With aid in balance, Syrians who fled Assad fear deeper hardship

By Mahmoud Hassano

IDLIB PROVINCE, Syria (Reuters) – Having fled their homes to escape President Bashar al-Assad’s rule, many of Syrians sheltering in the rebel-held northwest fear their fate may once again be placed in his hands.

Russia, Assad’s key ally, wants U.N. aid to the region to come through the capital Damascus and not via Turkey, raising fears that food on which they rely will fall under their oppressor’s control.

A U.N. mandate to supply aid from Turkey, currently via the Bab al-Hawa crossing, expires on Saturday, and while Western members of the U.N. Security Council want to extend and expand it, veto powers Russia and China are wary of renewing it.

Russia skipped negotiations on the issue on Tuesday.

Hossam Kaheil, who fled to Idlib in 2018 when the rebellion in Ghouta, just outside Damascus, was defeated, does not trust Syrian authorities to let aid through if supply lines are changed.

“In Idlib the situation is good, but if they close the crossings, there will be a humanitarian catastrophe,” said the 36-year-old, who recalls being so hungry in 2014, as the Syrian army laid siege to Ghouta, that he had to eat animal feed.

He added that two of his siblings died due to medical shortages during the siege, described by U.N. investigators as the longest in modern history.

U.N. aid across the Turkish border has helped to keep millions of Syrians supplied with food, medicine and water in the last part of Syria still held by anti-Assad insurgents.

Syria says it is committed to facilitating the delivery of U.N. aid from within the country. The Syrian information ministry did not respond to emailed questions from Reuters for this article.

Russian President Vladimir Putin said last month that the Red Cross and Red Crescent should be allowed to observe if there were suspicions of any stealing, although he did not think that would happen.

RUSSIAN LEVERAGE

The tussle marks a diplomatic front in a war that has been in military stalemate for several years, with Moscow and Damascus seeking to reassert state sovereignty over a corner of Syria outside their control.

Since winning back the bulk of Syria with Russian and Iranian help, Assad has struggled to advance further: Turkish forces block his path in the northwest, and U.S. forces are on the ground in the Kurdish-controlled east, where oilfields, farmland and land routes to Iraq are located.

Government-held Syria, along with the rest of the country, is in economic crisis. Assad’s plans for reconstruction and economic revival, which came to little, faced new headwinds with the imposition of new U.S. sanctions last year.

“This is a moment of leverage for Russia – a wrangle over strategic advantage in which humanitarian issues are being used as the fulcrum,” said Joshua Landis, head of the Center for Middle East Studies at the University of Oklahoma.

“Unfortunately the Syrian people are the real losers in this battle between Russia and the United States.”

The United States wants the aid mandate renewed. So does Turkey, which exercises sway in the northwest through support to rebels, aid, and Turkish boots on the ground.

The United Nations has warned that failure to renew the aid operation would be devastating for millions of people.

“We don’t want to see these people becoming pawns in a political game,” said Mark Cutts, U.N. deputy regional humanitarian coordinator for the Syria crisis.

“It is really shameful that we are talking about reducing access at a time when we should be scaling up the operation.”

The number of people dependent on aid in the northwest has grown by 20% to 3.4 million in a year, the U.N. says.

MISTRUST

Russia cites U.S. sanctions as a reason for the humanitarian problems. Washington, whose sanctions aim to cut off funds for Assad’s government, rejects this.

Agreed in 2014 when Assad was in retreat, the U.N. mandate initially allowed deliveries from four locations. Russian and Chinese opposition whittled this down to one last year. Russia says the operation is outdated.

Delivering aid across frontlines has proven difficult if not impossible throughout the war.

“We’ve requested access for cross-line convoys multiple times … because we would like as much access as possible from all sides, but the war is not over,” Cutts said.

“In this kind of environment, it is very difficult to get agreement from the parties on both sides for convoys to move across that frontline.”

Insurgents in the northwest include groups proscribed as terrorists by the Security Council. U.N. oversight has prevented aid being diverted to armed groups, Cutts said, expressing concern that the loss of such oversight may deter donors.

Durmus Aydin, secretary-general of Turkey’s Humanitarian Relief Foundation (IHH), part of the aid operation, told Reuters that aid deliveries across frontlines did not seem possible at the moment.

“One of the reasons this isn’t a realistic solution is the mistrust in people towards the Syrian government and Russia.”

