Flags of inconvenience: noose tightens around Iranian shipping

FILE PHOTO: Iranian oil tanker Grace 1 sits anchored after it was seized earlier this month by British Royal Marines off the coast of the British Mediterranean territory on suspicion of violating sanctions against Syria, in the Strait of Gibraltar, southern Spain July 20, 2019. REUTERS/Jon Nazca/File Photo

By Jonathan Saul, Parisa Hafezi and Marianna Parraga

LONDON/DUBAI/PANAMA CITY (Reuters) – Somewhere on its journey from the waters off Iran, around Africa’s southern tip and into the Mediterranean, the Grace 1 oil tanker lost the flag under which it sailed and ceased to be registered to Panama. Iran later claimed it as its own.

The ship carrying 2 million barrels of Iranian crude was seized by British Royal Marines off Gibraltar, raising tensions in the Gulf where Iran detained a UK-flagged ship in retaliation.

Grace 1 remains impounded, not because of its flag but because it was suspected of taking oil to Syria in breach of EU sanctions, an allegation that Iran denies.

Yet Panama’s move on May 29 to strike it from its register mid-voyage was part of a global squeeze on Iranian shipping.

Nations that register vessels under so-called “flags of convenience” allowing them to sail legally have de-listed dozens of tankers owned by Iran in recent months, tightening the economic noose around it.

In the biggest cull, Panama, the world’s most important flag state, removed 59 tankers linked to Iran and Syria earlier this year, a decision welcomed by the United States which wants to cut off Tehran’s vital oil exports.

Panama and some other key flag states are looking more closely at the thousands of ships on their registers to ensure they comply with U.S. sanctions that were re-imposed against Iran last year and tightened further since.

A Reuters analysis of shipping registry data shows that Panama has de-listed around 55 Iranian tankers since January, Togo has de-listed at least three and Sierra Leone one.

That represents the majority of its operational fleet of tankers, the lifeblood of the oil-dominated economy, although Iran may have re-registered some ships under new flag states.

When a vessel loses its flag, it typically loses insurance cover if it does not immediately find an alternative, and may be barred from calling at ports. Flags of convenience also provide a layer of cover for a vessel’s ultimate owner.

International registries charge fees to ship owners to use their flags and offer tax incentives to attract business.

Iran said it still had plenty of options.

“There are so many shipping companies that we can use. In spite of U.S. pressure, many friendly countries are happy to help us and have offered to help us regarding this issue,” said an Iranian shipping official, when asked about tankers being de-listed.

Some nations have expressed caution, however. The world’s third-biggest shipping registry, Liberia, said its database automatically identified vessels with Iranian ownership or other connections to the country.

“Thus, any potential request to register a vessel with Iranian connection triggers an alert and gets carefully vetted by the Registry’s compliance and management personnel,” the registry said.

Liberia said it was working closely with U.S. authorities to prevent what it called “malign activity” in maritime trade.


In many cases Iran has re-listed ships under its own flag, complicating efforts to move oil and other goods to and from the dwindling number of countries willing to do business with it.

Some shipping specialists said the Iranian flag was problematic because individuals working for the registry in Iran could be designated under U.S. sanctions, and so present a risk for anyone dealing with vessels listed by them.

“Most insurance companies or banks will not be able to deal with the Iranian flag as it is in effect dealing with the Iranian state,” said Mike Salthouse, deputy global director with ship insurer the North of England P&I.

Customs officials may also sit up and take notice.

“One of the problems with an Iranian-flagged ship is that there is a 50 percent chance that a customs officer will undertake a search, which means the cargo will be delayed,” said a U.N. sanctions investigator, who declined to be named. “These all add to the costs.”

A former U.S. diplomat said Washington was often in contact with Panama and other flag states to keep vessel registries “clean”.

“We are continuing to disrupt the Qods Force’s illicit shipments of oil, which benefit terrorist groups like Hezbollah as well as the Assad regime (in Syria),” said a spokesman at the U.S. State Department.

