Archer Daniels Midland

Archer Daniels Midland Mistakenly Uses Iranian Ship to Transport Grain

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March 4, 2013

Image: Archer Daniels Midland

reuters logoBy Jonathan Saul

LONDON, March 4 (Reuters) – Archer Daniels Midland Co unwittingly used a vessel controlled by a sanctioned Iranian shipping firm last year to transport grain, in what it said 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 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 filing. 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 the charterer.

“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 a Securities and Exchange Commission filing dated Feb. 28.

“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, suggesting the its Hamburg-based affiliate Alfred C. Toepfer International was involved.

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 that if pressure from Western sanctions continued, the group would face increasingly grave financial problems.

ADM said in the SEC filing it had made a voluntary disclosure to the U.S. Treasury’s Office of Foreign Assets Control 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 transportation activity.”

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 earlier 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.

(c) 2013 Thomson Reuters, Click For Restrictions

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