The rogue state of Iran has over recent months been quietly packing its bags and moving its ships and shell companies out of Malta, where it has set up something of a temporary sanctions-busting base within the country’s shipping register and registry of companies.
Iran has had something of a sanctions-evading holiday in Malta over recent years and in the process the situation, which has been highlighted several times by major international news outlets, has caused the country’s good reputation a great deal of harm in a number of ways.
Iran’s interest in Malta did not stop at corporate camouflage, shell companies and the renaming of sanctioned ships. The country had also sought to launder money through Malta when it attempted to invest billions of euros in the Maltese banking system, a prospect the Maltese government had refused outright. It also attempted to access Malta’s central bank euro payment system through two Iranian banks located in the United Kingdom. Only recently, authorities in New York fined Standard Chartered, a major British bank, US$340 million for having laundered US$250 billion for the state of Iran.
But as a range of international sanctions – imposed by the United Nations, the European Union and the United States – against Iran and its nuclear development programme continues to tighten the noose, the Iranian regime apparently no longer views Malta as a suitable place from which to conceal its shady shipping activities.
‘Sunny Malta, Iranian hideout’ is how a recent Reuters investigation described Iran’s use of Malta and its shipping registry to circumnavigate international sanctions against its nuclear and other programmes – a damning verdict directly linking Malta to the rogue state’s illicit activities.
Dozens of Iranian ships and dozens of Iranian companies have been registered in Malta over recent years in what has been described as “corporate camouflage” aimed at circumventing sanctions by replacing the ships’ Iranian flags with those of primarily Malta, Hong Kong and Germany, and of renaming and repainting the ships to disguise the identity of their original owners.
A report published by the New York Times entitled ‘Web of shell companies veils trade by Iran’s ships’, just before the UN Security Council had convened to decide on its first new wave of sanctions against Iran, had heavily implicated the use of the Maltese corporate structure in the scheme and sparked off a series of similar reports across Europe, the US and the rest of the world.
On 1 July, the European Union implemented a ban on the import of Iranian oil. Weeks earlier, the National Iranian Tanker Company, which insists it is now an independent company but which the West insists is still a government shell company, had begun pre-emptively reflagging its ships away from Malta and Cyprus, where they had previously sought refuge in a web of shell companies.
According to a recent NITC statement, “The change of flags of the fleet was a transparent and pre-emptive action to avoid breaching the new sanction law which was intended to be implemented in the concerned flag state [i.e. Malta and Cyprus].”
Iran, and NITC, have since been packing their bags and moving the fleet of oil tankers and container ships out of the Maltese shipping register where they once hid, to an even smaller island – the South Pacific island of Tuvalu, which lies 2,000 miles northeast of Australia, is apparently sinking, has a population of just over 10,000 and a gross domestic product of roughly €35 million.
In fact, no fewer than 75 Iranian-owned oil tankers and container ships, which the West insists are linked to the Iranian government and its nuclear development programme, have recently been moved to the maritime flags of Tuvalu, Tanzania, Sierra Leone, Bolivia and Moldova as sanctions against the rogue state increase. Transport Malta will undoubtedly see a considerable loss of income, but that is income that Malta could very well do without, considering the ripple effect on FDI that Malta’s link with Iran may have had in the end.
Iran, being a close ally of Syria – another state at the top of the rogue list – also recently used one company within the large web of shell companies it set up in Malta, as well as a Malta-flagged ship the company owns, to help the Syrian regime defy Western sanctions by shipping Syrian oil worth US$80 million to a state-run company in China.
Iran is one of Syria’s closest allies and has pledged to support the al-Assad regime. Recently, it even went as far as to have praised Syria’s handling of the year-long uprising in which at least 14,000 people – and counting – have been killed. China has also protected the Syrian regime from the imposition of sanctions, having controversially vetoed two resolutions at the United Nations against the bloodshed. China is not bound by Western sanctions against Syria, its oil sector or its state oil firm Sytrol.
But the European Union had sanctioned Syria’s state oil firm in September of last year and the fact that a Maltese-registered company and ship was carrying out the shipment was very dubious and reflected perhaps even worse on Malta than the sanctions-busting stories had.
Shortly after the incident, Malta had announced it had taken steps to deregister the ship and the company, and not a moment too soon.
The long and short of it is that Malta certainly does not need to be implicated in the aiding and abetting of the Iranian or the Syrian regimes. This is certainly not the kind of investment that this country needs, no matter what it could be worth to the state, or other coffers. Malta simply cannot risk, as it already has, being seen as complicit in Iran’s violations of EU and UN sanctions.
That Iran is packing its corporate camouflage bags is good news indeed, news that could not have come soon enough and the best that we can say of the development is: goodbye and good riddance.