HK rejects US warning on ship violating Iran sanctions

May 30, 2019 16:56
The Hong Kong administration said the UN Security Council has not imposed any restrictions on the export of petroleum from Iran. Photo: Bloomberg

Hong Kong has dismissed US warnings that it could face sanctions if it allowed a vessel carrying petroleum produced in Iran to stop at its port and provided services.

The Commerce and Economic Development Bureau (CEDB) said the Hong Kong SAR government has been strictly implementing sanctions decided by the UN Security Council on Iran after the United Nations Sanctions (Joint Comprehensive Plan of Action –Iran) Regulation was enacted.

But the CEDB said the council has not imposed any restrictions on the export of petroleum from Iran, the Hong Kong Economic Journal reports.

While certain countries may impose unilateral sanctions against certain places based on their own considerations, those sanctions are not within the scope of the UN Security Council sanctions implemented by the HKSAR, the bureau said, apparently referring to the United States.

Washington earlier warned Hong Kong to be on alert for a vessel carrying Iranian petroleum that may seek to stop in the city, adding that any entity providing services to the vessel will be violating US sanctions, Reuters reported.

The warning came as Washington stepped up moves to choke off Iran’s oil exports by scrapping waivers it had granted to big buyers of Iranian crude oil, including China.

The fully laden Pacific Bravo abruptly changed course on Monday to head toward Sri Lanka, the news agency said, citing shipping data from Refinitiv Eikon.

The vessel had earlier identified Indonesia as its intended destination, according to ship-tracking data, but industry sources said it was most likely going to China.

The Pacific Bravo on Monday changed its automatic identification system (AIS) destination to Sri Lanka, where it meandered off the southern coast for a little more than a day, the ship-tracking data showed.

Late on Tuesday evening, the tanker sailed away from Sri Lanka toward the busy waterways of the Strait of Malacca, a key shipping lane toward East Asia, although its AIS destination was still set as Sri Lanka.

A ship’s crew manually enters AIS destination settings, and there can be a delay in updates while the vessel is at sea.

“Anyone who does business with this ship, the Pacific Bravo, would be exposing themselves to US sanctions,” a senior US official told Reuters on condition of anonymity.

The Pacific Bravo is owned by China’s Bank of Kunlun, the official said. 

The bank has been the main official channel for money flows between China and Iran since before the last round of sanctions began in 2012. It is majority-owned by China National Petroleum Corp.’s financial arm, CNPC Capital (000617.CN).

“Anyone who does business with this ship, the Pacific Bravo, would be exposing themselves to US sanctions,” Reuters quoted the official as saying.

China is the top buyer of Iranian oil and nearly all its oil payments go through Kunlun, which was established in 2006 as a city commercial bank in Karamay, an oil-producing hub in China’s far-western Xinjiang region.

Earlier this month, Reuters reported that a tanker carrying Iranian fuel oil in violation of US sanctions had unloaded the cargo into storage tanks near the Chinese city of Zhoushan.

The US government reintroduced sanctions against Iran’s oil industry in November but allowed some buyers limited purchases of Iranian crude oil under a waiver program until May 1. Petroleum products had not received official sanctions waivers.

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