Qods Force refers to an elite unit of Iran’s Islamic Revolutionary Guards Corps that is in charge of the Guards’ overseas operations, and Hezbollah is an Iran-backed, heavily armed Shi’ite Muslim group that forms part of Lebanon’s coalition government.

“Nearly 80 tankers involved in sanctionable activity have been denied the flags they need to sail,” the spokesman added.


De-flagging Iranian ships is just one way the international community can squeeze Iran.

U.S. sanctions on oil exports aim to reduce Iran’s sales to zero. Iran has vowed to continue exporting.

In the first three weeks of June Iran exported around 300,000 barrels per day (bpd), a fraction of the 2.5 million bpd that Iran shipped before President Donald Trump’s exit in May last year from the 2015 nuclear deal with major powers.

Egypt could also complicate life for Tehran if it denies passage to tankers heading to the Mediterranean through the Suez Canal. The alternative route around Africa, taken by Grace 1 before its seizure, is far longer.

Refinitiv shipping data showed the Masal, an Iranian-flagged oil tanker, anchored in the Suez Canal’s waiting zone on July 6. It stayed there until July 12, when it began to sail south. It exited the Red Sea on July 17 and docked at Larak Island, Iran on July 23.

Two Egyptian intelligence sources told Reuters that the tanker was halted in the Red Sea in July by authorities “without anyone knowing the reason”.

A second senior Iranian government official involved in shipping declined to comment when asked about the Masal.

The Suez Canal Authority’s spokesman said Egypt did not bar vessels from crossing the canal except in times of war, in accordance with the Constantinople Convention. He declined to comment further.

Britain tightened the screw when it seized the Grace 1 supertanker on July 4, accusing it of violating sanctions against Syria.

Two Iranian-flagged ships have been stranded for weeks at Brazilian ports due to a lack of fuel, which state-run oil firm Petrobras refuses to sell them due to U.S. sanctions. Two more Iranian ships in Brazil could also be left without enough fuel to sail home.

A recent incident off Pakistan’s coast last month points to the lengths Iran has gone to in order to keep trading.

The Iranian cargo carrier Hayan left from the Iranian port of Bandar Abbas on June 3 and set sail for Karachi on Pakistan’s coast, according to ship tracking data from maritime risk analysts Windward.

On June 7, it changed its name to Mehri II and its flag to that of Samoa, the data showed, as it made its way toward Karachi port.

Six days later, the vessel conducted a ship-to-ship transfer of its unknown cargo further up Pakistan’s coast.

The ship then returned home, changing its flag back to Iran and its name back to Hayan.

Imran Ul Haq, spokesman for the Pakistan Maritime Security Agency, said they had no information when asked about the Iranian ship’s activity.

Iran has frequently used ship-to-ship transfers to move oil and oil products since U.S. sanctions were reimposed.

Shipping data also show that a separate Iranian-owned cargo ship, the Ya Haydar, has been sailing around the Gulf and reporting its flag as that of Samoa.

Samoa denies allowing Iran to register any ships under its flag.

“The said vessels Hayan or Ya Haydar are not, and have never been listed, nor registered on the Samoa’s registry of vessels,” said Anastacia Amoa-Stowers of the Maritime department at Samoa’s Ministry of Works, Transport & Infrastructure.

“Given there are currently no Iranian ships listed on Samoa’s registry, there is no action to de-list a vessel. Additionally, there has never been any Iranian ships listed on Samoa’s vessel registry – previously and at present.”

Amoa-Stowers said Samoa was a closed registry, meaning that any foreign vessel flying its flag was doing so illegally.

The second senior Iranian government official involved in shipping declined to comment when asked about the two vessels.

A spokeswoman with the International Maritime Organization said the UN’s shipping agency had received information from Samoa which has been circulated to member states.

