September 11, 2023

First ever corporate criminal resolution involving the sale of Iranian oil in violation of US sanctions

The US Department of Justice has resolved a corporate criminal matter with Suez Rajan Limited, a Marshall Islands-registered company accused of conspiring to violate the International Emergency Economic Powers Act (IEEPA).  On April 19, 2023, the company pleaded guilty to the IEEPA charges, and was sentenced to a fine of nearly $2.46 million, and three years of corporate probation.

According to the criminal information, between January and February 2022, Suez Rajan Limited and its operator, Empire Navigation Inc., registered in the Marshall Islands and operating in Greece and elsewhere, facilitated the sale of oil from Iran for the ultimate benefit of the Islamic Revolutionary Guard Corps (IRGC) and the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF), entities that are designated by the US Department of State and the United Nations Security Council.  As outlined in the court documents, Empire operated the M/T Suez Rajan pursuant to a management agreement with Suez Rajan Limited.  Using false information on the vessel’s logbook and oil record book, Empire and Suez Rajan Limited concealed the quantity of oil transferred in a ship-to-ship transfer from a Marshall Islands vessel, the Brilliance.  Whereas fewer than 4,000 barrels of oil were actually transferred, the ship’s log and draft depth reports indicate a much larger transfer.  Less than a week later, the Suez Rajan engaged in a  surreptitious transfer of Iranian crude oil from the Virgo, a Panama-registered ship that appears to have been loaded with Iranian petroleum at the Kharg Oil Terminal several weeks earlier.

In connection with these transactions, the defendants and other co-conspirators caused a US financial institution to process two US dollar transactions worth hundreds of thousands of dollars to pay the chartering fees.  These wire transfers ultimately facilitated the transportation of Iranian-origin petroleum for the benefit of the IRGC and IRGC-QF, and were conducted without a license issued by the Office of Foreign Assets Control of the US Department of the Treasury, as would have been required.

The terms of Suez Rajan Limited’s three-year probation require the company to:

  • Cooperate fully with government agencies in the investigation;
  • Make full and truthful disclosures’
  • Designate and make available company employees and agents and present or former officers, directors, employees and agents;
  • Confirm implementation of a compliance program designed to prevent and detect violations of US sanctions laws and regulations (including screening US dollar transactions and currency conversions that transit the United States, and transactions involving US persons);
  • Provide sanctions compliance training for employees and agents, and;
  • Submit quarterly reports describing the status of the company’s compliance program and improvements thereto, and identifying any violations that have come to the company’s attention.

 

In parallel with the Suez Rajan Limited resolution, Empire has entered into a three-year deferred prosecution agreement with the DOJ, and has cooperated with a seizure warrant by transporting the Iranian oil cargo to the United States.  The civil forfeiture complaint alleges that the Suez Rajan utilized surreptitious means to hide the Iranian origin of the ship’s cargo, and transferred the cargo to other vessels for the benefit of the IRGC, the IRGC-QF, and the National Iranian Oil Company (NIOC), which was designated by OFAC in 2020 for its support of the IRGC-QF.  On April 19, 2023, the United States obtained an order allowing for the interlocutory sale of the forfeited cargo, which has an estimated value of up to $60 million, and which, if not sold quickly, would incur significant daily storage and demurrage costs.

DOJ press releaseInformation |

Plea agreement | Complaint for forfeiture in rem