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Oil supertanker Grace 1 seen in waters of British overseas territory of Gibraltar

Oil supertanker Grace 1, that's on suspicion of carrying Iranian crude oil to Syria, is seen in waters of the British overseas territory of Gibraltar, historically claimed by Spain, July 4, 2019. Picture taken July 4, 2019. Royal Marines from 42 Commando took part in its seizure. They were followed on board shortly by Gibraltar police and the ship was handed over to them to continue the operation. UK Ministry of Defence/Handout via REUTERS

Treasury Is Asked Why US Firm Insures Ships Carrying Iran Oil

Total Views: 3238
March 16, 2024

By Zachary R. Mider and Zeke Faux

(Bloomberg) –A Republican congressman is asking the Treasury Department to explain its handling of a US insurance company that covered dozens of tanker ships suspected of carrying sanctioned Iranian oil.

Representative Zach Nunn of Iowa, a member of the House Financial Services Committee, sent a letter Thursday inquiring about New York City-based American Club. “An American company reaping a profit from its involvement in insuring tankers that are transporting illicit Iranian oil to finance terrorism demands answers from this Administration,” he wrote.

Nunn cited a February report by Bloomberg News showing that American Club covered 21 vessels suspected of carrying illicit Iranian oil, more than any of its 11 larger peers. The insurer had recently dropped 19 other vessels after inquiries from Nunn and Bloomberg, the report stated. The Bloomberg story was based on research by the nonprofit group United Against Nuclear Iran, which maintains a list of ships suspected of carrying the country’s crude. 

US sanctions prohibit Western businesses from knowingly participating in sanctioned activities. But the Treasury Department, which oversees sanctions, asks insurers like American Club to go further and monitor whether ships they cover are secretly trading in sanctioned products. 

Nunn asked Treasury to explain what it’s doing to investigate “American Club and its involvement in the sale of illicit Iranian oil,” as well as what the department is doing more broadly to police American businesses for sanctions compliance.

American Club has said that its compliance program is top-notch and that it would never knowingly insure a ship that violates sanctions. “Our due diligence policies and procedures are known to the relevant authorities, including OFAC, and as far as we know, are accepted by those institutions,” said Daniel Tadros, the company’s chief operating officer, referring to Treasury’s Office of Foreign Assets Control. “We will continue to do the best job possible when it comes to due diligence investigations and to take action when necessary.” 

A Treasury spokesperson didn’t respond to a message seeking comment.

© 2024 Bloomberg L.P.

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