Iran uses shell firms to keep military cargo secret

As Iran refuses rein in its nuclear ambitions,the UN Security Council is poised to vote on sanctions of its own.

On January 24,2009,a freighter with a Hong Kong flag arrived in the South African port of Durban. The stop was not on its route. It stayed just long enough to pick up clandestine cargo: a Bladerunner 51 speedboat that can be armed with torpedoes and used as a fast-attack craft in the Persian Gulf.

The name on the ships side as it made for Iranian port of Bandar Abbas was the Diplomat,and its papers showed it was owned by a company called Starry Shine Ltd. Six months earlier,the Diplomat had been the Iran Mufateh,part of a fleet owned by state-owned Islamic Republic of Iran Shipping Lines,known as Irisl.

Months after the Durban episode,the US government said Irisl had renamed the ship and set up Starry Shine to evade American export controls aimed at preventing Iran from obtaining military technology like the Bladerunner 51. By then,the freighter had another name: the Amplify. Last spotted this April in Karachi,the Amplify was under new management and had a mysterious new owner.

The Mufateh-Diplomat-Amplify is part of a disappearing act in which Irisl,under pressure from sanctions,has been obscuring true ownership of its vessels in a web of shell companies.

Formed mostly after the US blacklisted Irisl and all of its ships in 2008,as confederates of Irans nuclear and ballistic-missile programs,the corporations often have English names like System Wise and Great Method,which mock American resolve.

As Iran refuses rein in its nuclear ambitions,the UN Security Council is poised to vote on sanctions of its own. Several provisions focus on Irisl,which according to the UN to has been involved in a plot to smuggle weapons.

Iran has used a succession of strategems changing not just ships flags and names but their owners,operators and managers,too to stay one step ahead of such sanctions. We are dealing with people who are as smart as we are,and of course they can read our list, said Stuart A Levey,the undersecretary of Treasury who oversees sanctions effort and blacklist of Irisl.

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That blacklist,The Times found,simply hasnt kept up. Of the 123 Irisl ships listed,only 46 are still clearly owned by Irisl or its US listed subsidiaries,according to an analysis of data from IHS Fairplay,in Britain,which issues large merchant vessels their unique identifying numbers. Four were scuttled. The rest 73 are now on record as owned and operated by firms not on the blacklist. The firms are located far from Iran,in Malta,Hong Kong,Cyprus,Germany and Isle of Man. In all but 10 instances,The Times was able to establish links between the ships new owners and Irisl.

The firms are either run by Irisl officials,set up at their behest or wholly owned by Irisl,corporate records and interviews show. Most of the companies ships are operated and managed by three newfound Iranian companies that can be found not at the addresses provided to IHS Fairplay,but at Irisl facilities in Tehran. The companies are Hafiz Darya Shipping Lines,Sapid Shipping and Soroush Sarzamin Asatir.

The Amplifys registered owner is a Hong Kong firm Smart Day Holdings,which in turn lists as directors a company in Samoa and another on the Isle of Man. The Isle of Man firm,Shallon,is part of a network set up with the help of Nigel Howard Malpass,a British shipping consultant who serves on the boards of Smart Day and companies connected to 43 other ships previously registered to Irisl. And shares of many of those companies are held by yet another Isle of Man firm,Woking Ltd,which is wholly owned by Irisl.

Irisl has denied aiding Irans military and nuclear programmes. American officials involved in drafting sanctions say they will take into account Irisls shell game. They plan to expand a 2008 UN provision calling for Irisl ships to be boarded at sea or in port if there are believed to have contraband. The new proposal calls for inspections of all such ships even if Irisl is not the owner.