US Treasury sanctions 7 Panamanian-flagged vessels for illicit activities

The vessels listed by OFAC are accused of manipulating their automatic identification systems to disguise their movements

These ships have been involved in transporting Iranian products to support destabilizing activities and financing terrorist groups. The United States Department of the Treasury, through its Office of Foreign Assets Control (OFAC), imposed sanctions on September 26 on more than a dozen entities and vessels involved in shipping Iranian crude oil and liquefied petroleum gas to Syria and East Asia on behalf of the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF) and Hezbollah, Newsroom Panama reported.

Among the sanctioned vessels, seven fly the Panamanian flag. These seven vessels, including crude oil tankers Eternal Success, Eternal 8 and Eternal Peace, are associated with Star Ocean Shipmanage Ltd., registered in the Marshall Islands and based in the People’s Republic of China. The vessels were used by the IRGC-QF to facilitate illicit trade. These include the Panamanian-flagged vessels Serene I, registered to Dragon Road Ltd., Feng Tai, owned by Tai Feng Hai Shipping Limited, Confidence P, managed by Abdul Jalil Mallah, and Rival, also linked to Mallah’s network.  

These ships have been involved in transporting Iranian products to support destabilizing activities and financing terrorist groups. The ship registry is a service provided by Panama. The vessels, despite having the flag, are owned by shipowners of other nationalities. One of the benefits of having a Panamanian flag is that income derived from international maritime trade by these vessels is not subject to income tax in Panama. These vessels only have to pay taxes and fees based on their tonnage.  To fly the flag, they must comply with a series of requirements established in conventions of the International Maritime Organization (IMO). The vessels listed by OFAC are accused of manipulating their automatic identification systems to disguise their movements as they sailed to East Asia, where they were carrying out ship-to-ship cargo transfers.  

Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith noted that “the Islamic Republic of Iran remains heavily dependent on the illicit sale of oil and gas to fund its terrorist proxies and their destabilizing activities. Treasury remains committed to disrupting the shipping, brokerage, and purchasing networks that facilitate these schemes.”  As a result, all assets and interests of these entities and vessels in the United States or under the control of U.S. persons are blocked, and transactions with them are prohibited.  This is not the first time that a vessel sailing under the Panamanian flag has been sanctioned by OFAC.  In March of this year, the Marshall Islands-registered shipping company Vishnu Inc. and its vessel Lady Sophia were added to the list for allegedly being used to deliver aid to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Houthi facilitator Sa’id al-Jamal, who has previously been targeted by U.S. authorities for financing terrorist activities.