(Additional reporting by Tuvan Gumrukcu in Istanbul, Tom Perry in Beirut, Andrew Osborn in Moscow and Stephanie Nebehay in Geneva; Writing by Tom Perry; Editing by Mike Collett-White)

Judge under U.S. sanctions set to take over Iran presidency

By Parisa Hafezi

DUBAI (Reuters) – Millions of Iranians voted on Friday in a contest set to hand the presidency to a hardline judge who is subject to U.S. sanctions, though anger over economic hardship means many will heed calls for a boycott.

Senior officials appealed for a large turnout in an election widely seen as a referendum on their handling of the economy, including rising prices and unemployment and a collapse in the value of its currency.

“I urge everyone with any political view to vote,” judiciary head Ebrahim Raisi, the front-runner in the contest, said after casting his ballot.

“Our people’s grievances over shortcomings are real, but if it is the reason for not participating, then it is wrong.”

While state television showed long queues at polling stations in several cities, the semi-official Fars news agency reported 22 million or 37% of voters had cast ballots by 7:30 pm (1500 GMT), citing its own reporter. The interior ministry said it could not confirm turnout figures.

After voting in the capital Tehran, Supreme Leader Ayatollah Ali Khamenei urged Iranians follow suit, saying “each vote counts … come and vote and choose your president”.

Raisi, 60, is backed by security hawks in his bid to succeed Hassan Rouhani, a pragmatist prevented under the constitution from serving a third four-year term in the post, which runs the government day-to-day and reports to Khamenei.

Supported by the powerful Revolutionary Guards Corps, Raisi, a close Khamenei ally who vows to fight corruption, is under U.S. sanctions for alleged involvement in executions of political prisoners decades ago.

Voters reached by Reuters expressed mixed views.

Maryam, 52, a hairdresser in Karaj near Tehran, said she would not vote because “I have lost confidence in the system.”

“Every time I voted in the past, I had hope that my living standard would improve. But I lost hope when I saw the highest official in the country wasn’t brave enough to resign when he couldn’t make things better,” she said, referring to Rouhani.

Asked which candidate he preferred, Mohammad, 32, at a polling station in a hamlet in southern Iran, replied: “To be honest none of them, but our representative in parliament says we should vote for Raisi so that everything will improve.”

BOYCOTT

“My vote is a big NO to the Islamic Republic,” said Farzaneh, 58, from the central city of Yazd, referring to the country’s system of clerical rule. She said contrary to what state TV reported, “the polling stations are almost empty here”.

Mohammad, 40, an engineer, said he would not vote because “the results are known beforehand and more important, if Mr. Raisi was serious about tackling corruption he should have done so by now”.

While hundreds of Iranians, including relatives of dissidents killed since Iran’s 1979 Islamic revolution and political prisoners, have called for an election boycott, the establishment’s religiously devout core supporters are expected to vote for Raisi.

More than 59 million Iranians can vote. Polls close at 1930 GMT but can be extended for two hours. Results are expected around midday on Saturday.

A win for Raisi would confirm the political demise of pragmatist politicians like Rouhani, weakened by the U.S. decision to quit the nuclear deal and reimpose sanctions in a move that stifled rapprochement with the West.

The new sanctions slashed oil exports from 2.8 million barrels per day in 2018 to as low as an estimated 200,000 bpd in some months of 2020, although volumes have since crept up. Iran’s currency, the rial, has lost 70% in value since 2018.

With inflation and joblessness at about 39% and 11% respectively, the clerical leadership needs a high vote count to boost its legitimacy, damaged after a series of protests against poverty and political curbs since 2017.

Official opinion polls suggest turnout could be as low as 44%, well below 73.3% in 2017.

Khamenei, not the president, has the final say on Iran’s nuclear and foreign policies, so a Raisi win would not disrupt Iran’s bid to revive the 2015 nuclear agreement and break free of sanctions.

ECONOMIC MISERY

Raisi’s record as a hardline judge accused of abuses could worry Washington and liberal Iranians, analysts said, especially given President Joe Biden’s focus on human rights.

Raisi was appointed by Khamenei to the job of judiciary chief in 2019. A few months later, Washington sanctioned him for alleged abuses including what rights groups say was his role in the executions of political prisoners in 1980s and the suppression of unrest in 2009.

Iran has never acknowledged the mass executions, and Raisi has never publicly addressed allegations about his role.

