* Iran official sees drop in shipping volumes, difficulties
* Risks of doing business with Iran seen as still too great
By Jonathan Saul and Parisa Hafezi
LONDON/ANKARA, May 28 Global shipping lines are
increasingly shying away from handling cargoes to Iran as
restrictions on banking and insurance continue unabated, despite
an interim agreement between Tehran and the West that called for
limited sanctions relief.
Iran in the past depended on foreign ships for much of its
imports, but it is now relying more on land routes and its own
commercial fleet. Earlier this month, trade sources said
hundreds of thousands of tonnes of grain and sugar were stuck in
Iran was never barred from buying food or other humanitarian
goods under sanctions imposed by the European Union and the
United States because of its disputed nuclear programme, but the
restrictions have hit approved deals as well.
"The principle sanction against non-U.S. companies is that
they can be denied access to U.S. banking, and therefore they
can't trade in U.S. dollars," said Doug Maag of law firm Clyde &
Co. "That is a very real and adverse result."
Global shipping fees are transacted in U.S. dollars, which
means dealing with Iran could make companies vulnerable to being
frozen out of the U.S. financial system.
Iran and Western governments reached an interim agreement in
November last year over Tehran's nuclear work in exchange for
limited sanctions relief for six months - from January to July
this year - under the Joint Plan of Action (JPOA).
Correspondence since January seen by Reuters shows that U.S.
group United Against Nuclear Iran (UANI), whose board includes
former heads of the CIA and British intelligence, continues to
monitor European shipping companies on any deals with Iran.
"The risks of doing business with Iran are still far too
great to return. It is too soon," said Mark Wallace of UANI,
which has targeted companies trading in Iran.
"People are nervous," said Wallace, a former U.S. ambassador
to the United Nations.
Greece-based Efploia Shipping wrote in a recent letter to
UANI, "Owners do not take such matters lightly ... and have
implemented several exhaustive clauses in order to ensure that
such trade is legitimate."
The firm did not respond to requests for comment.
PORTS UNDER STRAIN
The 2011 blacklisting of Iranian port operator Tidewater
Middle East Co, which operates seven terminals including the
biggest container port Bandar Abbas and major grain terminal
Bandar Imam Khomeini, has also discouraged foreign shipping
Maersk Line, the world's biggest container
company, pulled out entirely from Iran in 2012, joining an
exodus that has included major groups MSC and CMA CGM
and smaller firms.
Iranian government officials also pointed to a harder
"Shipping volumes have dropped as there are various problems
like difficulties at customs; international insurance companies
are hesitant to cover ships en route to Iran; as well as letters
of credit problems," one Iranian official said.
"Iran hopes that lifting sanctions will revive the
An Iranian trade source, who previously worked as a
government official, said the country was relying more on its
domestic shipping fleet or using land routes.
"Iranians prefer to use foreign shipping companies less and
less after all the fuss over violating sanctions. They can be
easily tracked," the trade source said.
"Especially since the nuclear talks have started, the
government is very careful not to be caught. They use more
trucks; it takes longer but that is safer."
Sanctions have also made global ship insurers wary of
covering cargoes and vessels involved in any trade with Iran,
and the recent agreement, which lasts only until July 20, has
not made any difference.
"Until something more long-term is agreed, insurers have
tended not to change their internal processes," Chris Hill of
Clyde & Co. said.
"If you start sending out a message to your staff that for
six months they can do certain business with Iran, it can create
mixed messages, and insurers tend to be cautious about this."
(Editing by Veronica Brown and Jane Baird)