Wall Street Journal: The U.S. Treasury Department accused Iran's national maritime carrier of helping the country's nuclear and missile programs, a formal move designed to pressure Iran amid stalled talks over its nuclear work.
The Wall Street Journal
Pressure via Move
To Limit Imports
By LOUISE RADNOFSKY and CHIP CUMMINS
September 11, 2008; Page A3
The U.S. Treasury Department accused Iran's national maritime carrier of helping the country's nuclear and missile programs, a formal move designed to pressure Iran amid stalled talks over its nuclear work.
The Treasury, in designating the carrier as a "proliferator," said the Islamic Republic of Iran Shipping Lines and 18 of its affiliated entities were secretly "providing logistical services" to Iran's military, falsifying shipping documents and using deceptive terms to describe shipments in order to hide their activities from foreign maritime officials.
The designation, which typically is designed to stop companies on the list from doing business in the U.S., further blocks the carrier's ability to move money through U.S. banks as well as blocking it from carrying food and medical supplies not included in Washington's longstanding trade sanctions against Iran.
Mostly the move appears to be designed to encourage other countries to further limit their dealings with Iran, which is dependent on imported refined-petroleum products such as gasoline.
Islamic Republic of Iran Shipping Lines was targeted not for its size but because it was "the shipper of choice for Iran's missile entity," said Adam Szubin, director of the Treasury Department's Office of Foreign Assets Control.
But, he added, the designation had been adopted "not just to try to disrupt and pressure their proliferation network, but to raise the cost for the Iranian regime of their continued defiance of international resolutions" on the country's nuclear program.
Iran is one of the biggest importers of gasoline after the U.S. because it lacks domestic refining capabilities. Iran buys about 40% of its gasoline from European, Indian and Venezuelan companies. Last year it had to ration sales amid financial and supply pressures, triggering unrest in some parts of the country.
The U.S. accuses Iran's military of advancing aggressive nuclear and missile programs. Washington suspects Iran is attempting to develop weapons through its uranium-enrichment program, while Tehran says it has peaceful intentions and is trying to generate nuclear energy for civilian use. Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, said Islamic Republic of Iran Shipping Lines had engaged in "a broader pattern of deception and fabrication" on behalf of these programs.
Earlier this year, the United Nations Security Council agreed to scrutinize the carrier for its alleged support of Tehran's nuclear industry. During the summer, the U.S. stepped up its threats to target Iran's imports amid slow progress in the nuclear talks, which have stalled despite high-level overtures from the State Department.
This is the first time Treasury has designated a shipping company as a proliferator, the department said.
The company says it has a fleet of 91 ships, most of them bulk carriers designed to transport dry cargo such as grain, coal and iron ore. Oil shipments from Iran, one of the world's biggest exporters, aren't likely to be affected. The company says it has just two tankers, and they are used to transport vegetable oil and similar products.
The move could complicate Islamic Republic of Iran Shipping Lines's dealings with other countries. Its ships call frequently at nearby Dubai, part of the United Arab Emirates, according to the Iranian carrier's Web site. The company also says it makes regular trips to big ports in Hong Kong, Singapore, the U.K., Germany and France.
Phone calls to the company's headquarters in Tehran and calls and emails to its British affiliate, made after working hours Wednesday following the U.S. Treasury designation, weren't answered. The Iranian mission at the U.N. in New York didn't return calls.
In addition to causing difficulties for Iran's ability to import vital products, the new sanctions could further complicate the already-difficult task of executing import and export transactions for Iranian government-owned companies and private enterprises.
Similar unilateral sanctions by Washington on several Iranian banks were initially dismissed by Iranian officials when they were announced last year. But they have since caused considerable headaches for businesses, including making it time-consuming to raise funds overseas, arrange project financing and make or receive payments from international counterparts.
International banks and companies have become more careful with Iranian transactions, fearful they could be locked out of the American banking system.