US Treasury fines French shipping firm and bank

In March Israel’s Navy seized CMA CGM ship 'MV Victoria', more than 50 tons of weapons from Iran were aboard.

By BENJAMIN WEINTHAL, JOHANNES C. BOCKENHEIMER
UN Human Rights Council_311 (photo credit: Reuters)
UN Human Rights Council_311
(photo credit: Reuters)
BERLIN/DUSSELDORF – Congressman Peter King (R-New York) called on CMA CGM, the world’s third largest shipping company, to end its business relations with the Islamic Republic of Iran, citing the US Treasury’s decision on Tuesday to sanction the French shipping giant for violating Iran sanctions, in an exclusive statement to The Jerusalem Post.
King, an influential congressional representative and head of the Homeland Security Committee in Congress, told the Post: “I have already called on CMA CGM twice to immediately comply with US, EU, and UN sanctions and to renounce its business relationship with Iran. I applaud the Treasury Department for enforcing penalties against CMA CGM, whose alleged violations of sanctions on Cuba, Sudan, and Iran go back several years. This news confirms that CMA CGM has a troubling pattern of skirting regulations and I strongly urge them to immediately comply and abide by international sanctions.”
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The US Treasury sanctions dealt another blow to CMA CGM’s shipping reputation because of the company’s strong economic ties with Iran’s maritime industry. In December, King wrote to Philippe Soulié, CEO of the shipping company, noting that he is “deeply concerned” about CMA CGM trade relations with Iran.
The company’s MV Everest container ship was seized off the Nigerian coast last year, fully loaded with Iranian weapons. King put the company on notice that its monitoring mechanisms are inadequate.
CMA-CGM appeared to ignore King’s warning.
Israel’s Navy seized in March the CMA CGM-operated container ship MV Victoria in the Mediterranean. A cache of more than 50 tons of weapons from Iran were aboard, including anti-ship missiles, 3,000 mortar shells and almost 70,000 rounds of ammunition for machine guns.
Though Tuesday’s sanctions did not target CMA CGM for the 2009-2010 transports of Iranian weapons, the United States Treasury Department fined the French shipping company in the amount of $374,400 to settle allegations of violations of regulations blocking trade with Cuba, Sudan and Iran between the period December 2004 and April 2008.
According to the Treasury, CCA, a subsidiary of the CMA CGM, “facilitated the exportation of goods from foreign ports to Sudan on at least two occasions and, in 28 separate transactions, accepted payments for shipping services provided by its foreign parent company, CMA CGM, or its foreign affiliates, in connection with shipments between third countries and Cuba, Iran or Sudan.”
In an e-mail to the Post on Thursday, the office of Mike Conaway (R-Texas) wrote, “Congressman Conaway is encouraged by the Treasury Department’s actions and will remain engaged on the issue moving forward.”
The prominent US Congressman from Texas had issued a strongly worded April letter to the US Treasury and State Departments that CMA CGM’s “repeated failures” to enforce international guidelines to stop weapons smuggling warranted an American response.
He called for the Treasury to ban CMA CGM from conducting maritime trade with Iran if the company did not crackdown on its porous control system.
A joint May Handelsblatt (Germany’s business daily) and Post investigative report first disclosed the King and Conaway letters complaining about CMA CGM failure to clamp down on illicit Iranian shipments aboard its company-operated vessels.
In response to the Post/Handelsblatt articles, CMA CGM implemented an Iran compliance desk to monitor goods from the Islamic Republic.
The new Treasury financial penalties note that “CCA did not voluntarily self-disclose the matter to OFAC and that the alleged violations constituted a non-egregious case,” adding, “CCA and CMA CGM have undertaken remediation to ensure that such alleged violations do not recur.”
When asked about King’s call for CMA CGM to pull the plug on its Iran business transactions and the company’s assessment of the financial penalties, Heather M. Spring, CMA CGM’s vice president and general counsel in the US-branch in Norfolk, wrote the Post on Thursday: “As you may be aware, the settlement has nothing to do with the CMA GGM Group’s lawful activities in Iran. Nor did the settlement relate to weapons trade or the transportation of any other type of unlawful cargo.
“To the contrary, most of the shipments involved food and medicine, lawfully shipped between non-US destinations.”
She continued: “As a French company CMA CGM is permitted to do business with Iran, Cuba and Sudan, subject to UN and EU sanctions.
We here at CMA CGM [America], however, can have no involvement, however small, in our parent company’s trade with those nations. We take that responsibility very seriously.”
Though Spring declined to comment specifically on King’s call for CMA CGM to end its business with Iran, she wrote, “We have previously been in touch with Mr. King’s office and have been completely forthright with him about these issues and our enhanced compliance efforts.”
CMA CGM operates its US operation in Norfolk, Virginia. Spring did not comment on whether the sanctions and the company’s continued trade with Iran will adversely impact its American customer base.
The US says that Iran is developing a nuclear-weapons program and finances terror groups, including Al-Qaida and Hezbollah.
In a separate set of sanctions, the US Treasury Department fined the French bank Société Générale $111,359 to settle alleged violations of Iran sanctions. According to the Treasury settlement, the Société Générale issued “letters of credit between two nonsanctioned parties, processed two payments under those letters of credit involving the shipment of cargo transported aboard vessels owned and/or managed by the Islamic Republic of Iran Shipping Lines of Tehran, Iran, an Iranian entity.”