Raisi’s main rival is the moderate former central bank governor Abdolnaser Hemmati, who says a win for any hardliner will mean more sanctions.

(Writing by Parisa Hafezi, Editing by William Maclean, Giles Elgood, Philippa Fletcher)

Soaring international prices aggravate Cuban food crisis

By Marc Frank

HAVANA (Reuters) – Soaring international food and shipping prices and low domestic production are further squeezing import-dependent Cuba’s ability to feed its people.

Cuba traditionally imports by sea around 70% of the food it consumes, but tough U.S. sanctions and the pandemic, which has gutted tourism, have cut deeply into foreign exchange earnings.

For more than a year Cubans have endured long waiting lines and steep price rises in their search for everything from milk, butter, chicken and beans to rice, pasta and cooking oil. They have scavenged for scant produce at the market and collected dwindling World War II-style food rations.

This month the Communist-run government announced flour availability would be cut by 30% through July.

Diorgys Hernandez, general director of the food processing ministry, said when he announced the wheat shortage that “the financial costs involved in wheat shipments to the country” were partly to blame.

That was bad news for consumers who had been buying more bread to make up for having less rice, pasta and root vegetables at the dinner table.

“People eat a lot of bread and there is concern there is going to be a shortage of bread because that is what people eat the most,” Havana pensioner and cancer survivor Clara Diaz Delgado said as she waited in a food line.

Cuba does not grow wheat due to its subtropical climate. The price of the commodity was $280 per tonne in April, compared with $220 a year earlier.

The government has also said the sugar harvest was short of the planned 1.2 million tonnes by more than 30%, coming in at less than a million tonnes for the first time in more than a century.

Cuba will have trouble making up for a shortage of domestically produced sugar as international prices are around 70% higher than a year ago.

COST OF SHIPPING

Adding to the pain, the cost of international container shipping is up as much as 50% over the last year and bulk freight more.

The U.N. Food and Agriculture Organization reported its international food price index was up 30.8% through April compared with the same month last year, and the highest since May 2014.

The Cuban state has a monopoly on foreign trade and purchases around 15% of the food it imports from the United States for cash under a 2000 exception to the trade embargo.

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, which follows the trade, said sales fell 36.6% last year to $163.4 million, compared with 2019. They recovered in the first quarter, reaching $69.6 million, though that represented less food due to higher prices.

Chicken, Cuba’s most important U.S. import, is badly affected. A U.S. businessman who sells chicken to Cuba said he shipped drumsticks at 24 cents a pound in January and 48 cents in April. He did not wish to be named.

“Resuming global demand, increased prices for product inputs and labor shortages suggest that commodity prices will not decrease soon,” Kavulich said.

The economy declined 11% last year and according to local economists contracted further during the first trimester of 2021 as a surge in the new coronavirus kept tourism shuttered and much of the country partially locked-down.

The government reported that foreign exchange earnings were just 55% of planned levels last year, while imports fell between 30% and 40%.

Incoming container traffic was down 20% through April, compared with last year, according to a source with access to the data, who requested anonymity.

The government has not published statistics for the notoriously inefficient and rustic agricultural sector since 2019 but scattered provincial and other reports on specific crops and livestock indicate substantial declines for rice, beans, pork, dairy and other Cuban fare.

This was confirmed by a local expert who requested anonymity and said output was down by double digits due to a lack of fuel and imported fertilizer and pesticides.

(Reporting by Marc Frank; additional reporting by Reuters TV and Nelson Acosta; editing by Estelle Shirbon)

Iran frees 157 detained during protests as more U.S. sanctions loom

DUBAI (Reuters) – Iran has freed 157 people arrested during anti-government demonstrations, the country’s judiciary said on Tuesday, as the United States appeared poised to impose sanctions on Iranians involved in a violent crackdown on the protesters.

Three sources familiar with the matter told Reuters on Monday the United States was expected to launch the sanctions as early as next week, coinciding with the one-year anniversary of what may have been the bloodiest repression of protesters in Iran since the 1979 Islamic Revolution.

Iranian judiciary spokesman Gholamhossein Esmaili said the 157 “security detainees” were among 2,301 people freed under a pardon by Supreme Leader Ayatollah Ali Khamenei as part of events marking the anniversary of the birth of the Prophet Mohammad, state media reported.

