISL also facilitates shipments of military-related cargo destined for Iran's Ministry of Defense and Armed Forces Logistics (MODAFL) and its subordinate entities, including organizations that have been designated by the United States pursuant to E.O. 13382 and listed by United Nations Security Council Resolutions 1737 and 1747.

MODAFL, which was designated by the U.S. Department of State in October 2007 under E.O. 13382, has the ultimate authority over previously designated entities including the Aerospace Industries Organization an umbrella group which controls Iran's ballistic missile research, development and production activities and organizations.

According to the Treasury, in order to ensure the successful delivery of military-related goods, IRISL has deliberately misled maritime authorities through the use of deception techniques. These techniques were adopted to conceal the true nature of shipments ultimately destined for MODAFL. Furthermore, as international attention over Iran's WMD programs has increased, IRISL has pursued new strategies, which could afford it the potential to evade future detection of military shipments.

Specifically, says the Treasury, IRISL has employed the use of generic terms to describe shipments so as not to attract the attention of shipping authorities and created and made use of cover entities to conduct official, IRISL business. For example, in 2007, IRISL transported a shipment of a precursor chemical destined for use in Iran's missile program. The end user of the chemical was Parchin Chemical Industries, an entity listed by the United States pursuant to E.O. 13382 and listed in UNSCR 1747 as a subordinate of Iran's Defense Industries Organization (DIO).

Also designated yesterday were 17 entities that were found to be owned or controlled by or acting or purporting to act for or on behalf of, directly or indirectly, IRISL.

The Treasury also designated a list of 123 vessels affected by the sanctions.

You can access the full particulars of the designated entities and the 123 vessels HERE

At a briefing held at the State Department yesterday the Director of the TreasuryŐs Office of Foreign Assets Control Adam Szubin said the U.S. has information that points to an "alarming pattern of denial and deception techniques by IRISL."

"Because of the high risk of unwittingly facilitating IranŐs proliferation activities," said Mr. Szubin, "We call on banks, companies and insurers worldwide to reevaluate any ongoing business relationships with IRISL. IRISLŐs deceptive conduct makes it nearly impossible to determine whether its shipments are licit or illicit under the international standards put out by the UN Security Council in its resolutions."

He noted that a UN sanctions resolution on Iran, 1737, prohibits the provision of any financial services that could contribute to IranŐs nuclear and missile activities and said that this covered financial services beyond banking such as insurance.

"To speak specifically about todayŐs action," he said, "companies that are providing maritime insurance to a company like IRISL ought to do so after only extreme diligence, given not only their ties to IranŐs proliferation activities, but IRISLŐs established deceptive practices."

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