[141019.EN.SEA] COSCO Tankers Go Dark Following Imposition Of US Sanctions

NEARLY thirty per cent of the tankers owned by COSCO Shipping Tanker (Dalian) have shut off their automatic identification systems (AIS) after the US imposed sanctions on the company on September 25 for allegedly shipping Iranian crude.

Ship tracking data from Refinitiv Eikon indicates that in the week ending October 7, fourteen tankers, including nine VLCCs, have gone dark, reports Fort Lauderdale's Maritime Executive citing Reuters.

At the time when the sanctions were imposed, the US Department of State said the company, along with five others, were knowingly engaging in a significant transaction for the transport of oil from Iran in defiance of sanctions set in place in November 2018.

The firms directly sanctioned under Executive Order (E O) 13846 were: China Concord Petroleum Co, Limited, Kunlun Shipping Company Limited, Pegasus 88 Limited, and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co. Additional sanctions were imposed on the following two Chinese companies which own or control one or more of the companies: Kunlun Holding Company Ltd and COSCO Shipping Tanker (Dalian) Co Ltd.

Reuters also reports that Russia's Novatek is examining the possibility of transshipping its Yamal LNG cargoes in Norway or Murmansk because it is unsure of the impact that US sanctions will have on the COSCO tankers it is currently using.

US shipowner Teekay LNG has voiced concern, because it is in a joint venture for Yamal LNG shipping with China LNG Shipping (Holdings) - which is 50 per cent owned by COSCO Dalian. The joint venture owns four on-the-water ARC7 LNG carriers and two ARC7 LNG carrier newbuildings. As a result of China LNG Shipping (Holdings) 50 per cent interest, the Yamal LNG Joint Venture also currently qualifies as a "Blocked Person" under sanction rules, says Teekay.

Earlier this year, the US blacklisted Chinese state energy company Zhuhai Zhenrong Co Ltd. for allegedly buying oil from Iran.

Last week, the US Department of State imposed further sanctions on Chinese entities, this time because of human rights abuses. Michael R Pompeo, Secretary of State, said: "The Chinese government has instituted a highly repressive campaign against Uighurs, ethnic Kazakhs, Kyrgyz, and other members of Muslim minority groups in the Xinjiang Uighur Autonomous Region (Xinjiang) that includes mass detentions in internment camps; pervasive, high-tech surveillance; draconian controls on expressions of cultural and religious identities; and coercion of individuals to return from abroad to an often perilous fate in China."

The sanctions place visa restrictions on some Chinese government and Communist Party officials and complement an announcement by the Department of Commerce regarding the imposition of export restrictions on US products exported to 28 entities, including elements of the Public Security Bureau and commercial companies in Xinjiang.

Source : HKSG.