[120212.EN.SEA] US Treasury Warns Hong Kong That Doing Business With Iran's IRISL Is Illegal

CONDUCTING business with the Iranian Republic Islamic Shipping Line (IRISL) contravenes international law, US Treasury undersecretary David Cohen warned shipping executives in Hong Kong recently.

In the past year the United Nations has tightened restrictions on an Iranian shipping company accused of helping Tehran gather materials for its nuclear programme.

Mr Cohen told the Hong Kong gathering that there were 19 ships that the Iranian company renamed and transferred ownership to Hong Kong companies to conceal their identity.

Claudia Rosett, with the Foundation for Defense of Democracies, considered a major conservative think tank, which partly financed by the US Government, said she had investigated IRISL's efforts to avoid sanctions by using records in the Hong Kong Marine Department.

Ms Rosett says one former IRISL ship now registered to a Hong Kong company has even been renamed The Alias, reported Voice of America.

"You start to see what is really an amazing global network of shell companies, deceptive practices and so on, with which Iran has been trying to get around sanctions on its commercial shipping," she said.

Security Council Resolution 1929 has helped locate ships operating under IRISL and turn them away from ports in Europe and North America. The measure has been much less effective in Asia.

The US Treasury Department warns that any organisation found trading with IRISL - even one of its covertly registered entities - would be considered to be helping to thwart the United Nations sanctions.

But Hong Kong marine industry representatives say they do not have the resources adequately to police one of the world's busiest ports, through which almost half a million ships and 268 million tons of cargo pass each year.

Industry representatives say they need extra intelligence to keep IRISL out of Hong Kong and to prevent their business being unfairly tarnished.

Hong Kong Shipowners Association managing director Arthur Bowring said: "It's a minefield for operators; a lawyer's paradise in many ways. It makes life extremely difficult for shipowners, who don't want to trade with Iran, aren't trading with Iran. Yet they are caught up with the associated link," he says.

Mr Bowring said the shipping community was nervous of running afoul of the US Treasury, a view with which Mr Rosett sympathises.

"It's not the intention of the US government to scare people, but to point out that Iran is exploiting the services of Hong Kong's terrific, vibrant business community. The problem really lies with Iran," she said.
Mr Cohen also met with China's four largest state banks and warned them they could face sanctions if they do business with Iranian financial institutions with ties to Iran's nuclear programme. A Chinese Foreign Ministry spokesman later said none of China's business with Iran violates UN resolutions.

Source : HKSG.