Shipping firms shy away from Iran despite deal to ease sanctions
Monday, 2 June 2014 00:00
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Reuters: Global shipping lines are increasingly shying away from handling cargoes to Iran as restrictions on banking and insurance continue unabated, despite an interim agreement between Tehran and the West that called for limited sanctions relief.
Iran in the past depended on foreign ships for much of its imports, but it is now relying more on land routes and its own commercial fleet. Earlier this month, trade sources said hundreds of thousands of tonnes of grain and sugar were stuck in transit.
Iran was never barred from buying food or other humanitarian goods under sanctions imposed by the European Union and the United States because of its disputed nuclear program, but the restrictions have hit approved deals as well.
“The principle sanction against non-US companies is that they can be denied access to US banking, and therefore they can’t trade in US dollars,” said Doug Maag of law firm Clyde & Co. “That is a very real and adverse result.”
Global shipping fees are transacted in US dollars, which means dealing with Iran could make companies vulnerable to being frozen out of the US financial system.
Iran and Western governments reached an interim agreement in November last year over Tehran’s nuclear work in exchange for limited sanctions relief for six months – from January to July this year – under the Joint Plan of Action (JPOA).
Correspondence since January seen by Reuters shows that US group United Against Nuclear Iran (UANI), whose board includes former heads of the CIA and British intelligence, continues to monitor European shipping companies on any deals with Iran.
“The risks of doing business with Iran are still far too great to return. It is too soon,” said Mark Wallace of UANI, which has targeted companies trading in Iran. “People are nervous,” said Wallace, a former US Ambassador to the United Nations.
Greece-based Efploia Shipping wrote in a recent letter to UANI, “Owners do not take such matters lightly … and have implemented several exhaustive clauses in order to ensure that such trade is legitimate.”
The firm did not respond to requests for comment.
The 2011 blacklisting of Iranian port operator Tidewater Middle East Co, which operates seven terminals including the biggest container port Bandar Abbas and major grain terminal Bandar Imam Khomeini, has also discouraged foreign shipping firms.
Maersk Line, the world’s biggest container company, pulled out entirely from Iran in 2012, joining an exodus that has included major groups MSC and CMA CGM and smaller firms.
