US embassy cables | ‘Malta pushed away Iranian business’ over Irisl trade sanctions

The United States urged Malta to approach law firms so that they institute “enhanced vigilance” over transactions with the Islamic Republic of Iran Shipping Line (Irisl), which used a network of Malta-based ‘ghost companies’ to evade UN Security Council restrictions.

US embassy cables leaked by Wikileaks show that back in April 2009, Treasury under-secretary Stuart Levey met with Alan Caruana, head of secretariat in the finance ministry to discuss Irisl’s operations in Malta.

The Maltese government has formally adopted EU sanctions against various branches and subsidiaries of Irisl, which has used a network of front companies in Malta to evade restrictions on its trade. There are at least 42 Irisl-owned companies which own ships formerly belonging to Irisl. Instead they use the services of the Maltese-owned Royal-Med Shipping Agency, in Sliema, which is the agent for the private Iranian company  Hafiz Darya Shipping Lines (HDS). HDS was created in 2009 shortly after the US and UK hit Irisl with trading bans over its alleged role in supplying Iran’s nuclear weapons programme.

Almost half of Irisl’s fleet was renamed and registered under the Maltese flag.

“During these meetings, Caruana was receptive to the US message and shared a document containing shipping statistics for Irisl in 2008,” the cable from the Secretary of State Hillary Clinton says.

“Caruana indicated that since his last meeting with Levey in April 2008, the Maltese government had pushed away Iranian business, which is not always legal.”

The cable reveals that upon returning to Malta, Caruana offered the US chargé d’affaires to assist US authorities in their attempts to find any data that may exist but was not made available to the public. “Caruana mentioned that the US and Malta had a good policy of sharing information and a strong relationship with the US Embassy.”

The cable also reveals that in February 2009, law firm Ganado and Associates terminated all aspects of its professional relationship with IRISL. “The firm cited a number of reasons, to include compliance with UN and US sanctions, as well as Maltese anti-money laundering laws as reasons for terminating its relationship with Irisl.”

The sanctions implemented last week by Malta freeze all funds and economic resources belonging to various Irisl companies that are using Malta as a ‘haven’ to transfer Iranian cargo ships from one ghost company to the other, in a bid to evade trade bans.

Among the Malta-based companies and parent companies which had their assets frozen are South Shipping Line Iran, Bushehr Shipping Company, Hafiz Darya Shipping Lines – the main Irisl agent in Malta – ISI Maritime (Malta), and Marble Shipping.

The New York Times has established that HDS operates out of the third floor of Irisl’s main headquarters in Aseman Tower, in Tehran.

HDS acts as the ship manager of various Malta-flagged ships that previously belonged to Irisl, but which have now been transferred to these shell companies, with the ship names changed from their Iranian appellations into innocuous English-sounding names.

So for example, the M/V Iran Kerman has now changed its Iranian-sounding name to the innocuous-sounding Silver Craft, and is owned by Kerman Shipping, which is registered at Tower Road, Sliema. Whereas before, running a compliance check on a transaction involving this ship would have raised several red flags, the new name allowed the same transactions to appear clean.