THERE are several baffling questions surrounding the saga of Tinos I, the newbuild gas carrier that was sanctioned by the US yesterday after sitting off Houston for more than nine months without lifting a cargo.

On the one hand, this is a vessel that has none of the dark fleet hallmarks typically associated with sanctioned vessels. It is insured by an International Group P&I club, managed by a well-known third-party manager, classed by an IACS class society, and was chartered by a major trader.

On the other hand, a not-too-complex Google search for Pearl Petrochemical, one of the companies behind the network that controls this tanker, will show that Ofac had previously deemed this an Iranian entity, per French court filings. Dive a bit deeper, and further links to Iran should have been obvious to anyone who cared to look hard enough.

The most immediate question is what happens to the crew now that the ship is designated. Ofac typically issues a licence for sanctioned owners that allows them to continue paying wages and ensuring seafarers receive their provisions, so the crew shouldn’t bear any harsh consequences.

But what happens to the vessel next is less clear.

US advocacy group United Against Nuclear Iran has called for the vessel’s seizure. The US has in the past seized Iranian oil cargoes and sold them for the benefit of victims of terrorism, but it has never seized and sold a ship, which presents a different set of challenges. While the US government and now sanctioned owners of the vessel work this out the brand new, very expensive ship continues to sit there in political limbo.

For the rest of the industry, the designation of a newbuilding vessel raises a bigger set of questions regarding the evolution of what sanctions risk now looks like.

The saga of Tinos I suggests that it is no longer a case of looking at the elderly, anonymously owned and poorly maintained tankers that should be subject to extensive due diligence.

It is also now clear that the US is explicitly scrutinising not just Iran’s exports of crude oil, but its refined products and liquified petroleum gas.

As the recent advisory from the US Treasury made clear, the compliance landscape is not a static set of risks. It is evolving and as the sanctions expand, the circumvention and complexity increases.

A newbuild sanctions risk born out of years of illicit, but profitable trading is to some extent an inevitable evolution of the parallel fleet. But it is not the end state. Compliance risk for the shipping sector will continue to mutate as long as there are sanctions and willing participants seeking ways to circumvent them.

Tomer Raanan and Richard Meade
Senior maritime reporter and editor-in-chief, Lloyd’s List 

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