The 157 detainees had been convicted of “propaganda against the system, (illegal) assembly and collusion, and taking part in riots” after being arrested in anti-government protests in recent years, the judiciary spokesman said.

Human rights groups estimate that thousands were arrested in the 2019 protests, which broke out over gasoline price hikes and quickly turned political, with protesters demanding that top officials step down.

Meanwhile, government spokesman Ali Rabiei said Iranians would stand firm against any sanctions by U.S. President Donald Trump and expressed hope President-elect Joe Biden would change U.S. foreign policy.

“We closely follow the future U.S. administration’s activities and know that Mr. Biden has promised the American people that he will restore multilateralism and legitimacy,” state media quoted Rabiei as saying.

The sources said the new U.S. sanctions had been in the works for months and were the latest in a long series of penalties imposed on Tehran by Trump after he pulled Washington out of Iran’s 2015 nuclear deal with world powers in 2018.

(Reporting by Dubai newsroom; Editing by Gareth Jones and Mark Heinrich)

Iran’s Rouhani: Talks possible if U.S. returns to 2015 nuclear deal

By Parisa Hafezi

DUBAI (Reuters) – If the United States wants an agreement with Iran, it must first come back to Tehran’s 2015 nuclear deal with six powers that Washington abandoned two years ago, Iranian President Hassan Rouhani said on Tuesday.

“Washington’s maximum pressure policy on Iran has failed 100%…If Washington wants an agreement with us, then they should apologize for exiting the deal and return to it,” Rouhani told a televised news conference.

Long-tense relations between the two adversaries have almost come to blows since 2018 when U.S. President Donald Trump ditched the deal reached by his predecessor Barack Obama and reimposed sanctions that have crippled the Iranian economy.

In response to what Washington calls its “maximum pressure” campaign to force Iran to negotiate a new deal, Tehran has breached key limits on nuclear activity imposed by the 2015 accord, under which the Islamic Republic accepted curbs on its uranium enrichment program in return for relief from sanctions.

Trump has pledged to strike a new deal – under which he would seek stricter limits on enrichment, an end to Tehran’s ballistic missile program and involvement in various Middle East conflicts – within weeks if he wins re-election in November.

“Trump has been talking a lot … The next president, whether it is Trump or someone else, must adopt a different approach towards Iran,” Rouhani said.

In response to U.S. sanctions, Tehran has breached key limits on nuclear activity imposed by the 2015 accord.

Last week the United States moved to reinstate global U.N. sanctions on Iran, including an arms embargo, arguing Tehran was in violation of the 2015 nuclear deal even though Washington itself abandoned that agreement two years ago.

Council members France, Britain and Germany (E3), which along with Russia and China remain in the accord, have dismissed the move as void given Washington’s departure from the deal and said it was harming efforts to restrain Iran’s nuclear activity.

But France’s foreign minister, echoing the stance of Britain and Germany, told his Iranian counterpart that Paris was worried about the impact of the arms embargo expiring in October.

“The minister reiterated our concern about Iran’s destabilizing activities and the consequences of the expiration of the…embargo on conventional arms, and told him of the E3’s determination to seek solutions preserving security and regional stability,” ministry deputy spokesman Francois Delmas said.

Prime Minister Benjamin Netanyahu of Israel, Iran’s arch-enemy in the Middle East, urged Britain to join the U.S. bid to reimpose U.N. sanctions during a visit by British Foreign Secretary Dominic Raab to Jerusalem.

“Look at Iran’s aggression today, without a nuclear weapon. What a huge danger Iran would be to the entire world if it did get a nuclear weapon,” Netanyahu told Raab, according to a statement released by the premier’s office.

Iran has repeatedly denied seeking nuclear weapons.

(Reporting by Parisa Hafezi in Dubai, John Irish in Paris and Jeffrey Heller in Jerusalem; Writing by Parisa Hafezi; Editing by Mark Heinrich)

North Korea abandons nuclear freeze pledge, blames ‘brutal’ U.S. sanctions

By Stephanie Nebehay

GENEVA (Reuters) – North Korea said on Tuesday it was no longer bound by commitments to halt nuclear and missile testing, blaming the United States’ failure to meet a year-end deadline for nuclear talks and “brutal and inhumane” U.S. sanctions.

North Korean leader Kim Jong Un set an end-December deadline for denuclearization talks with the United States and White House national security adviser Robert O’Brien said at the time the United States had opened channels of communication.

