FAST TRACK FORWARDING Group

EU importers and exporters are using an Iranian shipping company to move cargo through the Red Sea – ironically a safe passage for Iranian shipping in a region where Iranian supplied misiles and drones are preventing global lines from going through. HDASCO which is the container shipping line under the IRISL group, is operating a service between Iran and Europe. Not only providing direct sailing options, but also using transhipment. As shown in below image, 3 of their vessels – “Kashan”, “Daisy” and “Shiba” are currently in Europe. Now the whole thing becomes slightly tricky. US has sanctions against IRISL and HDASCO. These are on the OFAC sanctions list as part of the sanctions levied on Iran by the US. EU removed these sanctions in 2016 as part of the agreement in relation to the Iran nuclear program. US did also do this initially in 2016 but in 2018 they re-instated the sanctions. EU has not re-instated the sanctions. This places companies in the EU who work with HDASCO in a difficult position. They are not in breach of any EU sanctions. However, they do risk incurring sanctions from the US, as US has been known to sanction non-US entities for dealing with entities on the OFAC list. This could for example be in the form of banning such companies from doing business with any US-based entity or seizing assets in the US. The EU has a regulation known as the Blocking Statute. This makes it illegal for EU entities to comply with extra-territorial sanctions – such as for example those imposed by the US. For an EU-based company this means they are caught between a rock and a hard place. They cannot be compliant with both the US sanctions and the EU Blocking Statute at the same time. There are only very few legal cases to set any precedent, and for now it appears that the Blocking Statute by the EU is quite ineffective. However, I would like to introduce a small quote from the law firm Norton Rose Fulbright (see full link below): “[...] the EU Blocking Statute presents EU economic operators with numerous unresolved issues. The EU Blocking Statute seems to have failed insofar as its explicit aim – the protection of EU economic operators from extraterritorial sanctions – has not been achieved. Instead, it seems to allow for potential claims for damages against EU economic operators. The sheer unpredictable scope of Article 6 deepens the already existing dilemma for companies of complying with US sanctions, which concurrently leads to sanctions under the EU Blocking Statute.” Adding to the woes, I am hearing from forwarders in the market that the rates offered by the Iranian line from for example India to the Black Sea are at half the rates offered by other lines. This leaves EU companies in a very uncertain situation and in addition leads to Iranian shipping being able to undercut European shipping lines on price – even though it is Iranian weapons which prevent European lines from using the Red Sea. https://shorturl.at/NUCpn