French shipping giant moves to stop Iran smuggling

CMA CGM S.A. establishes an Iran Compliance Desk to prevent Tehran’s use of ships to smuggle weapons and nuclear technology.

By BENJAMIN WEINTHAL, JOHANNES C. BOCKENHEIMER
Ehud Barak and Benjamin Netanyahu examine missile (photo credit: Avi Ohayon/GPO/FLASH90)
Ehud Barak and Benjamin Netanyahu examine missile
(photo credit: Avi Ohayon/GPO/FLASH90)
BERLIN/DUSSELDORF – After publication of a joint investigative report in The Jerusalem Post and the German business daily Handelsblatt late last month, French shipping giant CMA CGM S.A. announced in early June the establishment of an Iran Compliance Desk to prevent Tehran’s use of ships it operates to smuggle weapons and nuclear technology.
At the firm’s world headquarters in Marseille, nerves are frayed: Faced with the threat of US sanctions, president Jacques Saadé is preparing stricter monitoring measures.
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Critics, including influential US Congressmen Mike Conaway (R-Texas) and Peter King (R-New York), have charged the company with closing its eyes to business with Iran and torpedoing international sanctions.
CMA CGM denies this. A spokesman told the Post that company policy was to “strictly adhere to all existing rules.”
On March 15, Israel Navy commandos intercepted the CMA CGM-chartered, German-owned Victoria cargo ship, containing more than 50 tons of Iranian weapons, about 320 km. off the the coast. Aboard were Chinese-made anti-ship missiles, 3,000 mortar shells, almost 70,000 rounds of ammunition for machine guns, and instruction manuals in Farsi. According to the government, the armaments were destined for Hamas and other terrorist groups in the Gaza Strip.
The affair cast a wide shadow: In response to Israeli pressure the UN set up an investigative commission and has approached the French company directly. Israel filed a complaint with the UN sanctions enforcement committee, asserting Iran violated UN Security Council sanctions barring it from transporting weapons.
Asked about the UN Security Council sanctions committee investigation of the Victoria and Iran’s violation of UN sanctions, a CMA CGM spokesman told the Post, “We have received in Marseille [France, headquarters of CMA CGM group] Mrs. Salomé Zourabichvili, coordinator on the panel of experts of the UN, and had a very positive exchange on the shipping industry and particularly on how the private sector should respond to terrorism issues.
We are about to receive the report of the investigation and will pay great attention to the recommendation made by the panel of experts.”
CMA CGM also operated ships involved in Iranian weapons smuggling in 2009 and 2010, prompting King, who chairs the US House of Representatives’ Homeland Security Committee, to send a strongly worded letter to Philippe Soulié, CEO of the shipping company, saying that he was “deeply concerned” about the French firm’s trade with the Islamic Republic.
Conaway wrote to the US Treasury and State departments in April that the “repeated failures” of the shipping company to adhere to international guidelines demanded an American response. He called for the Treasury to impose tough measures against CMA CGM.
For example, the company’s vessels should be banned from sailing to any Iranian port; otherwise the US would sanction CMA CGM.
Rising US pressure on the company has shaken up its management structure. In Marseille, company officials don’t seem to trust their own monitoring mechanisms and are cautiously promising improvements – probably also to appease the annoyed Americans. A spokesman said it has organized a compliance team exclusively to investigate trade with Iran.
In addition, information technology systems will be upgraded and investigations carried out of all firms used by the company for freight monitoring.
CMA CGM appears to see a US-based conspiracy against its shipping operation. A spokesman told the Post that anti-Iran lobby groups in the United States are targeting CMA CGM. The spokesman views the maritime company as a victim of such a campaign. A second spokesman told the Post that “black PR” is being used to damage the company in the US.
CMA CGM has a lot to lose – during the recent global economic crisis, business with the US and other markets suffered. The company finally had some positive news at the beginning of the year: It will add additional ships to the California-Asia route, in response to increasing demand.
In Norfolk, Virginia, where the CMA CMG has its main US office, the company is building a new headquarters building.
Last year, the company transported more than 9 million containers (twenty-foot equivalent) and generated roughly 10.1 billion euros in revenue. The French company is the thirdlargest shipping container company in the world. The company refused to tell the Post the volume of its Iran trade since 2005. “Shipping companies are not communicating figures like those ones,” it said.