US authorities say companies in Iran are using forged shipping documents, vessel impersonation techniques and UAE-based front companies to circumvent sanctions and export oil.

The US Department of Justice makes the allegations in a forfeiture claim filed in early February. It is attempting to seize 2 million barrels of oil currently aboard Achilleas, a Liberia-flagged tanker, that it says originates in Iran and is being sold to support the Islamic Revolutionary Guard Corps (IRGC), which it has designated as a terrorist organisation.

“Profits from oil sales support the IRGC’s full range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad,” the department says.

The case marks the US’ second attempt to use forfeiture proceedings as a means of confiscating sanctioned cargo, having raided a vessel in August 2020 that was transporting Iranian oil to Venezuela, also subject to US trade restrictions.

In this case, however, officials outline several of the techniques it says the Iranian regime has used to avoid detection.

“Participants in the scheme attempted to disguise the origin of the oil using ship-to-ship transfers, falsified documents, and other means, and provided a fraudulent bill of lading to deceive the owners of the Achilleas into loading the oil in question,” the justice department says.

Iranian officials deny the claims, with deputy oil minister Amir Hossein Zamaninia telling reporters on Sunday: “I don’t know anything about it.”


Sophisticated techniques

The US complaint says the first part of the transaction took place in May 2020, when Sarak – a tanker owned by Yam Shipping Inc that was already subject to US sanctions – loaded cargo at Iran’s Sirri Island oil terminal.

The following month, another sanctioned vessel – Sonia, owned by Alp Shipping Inc – also loaded oil, this time at the terminal on Kharg Island.

A third vessel, Iran-flagged Humanity, was then deployed. However, according to the US complaint, the ship manipulated data transmitted by its automatic identification system (AIS) in order to assume the identity of another tanker, Lubov.

Humanity – now disguised as Lubov – stopped reporting its location in the Gulf of Oman, but was tracked to the Persian Gulf by satellite imagery.

Meanwhile, the real Lubov carried out ship-to-ship transfers with Sarak and Sonia, taking on board a total of 2 million barrels of Iranian oil, before sailing to the Persian Gulf. At this point Humanity switched back to reporting its own identity, rather than that of Lubov.

Using ship-to-ship transfers, the oil was then loaded from Lubov onto Trident Liberty, and in November, transferred again onto Achillaus – the vessel subject to the US forfeiture action.

The owners of Achillaus were fooled into believing the oil was of Iraqi origin after being presented with a forged bill of lading by Benchmark Ship Management, the complaint says.

Benchmark is believed to be a front company for an Iranian oil producer, which has repeatedly used fake documents “to hide the Iranian origin of the petroleum products it ships from shipping companies and port authorities in order to avoid scrutiny and detection that the cargo is being shipped by IRGC front companies”, the complaint adds, citing a confidential source.

Another front company, UAE-based Atlas Ship Management, is also named in the complaint, although it is not stated whether it had any role in the transaction.

As of press time, and according to publicly available data, Achillaus is en route to the US having last docked in Fujairah in the UAE in December.


Due diligence

US sanctions authorities are paying increasing attention to maritime trade, particularly since the publication of a landmark advisory in May last year.

That advisory, issued by the Office of Foreign Assets Control (OFAC), urged all those involved in seaborne trade – including banks, insurers and shipping companies – to carry out rigorous due diligence and activity monitoring of vessels.

However, it is rare for US regulators or government bodies to describe in detail the sophisticated techniques used by sanctioned entities to avoid detection.

“It’s important this is seen in the right context,” says Simon Ring, global head of regulatory technologies at maritime intelligence company Pole Star. “It’s a small percentage of transactions where these illicit processes go on.

“But there’s no doubt that for every bank or trading company, this is right at the front of everyone’s mind, and in our experience, criminals are getting better at not being detected.”

Ring tells GTR that AIS transmission often plays an important role, and not just when a ship stops reporting its location. “MMSI numbers are issued to vessels by flag administrations upon registration. Unlike vessel IMO numbers, MMSI numbers are not unique,” he explains.

“The MMSI number is the method used to identify AIS signals transmitted by a vessel and, in some cases, the swapping of these numbers has been used to falsify a vessel location.”

Other potential red flags in the OFAC advisory included frequent changes in the country a vessel is affiliated with, complex ownership structures, and even efforts to paint over or disguise a ship’s name or identification number.

For Ring, the first stage in tackling those issues is before engaging with a vessel, by carrying out due diligence on the companies involved, their activity and their management.

“The next part is actually monitoring transactions, and you’ve got to be re-screening vessels and their benefactors every 24 hours to ensure that nothing has changed mid-voyage, leaving you open to sanctions violations,” he says.

“If you’re operating in high-risk jurisdictions, carrying out ship-to-ship transfers, we strongly recommend using a hybrid solution – such as using Inmarsat tracking in conjunction with AIS – to tell what a vessel does when it goes dark.”