US offers cash to tanker captains in bid to seize Iranian ships

US offers cash to tanker captains in bid to seize Iranian ships
4 Sept 2019 https://www.ft.com/content/20188064-cefb-11e9-99a4-b5ded7a7fe3f

Washington mixes bait and threats as ‘maximum pressure’ campaign against Tehran becomes unorthodox

Four days before the US imposed sanctions on an Iranian tanker suspected of shipping oil to Syria, the vessel’s Indian captain received an unusual email from the top Iran official at the Department of State.

“This is Brian Hook . . . I work for secretary of state Mike Pompeo and serve as the US Representative for Iran,” Mr Hook wrote to Akhilesh Kumar on August 26, according to several emails seen by the Financial Times. “I am writing with good news.”

The “good news” was that the Trump administration was offering Mr Kumar several million dollars to pilot the ship — until recently known as the Grace 1 — to a country that would impound the vessel on behalf of the US. To make sure Mr Kumar did not mistake the email for a scam, it included an official state department phone number.

The remarkable outreach by such a high-ranking official was not an isolated case. Mr Hook, who heads the state department’s Iran Action Group, has emailed or texted roughly a dozen captains in recent months in an effort to scare mariners into understanding that helping Iran evade sanctions comes at a heavy price.

“Iran knows that the success of our pressure campaign depends on vigorous enforcement of oil sanctions,” Mr Hook told the FT. “We have collapsed Iran’s oil exports in a short period of time. We are working very closely with the maritime community to disrupt and deter illicit oil exports.”

The offer to Mr Kumar marks a new front in the US “maximum pressure” campaign designed to starve Iran of cash and persuade Tehran to come to the table to negotiate a broader deal than the nuclear accord that Iran signed with the Obama administration and world powers in 2015.

In response to the FT story, Mohammad Javad Zarif, Iran’s foreign minister, tweeted: “Having failed at piracy, the US resorts to outright blackmail — deliver us Iran’s oil and receive several million dollars or be sanctioned yourself.”

Mr Hook’s message to Mr Kumar came 11 days after the Iranian tanker was released by Gibraltar, where it had been at the centre of a stand-off between Iran and the west.

The vessel was seized by British commandos off Gibraltar in July on suspicions that it was carrying Iranian oil to Syria in breach of EU sanctions. After Iran said the oil would not go to Syria, a court in the British territory ordered its release last month despite a last-minute US legal bid to seize the vessel.

Mr Hook’s emails showed the US was not giving up. His offer to Mr Kumar, whose vessel is now known as Adrian Darya 1, came under “Rewards for Justice” — a 1984 programme to combat terrorism.

According to US officials, the US has recently started using the programme in its efforts to target Iran’s Islamic Revolutionary Guard Corps, and will offer rewards of up to $15m for information that helps the US disrupt Iranian illicit activities.

“With this money you can have any life you wish and be well-off in old age,” Mr Hook wrote in a second email to Mr Kumar that also included a warning. “If you choose not to take this easy path, life will be much harder for you.”

In the intervening two days, the US had watched as the Adrian Darya 1 made “doughnut” shape manoeuvres at sea that suggested Mr Kumar might have been deciding how to react. After the captain failed to respond, Mr Hook emailed him to say that the US Treasury had imposed sanctions on him. Mr Kumar did not immediately respond to a request for comment.

The US campaign comes as Iran threatens to take more steps by Friday to breach commitments made in the 2015 accord if Europe does not provide the financial rewards Tehran was guaranteed under the deal. While France, Germany and the UK are desperate to prevent Iran from going down that route, they are hamstrung by US sanctions.

The US effort to warn mariners about working with Iran comes as it looks for novel ways to pressure Tehran after imposing a raft of harsh sanctions during the past year.

The US official said Washington intended to start focusing even more on enforcement and would offer inducements to urge captains and crew to co-operate, while also threatening to revoke their US visas, which would prevent them from entering US waters, if they did not co-operate.

“We are trying to dry up their labour pool to move illicit oil,” said the official.

Several of the Adrian Darya 1 crew did not return to work after its release last month, according to a second US official.

The US has also warned shipping companies and their crews that they face possible prosecution for helping the Revolutionary Guard Corps, which has been designated a “foreign terrorist organisation” by the Trump administration.

The US Treasury on Wednesday unveiled a fresh swath of sanctions aimed at clamping down on the ability of the Revolutionary Guards to use shipping networks to evade American sanctions.

Washington is also warning ports around the world that they are putting themselves at risk by accepting Iranian ships, partly because of the threat of US sanctions but also because Iranian vessels are no longer able to obtain international insurance.

“We have been telling them that this is like a drunk driver driving without insurance and that they will be on the hook,” said the US official.

As part of the US campaign, the Iran Action Group convinced Panama, the biggest provider of “flags” to ships, to deregister 75 Iranian vessels suspected of illicit activities — including the then Grace 1.

At the weekend, the tanker turned off its transponder in waters off the Syrian coast, making it harder to track. But the US, which is monitoring its movements via satellite, says it is close to the port of Tartus. It expects the ship to unload its crude via ship-to-ship transfers since Syrian ports are unable to accommodate such as large tanker.

The US viewed the UK as naive after it accepted Mr Zarif’s assurance that the ship was not bound for Syria. “It was a big mistake to trust Zarif,” Mr Pompeo said.

The US official said that if the ship delivered its cargo of 2.1m barrels of oil to Syria, it would “expose the Iranian regime for failing to keep its word” to the international community.

“It will force the Iranians into the broad daylight,” the official said.