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Shipping company in Greece fined $2.4B for breaching Iran sanctions

In an agreement with the US, the illegal oil export was kept secret for almost five months amid fears of retaliation from Tehran.
One tanker transfers Iranian crude oil from another tanker off the shore of Karystos, Greece, for its transport to the United States at the request of the US judiciary, May 29, 2022.

A Greek shipping company has admitted that one of the vessels it manages violated US sanctions on Iran earlier this year by exporting oil from the Persian Gulf state. The United States fined Empire Navigation Inc. $2.4 billion for the breach, it was revealed on Thursday.

The company and the United States agreed to keep the violation secret for almost five months amid immediate fears of retaliation from Tehran. 

On April 19, Empire Navigation entered a deferred prosecution agreement with Washington to illegally transport almost 1 million barrels of Iranian oil to the United States in the tanker Suez Rajan for it to be seized and forfeited upon arrival, according to an unsealed court document.

The document said the US government had asked the court to keep the proceedings confidential given that “revelation of this action was likely to cause security risks to the defendants, the government, as well as the vessel and its crew members.”

“Due to the public attention this matter has received and the threats of retaliation by the Iranian government, the government seeks the ability to publicly comment on this operation, and the sealed materials, at such time as would minimize risks posed by the threat of Iranian retaliation,” the US government requested in the filing. According to Washington, the arrangement was made public after the oil was offloaded.

In June, the Financial Times reported that the United States had seized the vessel en route to China, leading Iran to respond by seizing the US-flagged Advantage Sweet, carrying Kuwaiti oil for Chevron. 

The Suez Rajaz was positioned for months in the South China Sea, off the northeast coast of Singapore, before it suddenly set off for the coast of Texas without explanation, the Associated Press reported Friday. The tanker arrived off Galveston on May 29, according to the Financial Times, citing location data and satellite imagery. 

Alleged oil sale benefitting IRGC

The court document alleges that Suez Rajaz Limited, the tanker operator, and “others known and unknown to the United States” facilitated the sale of oil from Iran for the benefit of the Islamic Revolutionary Guard Corps (IRGC) and Quds Force, in part through financing in the United States. 

In February, the manager of Empire Navigation had said the company was investigating whether Iranian oil had been transferred onto one of the vessels it manages. The announcement came after the advocacy group United Against Nuclear Iran said in a Feb. 15 letter that it believed Iranian oil was transferred to the Suez Rajan from a ship called the Virgo on Feb. 13.

Suez Rajaz Limited pleaded guilty April 19. Empire Navigation faces three years of probation under a plea agreement with the United States. Circumvention of the sanctions against Iran can have serious consequences, such as losing access to the US dollar financial system or having all assets seized.

The revelations surrounding the Suez Rajaz highlight the murky world of Iranian crude oil smuggling designed to circumvent the US sanctions reimposed after the Donald Trump administration reneged on the 2015 Iran nuclear deal. Over the last few years, the United States has seized several tankers transporting Iranian oil and has blamed Tehran for attacks in the Middle East that followed such actions.

The Iran nuclear deal — the Joint Comprehensive Plan of Action negotiated between Iran and six global powers to limit Tehran's uranium enrichment program in return for lifting sanctions — is all but dead in the water. After Trump announced the United States' withdrawal from the agreement in May 2018, Iran made public its intention to enrich uranium beyond the limits established by the deal. The Vienna-based International Atomic Energy Agency has confirmed that Iran has indeed continued to increase its stockpiles of enriched uranium in violation of the agreement.

Although a revived or new nuclear deal has not been agreed to, the United States has been trying in recent weeks to reach an understanding with Tehran to unfreeze Iranian funds held by its ally South Korea. In return, Tehran would release American citizens imprisoned in Iran.

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