(Additional reporting by Lesley Wroughton in Washington, Syed Raza Hassan in Karachi, Edward McAllister in Dakar, Alphonso Toweh in Monrovia, John Zodzi in Lome, Praveen Menon in Wellington, Yousef Saba and Sami Aboudi in Cairo; Editing by Mike Collett-White)

800 Venezuelans flee to Brazil daily to escape insecurity, hunger: UNHCR

Venezuelans line up to cross into Colombia at the border in Paraguachon, Colombia, Feb. 16, 2018. REUTERS/Jaime Saldarriaga/File Photo

GENEVA (Reuters) – More than 800 Venezuelans stream into northern Brazil each day, the United Nations said on Friday, citing Brazilian government statistics on people fleeing the worsening crisis in the economically crippled nation.

More than 52,000 Venezuelans have arrived in Brazil since the start of 2017, including an estimated 40,000 living in Boa Vista, capital of Roraima state, it said.

About 25,000 of the migrants are asylum seekers while 10,000 have obtained temporary resident visas and the rest are seeking to regularize their status, the U.N. High Commissioner for Refugees (UNHCR) said.

“We are stepping up our response in Brazil as the number of Venezuelan arrivals grows,” UNHCR spokesman William Spindler told a news briefing. “According to the government’s latest estimates, more than 800 Venezuelans are entering Brazil each day.”

Venezuelans have also fled to Colombia, Chile, Ecuador, Panama, Argentina and Peru, while others have sought refugee status in the United States, Spain, Mexico and Costa Rica, according to the UNHCR.

President Nicolas Maduro’s government in Caracas is faced with widespread discontent over hyperinflation and shortages of food and medicines during a fifth year of recession that he blames on Western hostility and the fall of oil prices.

Venezuelans report they are fleeing insecurity, violence and often a loss of income, Spindler said. Many are in desperate need of food, shelter and health care.

UNHCR is working with Brazilian authorities to register Venezuelans to ensure they have proper documentation that entitles them to work and access services, Spindler said.

Ten shelters have been opened in Boa Vista, each with 500 people, but some Venezuelans are living on the streets, he said.

Venezuelans willing to relocate from Roraima to other parts of Brazil are being flown to Sao Paulo and Cuiaba this week, as communities and services in Boa Vista are over-stretched, he said.

UNHCR’s $46 million appeal to help Venezuelans across the region is only 4 percent funded, Spindler said, and he called for more donations.

Within Venezuela, the economic crisis has limited people’s access to health services and medicines, World Health Organization spokesman Tarik Jasarevic said.

“WHO is working closely with the health authorities in order to fill those shortages. We are providing medicines for malaria and anti-retrovirals. We are equipping maternal hospitals with supplies that are needed for pregnant women and babies.”

Venezuela’s crisis has posed major challenges for governments in the region, who also worry that assistance to Venezuelans could increase the number of people leaving their country.

(Reporting by Stephanie Nebehay; Editing by Mark Heinrich)

No visas, bad jobs: Venezuelan emigrants reluctantly return home

No visas, bad jobs: Venezuelan emigrants reluctantly return home

By Andreina Aponte and Anggy Polanco

CARACAS/SAN CRISTOBAL, Venezuela (Reuters) – Early last year, Leandro Colmenares sold his car and his apartment and fled Venezuela’s profound economic crisis, joining a wave of emigration to other Latin American countries.

Colmenares, a medical equipment repairman, first set up in Panama with $7,000 in hand. When he could not get a visa and struggled to find work, he ended up with odd jobs like painting houses and doing electrical wiring for $25 a day.

“In Venezuela, I was rubbing shoulders with doctors. Months later I was mopping the floor in a Panama furniture shop,” said Colmenares, who has two sons, including one who is disabled.

He then tried his luck in Colombia, where he again took odd jobs, mostly cooking. He opened a small cafe with other Venezuelans but it failed.

“It was bad, I was going hungry. On weekends I ate once,” he said. And once again, he could not get a visa.

Crushed and having run out of money, Colmenares decided in February he had no choice but return to Venezuela empty-handed and by bus – one of an apparently growing number of Venezuelan emigrants forced to go home after failing to start a new life elsewhere in Latin America.

These recent migrants are often poor, hopping on buses to Latin American capitals with as little as a few hundred dollars and scant prospect of finding a decent job.