O’Brien said then he hoped Kim would follow through on denuclearization commitments he made at summits with U.S. President Donald Trump.

Ju Yong Chol, a counselor at North Korea’s mission to the U.N. in Geneva, said that over the past two years, his country had halted nuclear tests and test firing of inter-continental ballistic missiles “in order to build confidence with the United States”.

But the United States had responded by conducting dozens of joint military exercises with South Korea on the divided peninsula and by imposing sanctions, he said.

“As it became clear now that the U.S. remains unchanged in its ambition to block the development of the DPRK and stifle its political system, we found no reason to be unilaterally bound any longer by the commitment that the other party fails to honor,” Ju told the U.N.-backed Conference on Disarmament.

Speaking as the envoy from the Democratic People’s Republic of Korea (DPRK), North Korea’s official name, Ju accused the United States of applying “the most brutal and inhumane sanctions”.

“If the U.S. persists in such hostile policy toward the DPRK there will never be the denuclearization of the Korean peninsula,” he said.

“If the United States tries to enforce unilateral demands and persists in imposing sanctions, North Korea may be compelled to seek a new path.”

U.S. military commanders said any new path could include the testing of a long-range missile, which North Korea has suspended since 2017, along with nuclear warhead tests.

“DO THE RIGHT THING”

U.S. disarmament ambassador Robert Wood voiced concern at Pyongyang’s remarks and said Washington hoped the North would return to the negotiating table.

“What we hope is that they will do the right thing and come back to the table and try to work out an arrangement where by we can fulfill that pledge that was made by President Trump and Chairman Kim to denuclearize,” he said.

South Korean Ambassador Jang-keun Lee said there must be substantial progress in denuclearization to “maintain and build upon the hard-won momentum for dialogue”.

“Therefore, early resumption of negotiations between the United States and the DPRK is critical,” he said.

Vesna Batistic Kos, permanent representative of Croatia to the U.N. Office at Geneva speaking on behalf of the European Union, also called on North Korea to stick to the talks.

Pyongyang, slapped with multiple Security Council resolutions and sanctions, has rejected unilateral disarmament and given no indication that it is willing to go beyond statements of broad support for the concept of universal denuclearization.

North Korea has said in previous, failed talks that it could consider giving up its arsenal if the United States provided security guarantees by removing its troops from South Korea and withdrew its so-called nuclear umbrella of deterrence from South Korea and Japan.

Impoverished North Korea and the rich, democratic South are technically still at war because their 1950-53 conflict ended in a truce, not a peace treaty.

The North regularly used to threaten to destroy the South’s main ally, the United States, before rapprochement began after the 2018 Winter Olympics in South Korea.

(Reporting by Stephanie Nebehay; Editing by Jon Boyle and Nick Macfie)

‘No invasion since 1914’ – Mexico bristles at U.S. terror designation plan

MEXICO CITY (Reuters) – President Andres Manuel Lopez Obrador said on Friday Mexico had not been invaded for more than a century and he would not permit another foreign intervention, reflecting tensions over a Trump administration plan to designate drug cartels based in Mexico as terrorist groups.

Designating groups as foreign terrorist organizations is aimed at disrupting their finances through the imposition of U.S. sanctions. While it does not directly give authority for overseas military operations, many Mexicans are nervous that it would lead to unilateral U.S. action against gangs.

“Since 1914 there hasn’t been a foreign intervention in Mexico and we cannot permit that,” Lopez Obrador said at a regular news conference, referring to the U.S. occupation of the port of Veracruz 105 years ago.

“Armed foreigners cannot intervene in our territory,” he said, instead offering more cooperation with the United States on fighting drug gangs, which have shown their power with a series of battles with security forces and civilians in recent months.

U.S. Attorney General William Barr will visit Mexico next week to discuss further security cooperation, Mexico’s foreign minister said earlier. The U.S. embassy in Mexico did not immediately respond to a request for comment.

Lopez Obrador was responding to comments by U.S. President Donald Trump this week that he was working to designate Mexican cartels as terrorist groups.

The planned Barr visit will be the highest level meeting since a gangland massacre of a U.S.-Mexican family triggered Trump’s terrorist comments.

“What we need to address organized crime is more mutual cooperation, not elements that will put distance between us or create hostilities,” said Ebrard.

