US to impose sanctions on Iran shipping group involved in missile program

The sanctions will impact the Islamic Republic of Iran Shipping Lines (IRISL) and it's China-based subsidiary, E-Sail Shipping, and Mahan Air.

German-owned cargo vessel "Smaragd" seen carrying an Islamic Republic of Iran Shipping Lines (IRISL Group) container, 2012 (photo credit: DARRIN ZAMMIT LUPI/REUTERS)
German-owned cargo vessel "Smaragd" seen carrying an Islamic Republic of Iran Shipping Lines (IRISL Group) container, 2012
The United States is imposing new sanctions on Iran's largest shipping company and airline for helping the Islamic Republic develop ballistic missiles, announced Secretary of State Mike Pompeo at a State Department briefing on Wednesday.
The sanctions will impact the Islamic Republic of Iran Shipping Lines (IRISL) and it's China-based subsidiary, E-Sail Shipping, and Mahan Air. These companies helped Iran with its weapons of mass destruction (WMD) programs. "These programs involved the siphoning of funds away from the oppressed Iranian people and they augment the regime's campaign of terror and intimidation at home and around the world," said Pompeo.
An Iranian shipping network that helps smuggle weapons into Yemen is also being put under sanctions, according to Pompeo.
IRISL, E-Sail Shipping and Mahan Air are already subject to other punitive actions by the US. The sanctions are being imposed under an executive order aimed at stopping the development and proliferation of weapons of mass destruction with the hopes that the sanctions will increase pressure on other countries to cut business with Iran.
IRISL was previously subject to a WMD designation which was lifted under the JCPOA nuclear deal in January 2016. Pompeo called the lifting of the WMD designation an "enormous mistake," adding that the company has knowingly contributed to the proliferation of WMDs.
"The administration took a historic number of new actions this week to stand up for oppressed people all around the world and to take action against their oppressors," said Pompeo. The US designated an additional 68 individuals and entities in nine countries for corruption and human rights offenses since Monday, according to Pompeo.
"As long its malign campaign continues so will our maximum pressure," said Pompeo in reference to the new sanctions against Iran.
"Today's designations put the world on notice: those who engage in elicit transactions with these companies will risk exposure to sanctions themselves," said Pompeo.
The sanctions will have a "very significant" impact because of the global concern about Iran and weapons of mass destruction, said Chistopher Ford, the top state department official for international security and non-proliferation, to the Financial Times.
"Our ability to work with international partners overseas to deny Iranian shippers access to particular ports, or prevent transactions, is much more diplomatically persuasive when we are able to identify weapons of mass destruction or missile-related proliferation as the gravamen of the complaint," said Ford.
The US claims that IRISL falsified documents and used deceptive measures to cover up the shipment of ballistic missile related items for Iran's Aerospace Industries Organization and Shahid Hemmat Industries Group, which runs Iran's liquid-fuelled ballistic missile program. The US believes that E-Sail has also been helping the AIO and SHIG.
In September, the US imposed sanctions against a vast shipping network that “is directed by and financially supports the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF) and its terrorist proxy Hezbollah,” according to a Treasury Department statement. The shipping network transported hundreds of millions of dollars of oil "for the benefit of the brutal Assad regime, Hezbollah and other illicit actors," according to the statement.
“China is the supplier of choice for many of the world’s proliferators, especially when it comes to missile technology. E-Sail is one of the conduits,” said Ford. “This is a message to other parties around the world not to engage with these folks, and is also to some degree a message to the Chinese that not acceptable.”
The sanctions on IRISL and E-Sail will take effect after a 180-day window to make sure that customers with contracts to ship humanitarian goods aren't affected. The sanctions on Mahan Air will take effect immediately. Mahan was previously sanctioned for helping the Iranian Revolutionary Guard Corps and the US now says it has evidence that shows Mahan has helped transport missile-related graphite and high-grade carbon fiber in violation of UN sanctions.
Mahan is regarded as the safest airline in Iran, according to the Financial Times, leaving some Iranians with worries about other airlines with aging fleets that haven't been able to conduct sufficient maintenance due to US sanctions. Mahan has avoided US sanctions by buying second-hand planes and spare parts from other countries.
The airline is banned in Germany and France and Italy will ban the airline starting in mid-December. Mahan still flies to Spain, the United Arab Emirates, Turkey, Russia, China, India, Thailand and Malaysia.
Germany banned the airline because "it cannot be ruled out that this airline could also transport cargo to Germany that threatens our security. This is based on knowledge of past terrorist activities by Iran in Europe," said German government spokesman Steffen Seibert in January.
"Mahan Air has flown terrorists, weapons, equipment, and funds to international locations to support Iranian terrorist proxy groups," said the US ambassador in Berlin, Richard Grenell, in January, pointing to Iran's use of the airline to support Syrian President Bashar al-Assad.
Reuters and Omri Nahmias contributed to this report.