Jul 23 2019

Turkish shipping firm investigated for Iran sanctions violations

Turkish maritime news site Deniz Haber has published documents that it said showed evidence of violations of U.S. sanctions on Iran by two vessels believed to belong to the Turkish-owned Palmali Shipping.

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) launched an investigation into the Istanbul-based Palmali Shipping for violating the U.S. embargo against Iran and Syria, the site reported in May.

Recep Canpolat of Deniz Haber said port clearance documents from Bandar Abbas on Iran’s Gulf coast showed that one of the vessels, the Agdash, departed from the port in March, before heading to the port of Fujairah in the United Arab Emirates.

Custom Clearance at Bandar Abbas Port
Custom Clearance at Bandar Abbas Port

Satellite tracking records from May show the other ship, the Agsu, moving off its planned course to Basra in Iraq and heading towards Bandar Abbas, before turning off its tracking device.

The itinerary of the Agsu as recorded by MarineTraffic.com shows it leaving Fujairah on course to arrive at the port of Basra on May 14, but the latest position received from the ship shows it on course for the Bandar Abbas port in southern Iran. The last time the ship sent a signal was on May 13. The ship, which had been scheduled to arrive at Basra one day later, was instead waiting by Hormuz, an Iranian island in the Gulf. 

“They only noticed that they had the Automatic Identification Signal on by the time they got to Hormuz, and they immediately shut it down. Here we see that they tried to trick the satellite systems, but they gave themselves away,” Canpolat said. “Even though the trade was between Iran and the UAE, the company is in Turkey, which makes me think how our country will be affected.”

Through various meetings in Iran, Canpolat said he had discovered that Palmali Shipping had violated the embargo 10 times with one ship and seven with the other while transporting petroleum products.

Payment slip via US SWIFT system
Payment slip via US SWIFT system showing Palmali paid for shipping

The company’s owner Mubariz Mansimov rejected the allegations levelled at him in May and said the ships did not belong to his company.

But documents show that the Agdash, leased by the UAE-based Mawared Energy, was invoiced as a time charter by Palmali Shipping. 

Mawared Energy used the U.S.-based SWIFT system to transfer payments for the Agdash to Palmali Shipping’s accounts at QNB Finansbank through the R Shipping brokerage company, owned by Igor Raspopov.

A report by the U.S. State Department and the OFAC published on March 25, 2019 under the title, “Sanctions Against Petroleum Shipments involving Iran and Syria”, listed the names of companies violating embargoes, the methods they used and the sanctions against them. 

According to the report, a ship named Shah Deniz belonging to Palmali Shipping violated the embargo in 2016 to ship oil from Syria. The ship, sailing under the Maltese flag, was sold to another company and renamed to Zarifa Aliyeva after the incident, but Vesselfinder records show photographs of the ship with the name Palmali still written on it.

The source said Mansimov paid some $200,000 to get out of that situation, and had already been pardoned for violating the embargo.

Port clearance at Iran's Asaluyeh port
Port clearance at Iran's Asaluyeh port 

The OFAC however, is not likely to be as lenient in a repeat offense. 

Canpolat said Mansimov had lost the majority of his fleet to bankruptcy in 2018, and the lure of the huge profits to be gained by breaking the embargo proved too difficult to resist.

The journalist said the new breaches of U.S. sanctions on Iran brought to mind a previous bombshell case involving Turkey.

“If the OFAC launches other investigations on the ownership of the vessels, could this turn into another Reza Zarrab case? It is too early to say, we will have to wait and see,” Canpolat said, referring to a landmark sanctions-busting trial that last year found an executive at Turkey’s state-run Halkbank guilty of a scheme to contravene U.S. sanctions on Iran. 

The Turkish-Iranian gold dealer at the centre of the scheme, Reza Zarrab, turned state witness and provided testimony implicating Turkish ministers and senior officials in the scheme. 

Meanwhile, the Turkish Chamber of Shipping IMEAK’s chairman of the board, Tamer Kıran, has gone on record saying that maritime companies working with Iran against the U.S. embargo would be blacklisted. Kıran added that his organisation had been handed a list of 199 ships by the United States.

Turkey’s main opposition member of parliament Erdal Aksünger closely followed the Zarrab case after serving on an investigatory commission on related corruption allegations against four government ministers in 2013.

“The issue needs to be divided into several parts, which when combined take on a different significance. The (current) tensions between the United States and Turkey are said to have risen during Obama’s term, but I believe the government’s duplicitous policies that came to light with the Zarrab case had an effect,” Aksünger said.

He said. President Barack Obama’s 2015 nuclear deal with Iran had benefited Turkey the most, since it allowed Turkey to import as much oil and gas as required from its neighbour. 

But that opportunity disappeared with President Donald Trump’s hard line policy on Iran, and U.S.-Turkish relations have soured in recent years over several unresolved disputes, including the Halkbank trial.

“The United States had given Turkey a six-month exemption, but it was known that by the end of this process things would continue as they were, with the necessary appearances kept. According to some tips and claims I received, it wasn’t just Palmali but several other Turkish companies that transported Iranian oil to the UAE and Qatar,” Aksünger said. 

“Iran is a country under embargo, and this action could be considered ordinary for them, but the main issue is the ambiguous policies of the people who govern our country,” he said.

Shipping inspector Yörük Işık said the issue could develop into a more serious problem if Palmali owed large amounts to Turkish banks.

“OFAC doesn’t have a direct connection with maritime law. This is all about the native laws of the United States. However, OFAC can intervene at this point: If Palmali or any other company to break the embargo wish to take out a loan from a bank in Turkey, if that company has any relationship to the United States, the request for the loan won’t be processed,” said Işık.

“The key point here is to have contact with the United States in some way. On the other hand, if a company breaks the embargo despite its direct or indirect connection with the United States, they would be fined a minimum of $65,000 per trip. At the end of the day, Palmali is still a corporate body. I do not believe Turkey would be affected at this point,” he said.