Lieberman and Collins: Shipping industry must choose between Iran and the US

For years, the United States and Europe have aggressively pursued tough multilateral sanctions to deter conduct by countries that runs contrary to international peace and security. Among the sharpest arrows in our diplomatic quiver, sanctions seek to isolate “rogue” states by denying them access to the benefits of the global economy.

Sanctions are particularly useful when aimed at countries like Iran, which has a history of conduct that directly threatens global security – including its latest egregious act, an alleged plot to assassinate the Saudi Arabian ambassador to the US.

Yet despite sanctions aimed at a broad range of economic activities, Iran and other rogue regimes continue to find ways to thwart these restrictions and engage in activities that fund dangerous pursuits. One such tactic involves the complex labyrinth of international shipping.

Iranian vessels are involved in importing nuclear material and exporting resources that provide the regime much needed currency, helping the country evade sanctions and further its development of a nuclear weapon. Multiple Iranian vessels have also been caught shipping weapons to terrorist groups, including Hamas and Hezbollah.

The nature of the international shipping industry – with numerous and frequently changing vessel owners, lessees, charterers, and sub-charterers (often shell companies), coupled with the inherent mobility of vessels – can make effectively applying sanctions extremely challenging.

One key aspect of the international shipping industry, however, is both controllable and vital to Iran’s shipping activities: the certification of vessels by organizations known as classification societies.

Without certification by a respected classification society, it is difficult – if not impossible – for a vessel to secure insurance or gain entry to a major international port. Certifications are also essential for conducting international trade. In short, without the endorsement of a classification society, a vessel does not have a “license to trade” in the world market.

Classification societies develop technical standards for the design and construction of vessels and other marine structures. Through design reviews and on-site surveys, they certify that vessels meet their standards. They also act as “recognized organizations” of national governments to certify that a vessel complies with the regulations of the country whose flag it is flying.

The major classification societies – numbering only a dozen or so worldwide – maintain personnel in ports around the globe, which allows them to conduct certification-related work wherever a vessel arrives. A classification society might survey vessels of several different countries on any given day, acting as agents for multiple governments.

This practice becomes troubling when one realizes that several prominent classification societies serve as recognized organizations for both Iran (and other rogue states) and the US, as well as states across Europe. In so doing, these classification societies help further Iranian commerce while simultaneously acting as agents of the US and European governments.

Not only does this dual, conflicting role fly in the face of the intent of international sanctions, it also undermines America’s ability to stop the very actions our sanctions against Iran are designed to address. Clearly, the loophole allowing vessels controlled by sanctioned countries to do business as usual needs to be closed.

We, along with our colleague Mark Begich, Democrat of Alaska, have introduced legislation to put an end to this practice. Our bill, “The Ethical Shipping Inspections Act of 2011,” would prohibit the US from delegating representative authority to classification societies that simultaneously conduct inspection, certification, and related services for Iran, North Korea, North Sudan, or Syria. We believe Europe should take similar action to restrict the operations of classification societies that work in and on behalf of Iran and other rogue countries.

Vessels from rogue states must no longer be free to engage in commerce that is at odds with the will of the international community. Depriving rogue state vessels of certification from major classification societies inhibits their mobility and cuts a contribution to their home states’ economies. It’s time to improve the effectiveness of our sanctions regimes by revoking rogue states’ “license to trade” in the global marketplace.

Sen. Joseph I. Lieberman (I) of Connecticut is the chair and Sen. Susan Collins (R) of Maine is a ranking member of the Senate Committee on Homeland Security and Governmental Affairs.