Iranian Ship Stuck in Turkey Nears End of Sanctions Limbo

By Patrick Sykes (Bloomberg) —

An Iranian container ship stuck in a Turkish port for three years is preparing to leave in a case that shows the reach — and limits — of sanctions at sea.

Blacklisted by the US, the 187 meter-long (614 feet) container vessel Shamim has sat empty in Istanbul’s state-run port of Haydarpasa since unloading there in Jan. 2021, in full view of the thousands of commuters and tourists who take the ferry between the city’s European and Asian sides every day.

Shamim suffered an engine fault off the coast of Spain in late 2020 and was tugged around 3,500 kilometers (2,200 miles) to Istanbul, according to two people in the shipping industry with knowledge of the matter. Closer private shipyards in western Europe would likely have refused it due to its US designation, another person said. All asked for anonymity to be able to discuss the sanctioned vessel.

While Shamim was ultimately repaired, sanctions slowed the work and also hindered onetime efforts to sell the ship. 

“It attracted my attention because it’s not normal that it got towed such a long distance from the Mediterranean to Haydarpasa in the middle of Istanbul,” said Yoruk Isik, founder of Istanbul-based maritime consultancy Bosphorus Observer. “If they wanted to do something under the radar they kind of messed it up.”

The Iran-flagged ship has been sanctioned since 2020 under measures designed to crimp the Iranian economy and hinder its development of nuclear technology. Washington also sanctionedShamim’s beneficial owner Hafez Darya Arya Shipping in January 2021, describing it as a subsidiary of state-run Islamic Republic of Iran Shipping Lines.

Iran says its atomic program is for peaceful purposes and not for nuclear weapons. It wasn’t possible to verify the alleged link between Hafez Darya Arya Shipping and IRISL. Neither company responded to a request for comment.

Companies that want to deal with sanctioned entities without risking penalties can apply to the US for exemptions. It’s not clear if the Istanbul port authorities sought or got one to host Shamim. The Turkish Transport Ministry and Turkish State Railways, which operates Haydarpasa, didn’t respond to a request for comment. The US Treasury declined to comment.

Treasury Under Secretary Brian Nelson last month asked Istanbul shipping companies for their cooperation in stopping what he described as an “uptick” in US-sanctioned Russian vessels using Turkish ports. He warned that firms that provide services to such ships risk being sanctioned themselves, without identifying any specific companies.

Despite the risks, Turkey remains an attractive place to do business for many Iranians thanks to its proximity, visa-free travel and connections to the global financial system. After years of decline, trade between the countries has been rising since 2020, making Turkey the Islamic Republic’s second-biggest export market, according to data compiled by Bloomberg.

Shamim’s owner tried to sell it to local shipyards but couldn’t find a buyer — again because of sanctions, two people familiar with the talks said.

Repair work, involving engineers from Iran, proved challenging due to the extent of the damage and the difficulty in sourcing parts for a blacklisted ship, other people said. Shamim performed tests throughout Monday and Tuesday ahead of its expected departure, one of them added.

A Turkish government document seen by Bloomberg shows the ship was fined four times for mechanical changes made without the necessary permission from the port authorities. 

All the while, Shamim racked up port fees of $1,200 per day, one of the people said. That adds up to about $1.3 million since its arrival.

“It shows that sanctions really cripple sometimes,” said Isik at Bosphorus Observer. “You can’t stop these countries but you create annoyances, you create logistical nightmares.”

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