• Fri
  • Dec 26, 2014
  • Updated: 9:47am

Uncertain future in HK for Iranian shipping line

PUBLISHED : Wednesday, 30 March, 2011, 12:00am
UPDATED : Wednesday, 30 March, 2011, 12:00am

Hong Kong may have updated its sanctions against Iran, but it is not clear whether it will have the power to shut down the global sanctions-busting network that operates in the city.

More than two dozen shell companies have been established in Hong Kong since 2008 as part of a network helping Iran's national shipping line avoid restrictions aimed at shutting it out of international trade.

The Hong Kong government was non-committal yesterday on how or if the legislation to implement the latest UN resolution on Iran - gazetted on Friday, nine months after the resolution was passed - would enable it to act against the Islamic Republic of Iran Shipping Lines (IRISL).

The United States, which is spearheading efforts against IRISL, said it was still studying the details.

The line, which has been internationally censured for aiding Iran's nuclear and weapons programmes, has worked to evade sanctions by masking the identity of its fleet though a web of shell firms around the world, including in Germany, Cyprus, Malta and Hong Kong.

Nineteen of the Hong Kong companies operate as nominal owners of IRISL's ships, which are registered in the city and Malta. A few also carry the mortgages for several of IRISL's ships, which are held by Iranian banks sanctioned by the US, Britain and the European Union.

'Everyone knows we use these hide-and-seek tactics, but the point is whether they can catch us out,' said a mid-ranking IRISL official, according to a report published last week by the Institute for War & Peace Reporting.

In the same report, an international law expert with IRISL said jurisdictions such as Hong Kong 'don't have rules and regulations that will disrupt our operations'.

After the UN Security Council passed the fourth round of sanctions against Iran in June - including tighter curbs on IRISL - Germany, Cyprus and Malta, as part of the EU, not only adopted them but also enacted harsher unilateral sanctions against the shipping line. The sanctions included additional designations for visa bans and asset freezes on IRISL. When fully implemented, they will shut down parts of its network in the three countries and further constrain its business in Europe.

Asked whether Hong Kong authorities would take action against IRISL in light of the updated sanctions, a spokeswoman for the Commerce and Economic Development Bureau said the regulation 'applies to all Hong Kong persons and entities. We will also continue to exercise vigilance in enforcing the law'.

US consulate spokesman Matthew Dolbow said: 'We welcome the Hong Kong government's amendments to the United Nations Sanctions Ordinance, intended to implement [Resolution] 1929, but we are still reviewing the details.'

The new regulation came as US congressmen were raising concerns over links with Iranian shipping firms. It says Hong Kong will deny service to any ships linked to Iran.

Sanctioning it

June 9, 2010 UN Security Council adopts fourth round of sanctions against Iran over its nuclear programme

June 2010 Chinese Ministry of Foreign Affairs instructs Hong Kong to implement regulations accordingly

January 13, 2011 US government sanctions 20 shipping companies in Hong Kong for operating as fronts for the Islamic Republic of Iran Shipping Lines

March 22, 2011 Chief Executive Donald Tsang Yam-kuen orders enactment of United Nations Sanctions (Iran) (Amendment) Regulations 2011

March 25, 2011 Amendment regulations gazetted and come into effect

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