A legal exit route has opened for the shadow fleet. The Trump administration has authorized the purchase for scrapping of vessels sanctioned over alleged Iranian cargo shipments, in what analysts describe as a move to squeeze the funding sources of Iranian forces.
According to the Wall Street Journal on Wednesday, the Trump administration issued a license to GMS, the world's largest ship recycling buyer, to purchase three vessels sanctioned over alleged Iranian cargo shipments for the purpose of scrapping. The ships are among more than 50 vessels sanctioned by the United States last year over their links to Iranian shipping magnate Mohammad Hossein Shamkhani.
The measure is seen as opening a legal exit path for owners of vessels in the so-called "shadow fleet" that transports illicit cargo from countries such as Iran and Russia. The decision comes as the Trump administration tightens its crackdown on Iran-linked vessels.
GMS applied to the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) for a general license to scrap sanctioned vessels. GMS argues that the move can reduce the size of the shadow fleet at sea. Shadow fleet vessels are older and more poorly maintained than typical merchant ships, posing environmental and safety risks.
The shadow fleet, which seeks to evade sanctions, has grown rapidly as the United States, the European Union and the United Kingdom have recently tightened sanctions on Iran and Russia. According to Clarksons Research, sanctioned vessels currently number 1,836 in total, including 55 container ships.
"Some of the sanctioned vessels want to be scrapped, but legal means are limited," said Richard Meade, an analyst at Lloyd's List Intelligence. "If this licensing measure continues, it will become a legal route for exiting the shadow fleet."
The four vessels designated for scrapping are part of an illicit shipping network controlled by Shamkhani. Shamkhani is the son of Ali Shamkhani, a former security adviser to Iran's supreme leader. Ali Shamkhani was killed in action in an Israeli airstrike in the early stages of the Iran war.