(Reporting by Anthony Esposito, Miguel Angel Gutierrez and Abraham Gonzalez; Editing by Chizu Nomiyama and Bill Berkrot)

Russia says ‘unacceptable’ Turkish incursion into Syria must be temporary

FILE PHOTO: Russia's special envoy on Syria Alexander Lavrentiev attends a meeting during consultations on Syria at the European headquarters of the United Nations in Geneva, Switzerland September 11, 2018. Salvatore Di Nolfi/Pool via REUTERS

By Olesya Astakhova and Andrew Osborn

ABU DHABI/MOSCOW (Reuters) – Russia called Turkey’s military incursion into northeast Syria “unacceptable” and said on Tuesday the operation had to be limited in time and scale, a rare broadside that suggests Moscow’s patience with Ankara is wearing thin.

In Russia’s strongest criticism since Turkey launched its military operation last week, President Vladimir Putin’s envoy for Syria indicated Moscow wanted Ankara to wrap up its offensive soon.

“We didn’t agree with the Turks any questions about their presence in Syria and we don’t approve of their actions,” envoy Alexander Lavrentiev told reporters in Abu Dhabi during an official visit there by Putin.

He said Turkish troops had the right under an agreement struck between Damascus and Ankara in 1998, the Adana pact, to temporarily push up to a maximum of 10 km (six miles) into Syria to conduct counter-terrorism operations.

“But it doesn’t give them (Turkish troops) the right to remain on Syrian territory permanently and we are opposed to Turkish troops staying on Syrian territory permanently,” he said.

Lavrentiev made his comments as Turkey pressed ahead with its offensive in northern Syria despite U.S. sanctions and growing calls for it to stop, while Syria’s Russia-backed army moved on the key city of Manbij that was abandoned by U.S. forces.

Lavrentiev earlier on Tuesday told Russian news agencies that Moscow had always considered any kind of Turkish military operation on Syrian territory unacceptable.

His comments, which suggest growing tensions between Turkey and Russia, came a day after the Kremlin complained that Turkey’s incursion was “not exactly” compatible with Syrian territorial integrity.

“The security of the Turkish-Syrian border must be ensured by the deployment of Syrian government troops along its entire length,” said Lavrentiev. “That’s why we never spoke in favor or supported the idea of Turkish units (being deployed there) let alone the armed Syrian opposition.”

Lavrentiev said Turkey’s actions risked upsetting delicate religious sensitivities in northern Syria.

In particular, he said the area was populated by Kurds, Arabs and Sunnis who would not take kindly to their lands being resettled by people who had never lived there, a reference to Turkey’s plan to house refugees from other parts of Syria there.

Lavrentiev confirmed that Russia had brokered an agreement between the Syrian government and Kurdish forces that saw the Kurds cede control of territory to Syrian troops.

Those talks had taken place at Russia’s Hmeimim air base in Syria among other places, he said.

Russia’s influence in Syria and the Middle East is widely seen to have been boosted in the last week thanks to Washington scaling back its Syria operation and the Syrian Kurds striking a deal with President Bashar al-Assad, Moscow’s closest ally in the region.

Lavrentiev said Moscow was hoping that the United States would withdraw all of its forces from Syria. Russian Defense Minister Sergei Shoigu spoke to his U.S. counterpart about Syria on Tuesday evening.

Russian military police are patrolling the line of contact between Syrian and Turkish government troops.

Lavrentiev estimated there were around 12,000 Islamic State prisoners being held in northeast Syria.

(Additional reporting by Maria Tsvetkova, Maxim Rodionov and Tom Balmforth; Writing by Andrew Osborn; Editing by Alistair Bell)

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.

IRANIAN FLAG

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.

FALSE FLAGS

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)

Trump accuses Iran of secret nuclear enrichment, says sanctions to be cranked up ‘substantially’

FILE PHOTO - A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives of the U.S., Iran, China, Russia, Britain, Germany, France and the European Union during the Iran nuclear talks at the Vienna International Center in Vienna, Austria July 14, 2015. REUTERS/Carlos Barria/File Photo

By Doina Chiacu and Francois Murphy

WASHINGTON/VIENNA (Reuters) – President Donald Trump accused Iran on Wednesday of secretly enriching uranium for a long time and said U.S. sanctions would be increased “substantially” soon, as the U.N. nuclear watchdog held an emergency meeting on Tehran’s breach of a nuclear deal.

