HK shell firms helping Iranian shipper may escape penalty

Shell companies set up in Hong Kong to help Iran's national shipping line evade United Nations sanctions might not face punishment because 'they have no actual business operation' here, a senior official told lawmakers yesterday.

Hong Kong last month enacted the latest round of sanctions against Iran passed by the Security Council last June.

More than two dozen shell firms were set up in Hong Kong since 2008 to help IRISL - the Islamic Republic of Iran Shipping Lines globally censured for aiding Tehran's nuclear and weapon programmes - mask its identity and evade the sanctions.

The United States Treasury blacklisted the Hong Kong companies in January because of their ties to IRISL.

Linda Lai Wai-ming, a deputy secretary for commerce and economic development, said the government investigated the companies following the US blacklist.

She told a Legislative Council panel handling the issue: 'On the face of it, [the shipping companies] have no actual business operation in Hong Kong. Of course, if any Hong Kong person or company violates the present statute, we would sanction accordingly,' Lai said. 'The ban is mainly related to financial operations. If any prohibited goods are involved, or ships are used to carry goods that should not be carried, sanctions would also apply. But for other kinds of businesses, the sanction resolution passed by the Security Council poses no limit on them.'