An Iranian shipping company under sanctions by the US has been using several of its containerships to deliver goods to the EU through the dangerous waters of the Red Sea.
Three containerships owned by Hafez Darya Arya Shipping Co (HDASCO), a subsidiary of the Iranian National Shipping Group (IRISL), have been seen calling several EU ports during the past two months.
The three boxships – the 2016-built Kashan, the 2012-built Daisy, and the 2010-built Shiba – have regularly provided container route services from the Middle East via the Red Sea and the Suez Canal to the Mediterranean and Northern Europe without danger of being attacked by the Houthis due to the vessels being Iranian flagged.
Data given to Splash by ship tracking and maritime analytics provider MarineTraffic shows the ships starting their journeys from Iran and most frequently calling ports in the United Arab Emirates, Syria, Lebanon, Cyprus, Libya, Turkey, Romania, Spain, Belgium, and the Netherlands.
Apart from the companies being Iranian, this would not be a big deal if shipping firms were not also under sanctions by the US. Under an executive order, the State Department sanctioned the Islamic Republic of Iran Shipping Lines in June 2020 and, by affiliation, Hafez Darya Arya Shipping was also placed on the sanctioned list.
This poses a problem for EU companies working with the two Iranian lines as the EU signed the Iran Nuclear Deal in 2015 to dismantle the Asian country’s nuclear program and provide sanctions relief for Iran. The US also signed the deal but withdrew from it when Donald Trump entered office.
The EU still has some sanctions in place in response to Iran’s human rights abuses and military support for Russia’s war of aggression against Ukraine but it only has 227 individuals and 42 entities under sanctions. The entities are mostly government-related or state-controlled such as ministries, news agencies, and mobile service providers.
This means that EU firms that cooperate with IRISL and HDASCO could end up on the US sanctions list as well. On one hand, they did not break any regulations on the EU side but did cooperate with companies sanctioned by the US which could result in prohibiting such companies from doing business with any US entity or seizing US assets.
For example, the US posed sanctions on the Hoopad Darya Shipping Agency Company and the China-based Jiangyin Mascot Special Steel as well as UAE-based Accenture Building Materials in 2021 for working with IRISL on steel transport.
Then there is the issue of the EU Blocking Act which makes it illegal for EU entities to comply with extraterritorial sanctions – even US ones. So there is no way for a company from the EU to both comply with the Blocking Act and the US sanctions simultaneously.
There is the advantage of lower costs of freight for EU companies if they use Iranian shipping companies as the Suez and the Red Sea are problem- and Houthi-free for them. However, it comes at the risk of US sanctions and the bad look of working with Iran which has been backing the Houthis.
