Rosett in the WSJ: Blacklisted Iranian Tankers Bypass Sanctions

American negotiators and their cohorts are trying to close a deal that would let Iran keep its nuclear program, subject to intricate conditions of monitoring and enforcement. Yet how is a deal like that supposed to be verified? The Obama administration can’t even keep up with the Iran-linked oil tankers on the U.S. blacklist.

Currently, there are at least 55 of these tankers the Treasury Department says are under U.S. sanctions. These are large ships, major links in the oil chain that sustains the Tehran regime, many of them calling at ports from Turkey to China. They are easier to spot and track than, say, smuggled nuclear parts (which, in a pinch, they could potentially squeeze on board).

But Iran has engaged for years in what Treasury called “deceptive practices” to dodge sanctions. These include trying to mask the identities, and sometimes the smuggling activities, of its blacklisted ships by renaming them, reflagging them to other countries, veiling their ownership behind front companies, presenting false documents, and engaging in illicit ship-to-ship oil transfers.

The result, according to information on Treasury’s publicly available blacklist, is that the U.S. government cannot establish under what flag at least 31 of these tankers are doing business. They can be identified by their unique seven-digit hull numbers, or IMO numbers, issued for the life of each ship. But a ship’s flag also is a vital identifier, one under which it signals its position, carries cargo and presents credentials to visit ports, buy insurance and pay fees. On Treasury’s Specially Designated Nationals list, which helps ensure global compliance with U.S. sanctions, in the category of “flag” for these 31 tankers Treasury states: “none identified.”

Under terms of the November 2013 Joint Plan of Action that frames the Iran nuclear talks, the U.S. does grant temporary waivers for a handful of places to buy Iranian oil in limited quantities: Turkey, India, China, Japan, South Korea and Taiwan. This means that some activities of these tankers may be legitimate. Other activities—say, unloading oil en route to customers not on the waiver list—could potentially involve violations of sanctions and mean penalties for anyone who does business with them, such as being cut off from trade or financial transactions with the U.S.

Typical of Iran’s shrouded tanker fleet is the blacklisted ship called the Sinopa, previously named the Superior and before that, the Daisy. Since early 2014, the Sinopa has visited India and China. It has also made multiple trips from Iran to Turkey, via the Suez Canal, according to Lloyd’s List Intelligence shipping database, the main source of ship-tracking data for this article. Judging by Treasury’s blacklist, the Sinopa—which Treasury still describes under her previous name of Superior—has done all of this under no identified flag. Why not—what is she hiding? The Treasury refuses to comment on specific cases.

Most of these phantom-flagged tankers are linked to Iran’s main tanker enterprise, NITC, formerly called the National Iranian Tanker Company. About seven or eight years ago, NITC tried to escape tightening U.S. sanctions by reflagging more than three dozen of its tankers to Cyprus and Malta. In 2012 the U.S. and European Union imposed sanctions on NITC, which forced the Iran-linked ships off EU registries.

The tankers quickly reflagged to the more obscure registries of Tanzania and the Pacific island nation of Tuvalu. They were also renamed: For instance, the Hirmand, flagged to Cyprus, became the Honesty, flagged to Tuvalu. They had new registered owners, too—an array of front companies in places ranging from the Seychelles to Tanzania to a post office box in Tuvalu.

In August 2012, Sens. Robert Menendez and Mark Kirk wrote a bipartisan letter to President Obama, urging him to blacklist the shipping registries of Tuvalu and Tanzania for “their participation in Iranian attempts to conceal the ownership and control of vessels owned or controlled by the National Iranian Tanker Company (NITC).” Tuvalu swiftly deregistered the Iranian tankers. Although Tanzanian authorities promised to do the same, the U.S. Embassy in Tanzania protested that the host government seemed to be registering many of the Iranian tankers deflagged by Tuvalu.

At the end of 2012, Tanzanian authorities denied that any blacklisted Iranian ships were still registered under their flag. But dozens of Iranian ships were using their onboard Maritime Mobile Service Identity systems to signal as Tanzanian—which is how most of the Iranian tankers currently sailing under no identified flag are signaling to this day.

As for the blacklisted tankers that are registered under known flags, Lloyd’s reports that there are now nine flagged to Tanzania, 10 flagged to the landlocked nation of Mongolia, one registered to the Caribbean island nation of St. Kitts and Nevis, two to Malta, and one tanker that is sailing under the Iranian flag.

The blacklisted tanker flagged to Iran is called the Amin 2. Treasury describes it as linked to the major Iranian shipping enterprise, the Islamic Republic of Iran Shipping Lines (IRISL)—which is under sanctions by the U.S. for “providing logistical services” to Iran’s military. Although Treasury’s public details for the Amin 2 are two years out of date, more-current details can be found on Lloyd’s and in a June 2014 report by the United Nations Panel of Experts on Iran sanctions.

For almost three years, the Amin 2 has been shuttling between Iran and Syria via the Suez Canal. Syria is not on the U.S. list of countries with waivers to buy oil from Iran. Syria is under U.S. sanctions. But the Amin 2 has continued its activity. This is so even though Treasury says the ship is linked to IRISL—and Treasury has blacklisted an Egyptian company for acting as IRISL’s agent in Egypt in relation to weapons of mass destruction, or what Treasury calls “WMD-related actions.”

A Treasury press release about the Egyptian company, called Nefertiti, says it also provides services to Iran’s NITC. According to shipping data on Lloyd’s, since November the Amin 2 has made two round trips from Iran to Syria, calling most recently on March 5 at the Syrian port of Banias.

Under the emerging Iran nuclear deal, especially if sanctions are lifted, how exactly do the U.S. and its partners propose to keep a tighter leash on Iran’s nuclear program than they are now keeping on its shipping traffic?

-Originally published in the Wall Street Journal