Washington used the session of the International Atomic Energy Agency’s 35-nation Board of Governors to accuse Iran of extortion after it inched past the deal’s limit on enrichment levels, while still offering to hold talks with Tehran.

Iran says it is reacting to harsh U.S. economic sanctions imposed on Tehran since Trump pulled out of world powers’ 2015 nuclear accord with the Islamic Republic last year, and says all its steps were reversible if Washington returned to the deal.

“Iran has long been secretly ‘enriching,’ in total violation of the terrible 150 Billion Dollar deal made by John Kerry and the Obama Administration,” Trump said on Twitter.

“Remember, that deal was to expire in a short number of years. Sanctions will soon be increased, substantially!”

While Iran was found to have had covert enrichment sites long before the nuclear accord, the deal also imposed the most intrusive nuclear supervision on Iran of any country, and there has been no serious suggestion Iran is secretly enriching now.

The deal confines enrichment in Iran to its Natanz site, which was itself exposed in 2003. Any clandestine enrichment elsewhere would be a grave breach of the deal. It was not immediately clear from Trump’s comments whether he was referring to previous, long-known activities or making a new allegation.

The U.S. statement, made just hours before Trump’s tweet, made no mention of either secret enrichment or an imminent tightening of sanctions.

Iran’s IAEA ambassador said in a German newspaper interview published on Wednesday that Tehran intended to preserve the nuclear deal with major powers if all other signatories honored their commitments under it.

“Everything can be reversed within a single hour – if all of our partners in the treaty would just fulfill their obligations in the same way,” Gharib Abadi was quoted by the weekly Die Zeit as saying.

In the past two weeks Iran has breached two limits pivotal to the 2015 deal, which aimed to extended the time Iran would need to obtain enough fissile material for a nuclear weapon, if it chose to do so, to a year from around 2-3 months.

President Hassan Rouhani said on Wednesday the Islamic Republic’s moves were permissible under the deal, rebuffing a warning by European powers to continue compliance.

The Trump administration says it is open to negotiations with Iran on a more far-reaching agreement on nuclear and security issues. But Iran says it must first be able to export as much oil as it did before the U.S. withdrawal.

Tensions between Washington and Tehran have risen sharply, culminating in a plan for U.S. airstrikes on Iran last month that were called off at the last minute.

“There is no credible reason for Iran to expand its nuclear program, and there is no way to read this as anything other than a crude and transparent attempt to extort payments from the international community,” said a Trump administration statement issued at the closed-door session of the IAEA board in Vienna.

“We call on Iran to reverse its recent nuclear steps and cease any plans for further advancements in the future. The United States has made clear that we are open to negotiation without preconditions, and that we are offering Iran the possibility of a full normalization of relations.”

Iran says it will continue to breach the deal’s caps one by one until it receives the economic windfall – trade and investment deals with the wider world – promised under terms of the agreement.

IRAN RAISING ENRICHMENT LEVEL

In a separate closed-door meeting with member states on Wednesday, IAEA inspectors confirmed that Iran was now enriching uranium to 4.5% purity, above the 3.67% limit set by its deal. This would be Iran’s second breach of the deal in as many weeks, diplomats familiar with the figures said.

However, that is still far below the 20% to which Iran refined uranium before the deal, and the roughly 90% needed to yield bomb-grade nuclear fuel.

“The latest steps indicate that Tehran’s leadership has made a decision to move onto the offensive to create leverage vis-a-vis the international community and bring about a solution to its constraints,” a Western intelligence source told Reuters.

Washington is set on isolating Iran to force it to negotiate stricter limits on its nuclear program and, for the first time, to address calls to curb its ballistic missile program and its role around the conflict-ridden Middle East.

EUROPEAN POWERS IN DILEMMA

Diplomats from several countries on the IAEA board said that while fiery exchanges between the Iranian and U.S. envoys were likely at the meeting at agency headquarters, they did not expect the board to take any concrete action.

While Iran has breached the terms of the deal which the IAEA is policing, the IAEA is not a party to the deal and Iran has not violated the Safeguards Agreement binding it to the agency.

Britain, France and Germany are considering their next move, torn between the urge to show their displeasure at Iran’s breach of the deal and wanting to keep alive a pact that signatories in 2015 touted as vital to preventing wider war in the Middle East.

(Additional reporting by Parisa Hafezi in Dubai and Tassilo Hummel in Berlin; Editing by Mark Heinrich)