US stranglehold on Iran tightens as Maltese shipping and ‘front’ firms sanctioned

The stranglehold on Iran is tightening as ten more shipping firms, ‘fronts’ and one man in Malta are made the subject of US Treasury sanctions. All the entities mentioned are connected to the Islamic Republic of Iran Shipping Lines – also known as IRISL – and Irano Hind. Both firms are the subject of US sanctions since 2007 and 2010 respectively. Irano Hind is a joint venture between IRISL and the Shipping Corporation of India.

Front companies are set up by one entity to shield itself from legal liability. They are a device used by governments, intelligence agencies and organised criminal groups alike to disguise the true ownership or  origin of an enquiry, exchange, trade or transaction.

According to the US, IRISL and Irano Hind relied upon ‘front’ companies and agents to continue trade by circumventing increasingly tight sanctions preventing firms from doing business with Iran. The Treasury designation related to the Executive Order 13382 which aims to stop the proliferation of weapons of mass destruction.

The entities listed are based in Malta. The ten names and more identifying details appear on the treasury note. The list does not go into detail about which firms are suspected ‘fronts’ and which are not. The individual named is Jamshid Khalili, the Iranian CEO and Managing Director of the Irano Hind business.

Sanctions observers have questioned how Iran will continue trade at all given the recent ban on transacting with the Central Bank. While the US, HMT and EU sanctions do not provide an absolute global ban on trade – there are still some jurisdictions which will trade with Iran in diverse currencies – the ban is sending a strong message to any firm with existing business and commercial ties with Iran and Iranian entities. While some speculated that Iran might return to a barter system exchanging goods of equal value with external trade partners, if using the shipping and supply lines into the country is also prohibited, vital supplies will soon run out.


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