US places sanctions on Iranian firms that insure oil shipments

The Obama administration has imposed sanctions on Iranian companies it says provide insurance services to the country’s main petroleum shipper, part of the latest U.S. effort to choke funding to the Iran’s disputed nuclear program.

The U.S. State Department said on Thursday it had imposed sanctions on Kish Protection and Indemnity Club, known as Kish P&I, and Bimeh Markazi-Central Insurance of Iran, known as CII. Kish provides insurance for the National Iranian Tanker Co, or NITC, and CII provides the shipper with reinsurance, it said.

The Iranian companies had been modeled after European P&I clubs which had been banned by Western sanctions imposed last year.

The department also placed a visa ban on six corporate officers with the companies.

The measures were part of moves reported on Thursday by Reuters in which State Department and the U.S. Treasury slapped sanctions on a Greek shipping tycoon, saying he secretly operated a shipping network on behalf of Tehran to get around sanctions on the country’s oil sales.

Countries in the West believe Iran’s nuclear program is developing weapons. Tehran says the program is purely for civilian purposes.

U.S. and European Union sanctions imposed last year halved Iran’s oil exports to about 1 million barrels per day. The sanctions also helped push down Iran’s currency, the rial, and sent inflation soaring to about 25 percent.

A proponent of tough measures on Iran said the sanctions on Iranian insurance companies are making it hard for Tehran to sell oil.

“These measures have so increased the hassle factor of buying Iranian oil that they are leading countries like India to make decisions in their self interest to significantly decrease their purchases of Iranian oil,” said Mark Dubowitz, with the Washington based Foundation for Defense of Democracies.

On Wednesday, lawmakers in the U.S. Congress urged the administration to crack down on the reflagging of ships that carry Iranian oil to avoid sanctions.

“We are concerned that Iran has been able to continue its illicit shipping endeavors through its complex web of vessels reflagging. It troubles us that Iran has been aided by countries whose shipping registries are frequently complicit in this shell game,” said the letter on behalf of 56 U.S. Representatives, 18 of them Democrats.

The letter was signed by Ed Royce of California, the Republican chairman of the chamber’s foreign affairs committee, and Debbie Wasserman Schultz, a Florida Democrat.

They urged the departments of State and Treasury to seriously consider sanctioning registries that knowingly participate in efforts to reflag oil tankers and cargo tankers operated by NITC and the Islamic Republic of Iran Shipping Line, or IRISL.

A U.S. Treasury spokesman said: “We will continue to expose NITC and IRISL’s ongoing business practices designed to deceive the international community and evade sanctions.”

The letter also urged the Treasury Department to review three vessels to determine whether they should be added to its list of blacklisted ships. The letter named the ships as the Tour 2, The Justice, and the Elegance.

Iran’s crude exports in March may plunge by a quarter from a month earlier to the lowest level since Western sanctions came into effect last year, industry sources said.

India’s biggest buyer of Iranian crude Mangalore Refinery & Petrochemicals Ltd said last week it will have to stop its purchases.

 – Reuters