US worried about deceptive activity by Iranian company in Malta

The US pressured the government to approach private law firms and “recommend” they be vigilant over transactions involving an Iranian shipping line flouting UN sanctions, according to a leaked diplomatic cable.

Dated May 21, 2009, the cable gives details of a message the US State Department relayed to the Maltese government about the actions of the state-owned Islamic Republic of Iran Shipping Line (IRISL).

The Americans were worried IRISL was setting up phantom companies and engaging in other deceptive activities in Maltese jurisdiction “with the help of Maltese law firms” in a bid to breach UN sanctions.

The cable, classified as secret by the State Department, was released by whistleblower site WikiLeaks.

It refers to a meeting in Wash­ington in April 2009 between the Treasury Under-Secretary for Terrorism and Financial Intelligence, Stuart Levey, and Alan Caruana, an official at the Maltese Finance Ministry.

Mr Caruana was described as “receptive” to the US message and shared a document containing 2008 shipping statistics for IRISL, which operates from Malta Freeport.

The Maltese official was quoted saying the government had “pushed away” Iranian business and Malta and the US had “a good policy of sharing information”.

Concerns stemmed from the fact that IRISL had taken action to conceal the true identity of its vessels in an attempt to maintain access to capital and avoid scrutiny by foreign governments.

The Iranian company began to reflag and rename its ships, removing its logo from the vessels and setting up new management companies abroad to hide ownership and involvement.

The cable noted that some Iranian ships sailing under the Maltese shipping flag were renamed for the second time in a year. IRISL had also registered new companies in Malta and Hong Kong.

The US urged the government to apply pressure on law firms to be more vigilant when dealing with IRISL.

In mid-February 2009, the law firm Ganado and Associates terminated all aspects of its professional relationship with IRISL, citing as reasons compliance with UN and US sanctions and Maltese anti-money laundering laws, the cable said.

According to the cable, IRISL then engaged the services of another law firm, Fenech and Fenech Advocates.

Reacting to the news, the managing partner of Fenech and Fenech Advocates, Ann Fenech, confirmed her company offered its services to IRISL but insisted these were limited to ship registration under the Maltese flag on which there were no UN or EU sanctions.

Dr Fenech said she had no idea what services Ganado and Associates were asked to perform for IRISL in 2009.

“My firm’s position is that, as long as the government con­tinues to permit registration under the Malta flag, Fenech and Fenech Advocates will continue to provide this limited service,” she said, adding each and every service rendered is first referred to the Foreign Ministry’s sanctions monitoring board for approval.

Dr Fenech reiterated that her firm enjoyed “an excellent working relationship” with officials at the US Embassy.