US warns Chinese against using untraceable ships to hide Iran oil shipments

Sources say administration concerned China shipping companies are turning off tracking beacons on vessels to conceal sanction-busting crude cargoes

Stuart Winer is a breaking news editor at The Times of Israel.

Screen capture from video of the Chinese Very Large Crude Carrier tanker ship Yuan Shan Hu. (YouTube)
Screen capture from video of the Chinese Very Large Crude Carrier tanker ship Yuan Shan Hu. (YouTube)

The White House has been warning Chinese shipping companies not to have their vessels turn off tracking transponders to conceal their movements so they can ship oil from Iran, Reuters reported Wednesday.

US officials are concerned that Chinese ships are turning off their automatic identification systems, used by vessels to transmit their location, so that their movements to and from Iran remain hidden.

The Trump administration has been making clear to carriers that they face punishment if they are caught violating sanctions on Iranian oil, the report said, citing two senior administration officials who spoke on condition of anonymity.

“We’ve been messaging very heavily to the shipping companies, you don’t want to do this, it’s not worth it,” one of the officials said. “It’s incredibly dangerous and irresponsible behavior.”

The International Maritime Organization, the UN agency that regulates shipping, requires that AIS be usedת but crews can turn off the system to hide a ship’s movements.

“We are literally going ship by ship at this point because each ship is incredibly importantת” an official said.

US President Donald Trump arrives for an event in the Rose Garden of the White House, in Washington, October 15, 2019. (Evan Vucci/AP)

US President Donald Trump last year pulled out of a 2015 nuclear deal with Iran and reapplied strict sanctions, in particular on Iranian oil exports. Whereas Iran used to ship 2.5 million barrels a day, its exports are now down to just 400,000 barrels, with China left as the largest customer.

The US is determined to uphold the sanctions because, according to one of the officials, they are “on the verge of causing an economic depression in Iran,” the report said.

One company in particular, COSCO Shipping Tanker, has drawn attention after last month nearly a third of its fleet stopped transmitting locations via the automatic identification system. The blackout came after on September 25, the US put sanctions on five Chinese individuals and and two Chinese COSCO Shipping Corp subsidiaries, accusing them of shipping Iranian crude oil.

A few days later, 14 COSCO Shipping Tanker (Dalian) vessels stopped using their AIS from September 30 to October 7, according to Reuters.

On Tuesday, the White House said it had independently confirmed that COSCO ships had been turning off their AIS.

Since October 9, all but three of the ships have again showed up on tracking systems, but the Very Large Crude Carriers Yuan Shan Hu and Cosglad Lake, as well as another tanker, the Yang Mei Hu, have remained without trace.

COSCO Shipping Tanker (Dalian) denied in an email that its ships were turning off the AIS.

“Dalian Tanker will continue to adhere to applicable laws and regulations in the conduct of its business operations,” COSCO said.

Despite the crippling affect the sanctions have had on its economy, Iran has rebuffed Trump’s openness to hold direct negotiations, insisting instead that the US first remove the sanctions before it will come to the table.

This photo taken on Sunday, Oct. 13, 2019, and released by the official news agency of the Iranian Oil Ministry, SHANA, shows the scene of damage by two missiles that allegedly struck the Iranian oil tanker Sabiti, at the Red Sea. (SHANA via AP)

Analysts believe Iran could be trying to weather the sanctions in the hope that the 2020 US presidential elections will bring in a new administration and an easing of Trump’s “maximum pressure” policy.

“If they calculate that there is going to be (a new president) and they are incorrect, that’s bad,” one of the officials told Reuters. “Because I don’t think anybody thinks that they could make it another four years after next November under this kind of sanctions regime.”

Tensions have risen in the Persian Gulf region in the wake of the US pullout from the nuclear deal, with unclaimed attacks on ships and other vessels detained by Western powers or Iran.

Last week Iran said one of its tankers was attacked by Saudi Arabia, with two explosions ripping holes in the side. The incident came after a combined drone and cruise missile attack last month on two Saudi Arabian oil facilities which knocked out half of the kingdom’s oil production. Although Iran-backed Houthi rebels in Yemen claimed they carried out the attack, the US, Saudi Arabia, and Western allies accused Iran of being responsible.

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