“The country I left was bad. When I came back it was worse,” said Colmenares, noting steep prices and ever less food on store shelves. He spends his days in his home in poor central Caracas, scraping out a living making dough for corn patties.

For decades after World War II, Venezuela’s flourishing oil economy made it a destination for mass immigration from southern Europe, with Portuguese bakeries and Spanish bars a common sight across Caracas.

But during 18 years of Socialist rule, an increase in crime, economic decay and political protests have prompted emigration to Miami, Madrid, and the rest of Latin America.

Sociologist Tomas Paez estimates over 2 million Venezuelans have left the country of 30 million, accelerating in the last two years as the OPEC member’s recession has worsened, leading to shortages of vital medicines and food, runaway inflation and lack of formal jobs.

While the early diaspora was mostly a middle-class phenomenon, recent migrants are more likely to be poor, heightening the chances that they will struggle.

There is no data on returnees but Reuters interviewed 10 Venezuelans who had emigrated after President Nicolas Maduro took office in 2013 only to return.


For Miguel Blanco, a Caracas-based sociologist, the degree of poverty among people now leaving the country has led to more of them returning.

“When migration is triggered by push factors, it can lead the migrant to fail because of lack of money,” said Blanco.

Pockets of Venezuelan economic migrants, once a relatively rare sight in South America, have sprung up in cities from Bogota to Santiago de Chile. They are often seen hawking traditional corn patties on the streets or offering door-to-door beauty treatments.

Panama’s head of migration said in August that some 2,000 Venezuelans were setting up there every week, compared with about 500 to 600 before August, when Maduro’s government created a legislative superbody that was widely condemned by the opposition and other countries as a power grab.

With about 60,000 Venezuelans already in Panama, the government has implemented visas as an entry requirement.

Peru has estimated that in the first half of 2017 some 40,000 Venezuelans entered the country.

Venezuelan government supporters have said the extent of emigration has been exaggerated. Maduro’s administration scoffs at those who leave as selfish and unpatriotic. The Information Ministry did not respond to a request for data.

Colombia, which shares a porous border of some 2,219 kilometers with Venezuela, has estimated that about 36,000 Venezuelans enter daily, and that some 2,000 do not immediately return to their country.

Gerson Lopez, a 30-year-old graphic designer, said he was paid less by a Colombian beauty product company because he did not have legal documents.

“Informal work there is very exploitative,” said Lopez. “Venezuelans are doing the work Colombians don’t want to do.”

Lopez was broke when he returned to Venezuela in late January after being unable to find good work in Bogota.

“You have to think very hard if you’re going to leave,” he said, adding bitterly, “(But) here you don’t have any opportunities. All you do is survive.”

(Additional reporting by Marco Aquino in Lima, Fabian Cambero in Santiago and Anthony Boadle in Brasilia; Writing by Alexandra Ulmer; Editing by Dan Flynn)

5.8 Earthquake Rocks Panama

The United States Geological Survey reported a magnitude 5.8 earthquake struck off the coast of Panama near the Costa Rican border.

The earthquake’s center was located in the Chiriqui province on the side of the country facing the Pacific Ocean.

Panama’s civil defense organization evacuated schools and a nearby hospital.

There have been no reports of injury or damage at this time.

North Korean Ship Caught In Panama With Hidden Weapons

A North Korean ship has been seized trying to pass through the Panama Canal containing a large cache of hidden weapons which may violate U.N. prohibitions against sending weapons to the unstable Asian nation.

Missiles reportedly “being sent for repair” from Cuba were found buried under large sacks of sugar. None of the weapons were listed on the ship’s manifest which is a violation of maritime law. Continue reading

Panama Drought Forces School Closings

panamacanalThe government of Panama has ordered the closing of all schools in an attempt to help the country in the midst of a major power crisis connected to a national drought.

Nearly 60% of Panama’s power is generated through hydroelectric plants .  The drought is causing significant problems for the plants as demand is far outpacing their ability to produce.  The government has declared a drought emergency for over 1/3 of the country. Continue reading