By Jonathan Saul
LONDON, March 4 Archer Daniels Midland Co
said it unwittingly used a vessel controlled by a
sanctioned Iranian shipping firm last year to transport grain in
what was an effort by Tehran to hide the ship's ownership.
The Islamic Republic of Iran Shipping Lines (IRISL) has
faced Western and U.N. sanctions for years, based on accusations
of transporting weapons, a charge it denies.
Illinois-based ADM, one of the world's largest grain
traders, said in a U.S. regulatory filing that a majority-owned
and controlled affiliate of the company hired a vessel to
transport a cargo of grain in July last year.
ADM officials said on Monday they had no further comment on
the issue beyond what was disclosed in the Securities and
Exchange Commission (SEC) filing dated Feb. 28. IRISL could not
be immediately reached for a comment.
ADM said the name of the vessel and the charterer were not
on the U.S. Treasury's list of targeted individuals or entities
when it made shipping arrangements and paid $481,800 directly to
"It was later determined by the company and its bank that
the vessel involved was beneficially owned by IRISL, a
sanctioned party," ADM said in the filing.
"The involvement of a sanctioned party was inadvertent and
unintentional and we believe the result of a concerted effort by
Iran to hide its ownership of the vessel," it said.
ADM said in the filing that an 80 percent owned and
controlled affiliate hired the vessel.
IRISL, Iran's biggest cargo carrier, has tried to dodge
sanctions by changing its flags and setting up front companies,
the U.S. Treasury and the European Union have said. Last year
IRISL Managing Director Mohammad Hussein Dajmar said if pressure
from Western sanctions continued, the group would face
increasingly grave financial problems.
ADM said in the filing it had made a voluntary disclosure to
the U.S. Treasury's Office of Foreign Assets Control (OFAC)
unit, which enforces trade sanctions.
"Neither the company nor its affiliate nor other of its
subsidiaries have any intention of continuing such activity with
a prohibited party," the U.S. agribusiness giant said.
"There was no profit that can be attributed to this specific
A Treasury spokesman said he could not comment on the ADM
case. However, a voluntary self-disclosure is one factor OFAC
takes into account when determining the appropriate enforcement
response in the case of apparent sanctions violations, he said.
If ADM can show it had due diligence in place because the
underlying transaction was licensed, and that it was a one-time
issue, the company would probably get a warning letter, a former
U.S. Treasury official with knowledge of Iran sanctions said.
"There will be probably a six month to a year period when
they are under investigation and they have to provide documents
and OFAC will probably issue them a warning letter in which case
we will never see it, as they are never made public," the former
ADM did not disclose the name of the vessel or the charterer
in the filing and it was unclear if the grain was bound for Iran
or another destination.
Earlier this year, the Amina, an Iranian-flagged vessel,
fled detention in Sri Lanka's waters and returned to Iran. Sri
Lanka's navy had fired warning shots to prevent the vessel from
leaving, acting on a court order obtained by Germany's DVB Bank
in pursuit of debts it said were unpaid.
The Amina is managed by Tehran-based Rahbaran Omid Darya
Ship Management, which authorities in Brussels and Washington
have said is an IRISL front company.