UANI Reveals Fraudulent Iranian Shipping Scheme to Evade International Oil Sanctions Through Manipulation of Fujairah, Dubai, Philippines, Tanzania, and U.S.

New York, NY - On Friday, United Against Nuclear Iran (UANI) revealed the results of a new investigation into the Iranian regime's actions to evade international oil sanctions.

 

UANI's investigation is based on shipping information, news reports, and information from whistleblowers. The results of the investigation reveal that Iran has been orchestrating a fraudulent shipping scheme within the jurisdiction of Fujairah, in the UAE, with the assistance of the Dubai/U.S.-based criminal enterprise, Philtex Corporation.

 

UANI has contacted the leaders of Fujairah, Dubai, the Philippines, Tanzania, and the U.S., to make them aware of the Iranian regime's systematic scheme, and to seek their assistance in stopping the elements of the scheme that are occurring within their respective jurisdictions.

 

UANI explains in detail that Iran uses the illegitimate front company Philtex (based in Dubai and Austin, TX), and Philtex's fraudulent classification society, the Philippines-based American Register of Shipping (ARS), to provide key shipping documentation and classification for its illicit oil-carrying ships. The Iranian vessels make transshipments using offshore anchorages in Fujairah, and, with the assistance of Philtex, fly "flags of convenience" illicitly-acquired from Zanzibar and Tanzania that mask their Iranian origins.

 

UANI has previously called on Philtex, headed by American Chris Warren, to end its deceptive and illegal classification activities and support for the Iranian regime. Recently, UANI received a threatening screed from Philtex, which is cited in UANI's letter.

 

UANI has also previously asked Tanzania to take action to prevent Iranian vessels from continuing to sail the seas with Tanzanian flags.

 

In a letter with exhibits sent to: U.S. President Barack Obama; Ruler of Fujairah, Sheikh Hamad bin Mohammed al Sharqi; Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum; Phillipines President Benigno Aquino III; and Tanzania President Jakaya Kikwete; UANI CEO, Ambassador Mark D. Wallace, wrote:

 

... The purpose of this letter is to inform you of this Iranian-sponsored fraud, which is designed to avoid the full impact of oil sanctions against Iran (the "Sanctions Fraud") and to seek your assistance in stopping the elements of the schemes that operate within your jurisdiction. Unfortunately, this Sanctions Fraud is perpetrated at least in part within the jurisdiction of the Emirate of Fujairah and its important port/bunkering hub, and with the assistance of a Dubai/United States-based criminal enterprise, Philtex Corporation and its affiliate the American Register of Shipping ("ARS") that appears to predominantly operate in the Philippines. The Sanctions Fraud enables Iran to avoid the impact of international sanctions and to sell and trade far more oil than would be permitted under international law. 

 

By this letter, we respectfully request that you take immediate action to end this fraud and/or the parts of the fraud that occur within your jurisdiction and specifically in Dubai, Fujairah, the Philippines and the United States.

 

****

The Iranian regime has sought to evade these sanctions and ship illicit oil.  In order to do so it has created an elaborate scheme to illicitly classify, document and flag Iranian oil tankers.

1. Iran uses an illegitimate front company, Philtex, (based in Dubai and the United States) to provide key shipping documentation;
2. Iran uses an illegitimate front company that purports to be a classification society, ARS (controlled by Philtex and based in the Philippines), to provide "classification" for its illicit oil carrying vessels;
3. Iran uses a front P&I club created and controlled by Iran's Islamic Revolutionary Guard Corps, Kish P&I Club, to fraudulently satisfy international shipping requirements; and
4. With the assistance of Philtex and ARS, Iran has employed illicitly acquired "flags of convenience" by misusing the ship registries of Zanzibar and Tanzania, among others.

            This Sanctions Fraud has enabled Iran to engage in an oil smuggling operation primarily based out of the port of Fujairah, wherein sanctions waiver recipient countries are duped into buying additional Iranian oil mislabeled as Iraqi Special Blend.

 

****

On November 30, 2012, UANI wrote to Philtex requesting that they immediately cease and desist from their illicit activity. ... UANI received a "response" purportedly from Philtex. Its offensive tone is only exceeded by its irrational content. ...

 

Recently, UANI has come into possession of copies of fraudulent documents associated with Philtex and ARS specifically as related to the U.S.-blacklisted NITC vessel currently known as the "Midsea." The Midsea is a dramatic case study for the fraudulent activity of Philtex and ARS on behalf of Iran.

 

****

 

Kish P&I Club - Bogus Shipping Insurance

  

As reported by various media outlets, Iran is no longer able to procure legitimate shipping insurance for its vessels. In the absence of real insurance, Iran has created a bogus and untested insurance company called Kish P&I. Kish P&I is an Iranian regime front that is controlled by the IRGC. ... No legitimate port authority should accept such claims of insurance from Kish P&I and indeed it is an essential part of Iran's scheme to smuggle oil as detailed herein.

 

Illicit Flagging

 

Over the course of the last year, various countries have declined to flag Iranian vessels. ... Yet Philtex and ARS continue to use the Tanzania Zanzibar International Register of Shipping ("TZIRS") as the authority by which it classifies and documents vessels like vessel 9079092. ARS utilized the letterhead of the Tanzania Zanzibar International Register of Shipping to purportedly attest to the legitimacy of the Kish P&I insurance for vessel 9079092.

 

                        The Smuggling Route and Method

 

UANI has obtained additional satellite tracking images for NITC vessels that operate in a similar manner to the Midsea and illustrate the methods used in the Sanctions Fraud. The NITC vessels "Azalea" (IMO 9357365), "Clove" (IMO 917450), "Seahorse" (IMO 9356608), "Valor" (IMO 9212917), "Magnolia" (IMO 9172052), and "Millionaire" (IMO 9357391) can be observed disabling their AIS transponders to disguise unscheduled stops in Iranian ports and Fujairah ship-to-ship transfer anchorages. Iran has used "ship-to-ship transfers, discharging and loading at remote ports and "blending" of Iranian oil with others," to circumvent sanctions and sell its fuel oil to Asia.

 

UANI has highlighted the shipping industry as an area where the international community can further pressure Iran. In a 2012 Wall Street Journal Op-Ed, six UANI board members wrote that "the world must deny Iran's access to international shipping, a move that would severely affect the regime given its dependence on global trade and seaborne crude oil exports."

 

Last year, all thirteen of the world's major classification socieities stopped certifying Iranian vessels following UANI's campaign, including Bureau Veritas, Germanischer Lloyd, the Russian Maritime Register of Shipping, Korean Register of Shipping, China Classification Society, and ClassNK. UANI has also announced that Barbados, Hong Kong, Moldova and Mongolia have stopped their reflagging of Iranian vessels.

 

Click here to read UANI's full letter to Fujairah, Dubai, the Philippines, Tanzania, and the U.S., and UANI's exhibits.

Click here to read UANI's full November 30 letter to Philtex.

Click here to read UANI's November 27 letter to Tanzania.

Click here to read UANI's November 21 letter to Tanzania.

Click here to learn more about UANI's Shipping Campaign.