It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Wednesday, December 04, 2024
U.S. Sanctions Mexico's Gulf Cartel for Illegal Fishing off Texas
A U.S. Coast Guard crew inspects a lancha seized in the U.S. Gulf of Mexico for illegal fishing (USCG file image)
Last week, the U.S. Treasury imposed sanctions on five Mexican cartel members who help run a large-scale illegal fishing and trafficking operation in the U.S. Gulf of Mexico.
U.S. Coast Guard boat crews based in Texas spend considerable effort catching Mexican high-speed fishing boats (lanchas) in U.S. waters. In FY2021, coastguardsmen seized 78 lanchas and 15,000 pounds of fish - mainly red snapper, the primary target species for Mexican illegal fishing operators. The fishermen are attracted by the comparatively healthy fishery in the U.S. exclusive economic zone, but when they encounter the Coast Guard, their boats and catch get confiscated.
The Treasury says that these fishermen are backed by the Gulf Cartel, one of Mexico’s most dangerous criminal organizations. The Gulf Cartel operates primarily in Mexico's Tamaulipas State, Mexico, and makes money moving drugs and migrants into the United States.
According to the Treasury, the cartel also runs a fishing camp for lancha fishermen out of Playa Bagdad, just south of the Texas border. The fishing crews bring their illicit catch back to the camp, where it is resold and (often) exported back into the United States under a false label.
This is a multimillion-dollar activity for the cartel, and it underpins other revenue opportunities. In addition to the illegal fishing operation, the cartel uses the same lanchas for human smuggling and narcotics trafficking in the Gulf of Mexico.
Treasury has identified two Mexican nationals - Raul Decuir Garcia and Ildelfonso Carrillo Sapien - as the owners of the lancha camp. In addition, the agency named Ismael Guerra Salinas and his brother Omar Guerra Salinas as the Gulf Cartel members with territorial responsibility for Playa Bagdad. They allegedly oversee the illegal fishing operation, along with drug trafficking and human smuggling.
The agency also named Francisco Javier Sierra Angulo as the current chief of the Gulf Cartel in Matamoros, Tamaulipas.
"[This] action highlights how transnational criminal organizations like the Gulf Cartel rely on a variety of illicit schemes like IUU fishing to fund their operations," said Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith.
The U.S. Coast Guard, Homeland Security Investigations, the Drug Enforcement Administration and the Mexican financial intelligence agency UIF all contributed to the sanctions designations.
US Increases Sanctions on Iran’s Oil Exports Listing 35 Tankers/Managers
US targeted Iran's oil exports with a new round of tanker and manager sanctions (file photo)
The Biden administration launched a new wave of sanctions targeting Iran’s oil and chemical industry citing its continued use to fund nuclear activity, development of weaponry, and financial support to regional terrorist activities by the Houthis and others. It followed an action seven weeks ago targeting Iran’s petroleum and petrochemical sectors with the U.S. saying the efforts will increase Iran’s cost for transporting petroleum products to foreign markets.
“Iran continues to funnel revenues from its petroleum trade toward the development of its nuclear program, proliferation of its ballistic missile and unmanned aerial vehicle technology, and sponsorship of its regional terrorist proxies, risking further destabilizing the region,” said Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith. “The United States remains committed to disrupting the shadow fleet of vessels and operators that facilitate these illicit activities, using the full range of our tools and authorities.”
The focus of the action is on large crude tankers with a total of nine tankers each around 300,000 dwt, as well as five smaller crude oil tankers and three product tankers. The U.S. contends that collectively the tankers have shipped tens of millions of barrels of oil for Iran.
The tankers represent a broad range of flags all linked to the shadow fleet operations. Four of the tankers show registry in the Cook Islands, while the others are divided between the Marshall Islands, Guyana, São Tomé and Príncipe, San Marino, Belize, and Honduras. One tanker is registered in Liberia and one in Iran. Five of the listed tankers are showing a registry in Panama, which last week reported it was expediting revoking its registry against six other tankers that were sanctioned by the UK in its efforts to enforce the G7 price cap on Russian oil.
The U.S. cites examples of the cargoes moved by the vessels many of which operate at the periphery of the industry. Among the vessels listed is the Ceres I, which the U.S. cites for a ship-to-ship transfer of Iranian oil. They also point out that the same vessel was presenting inconsistent tracking signals in July 2024 when it and a Hafnia tanker collided in Malaysian waters. Malaysia initially accused the vessel of leaving the scene of the incident and has repeatedly said it has been unable to locate the responsible owners of the vessel.
“Iran relies upon a sprawling network of tankers and ship management firms in multiple jurisdictions to transport its petroleum to overseas customers — using tactics such as false documentation, manipulation of vessel tracking systems, and constant changes to the names and flags of vessels,” the U.S. Department of the Treasury said launching the new sanctions.
It also targeted a wide group of management companies that they report are facilitating the transport of crude and oil products. The companies range from bases in the UAE, Seychelles, Cayman Islands, Marshall Islands, and Pakistan to China, Hong Kong, Panama, Liberia, and India. The U.S. links them to oil deliveries and transactions with Chinese oil companies.
The latest sanctions are one of the broadest efforts launched by the administration. They said it was in response to the October 1 attack on Israel as well as continued escalation by Iran in its efforts and support of regional groups.
U.S. Treasury Reduces Fine for "Egregious" Iran Sanctions Violator
The former Australian polypropylene plant is now installed at the Ilam site outside Chovar, Iran, above (Courtesy Arghavan Gostar)
Berlin-based industrial equipment firm Aiotec has been hit with a multimillion-dollar sanctions penalty for an elaborate scheme to buy and ship an entire polypropylene plant to Iran, in violation of U.S. sanctions. The penalty is for repeated, "egregious" and "willful" sanctions violations, but the U.S. Treasury decided to suspend $9.5 million of the $14.5 million fine in exchange for Aiotec's promise to comply in the future - thereby allowing the small German company to remain in business.
Aiotec GmbH, an industrial equipment sourcing company, got in touch with an American equipment brokerage in 2015 about the possibility of buying a polypropylene manufacturing plant located in Australia. The broker was handling the sale on behalf of the plant's Australian owners, and since the broker was located in the United States, U.S. sanctions on Iran applied.
Aiotec agreed to buy the plant and told the U.S. broker that it would be dismantled and shipped to Turkey, where it would be reassembled and put into use. The firm made repeated statements that it would remain in compliance with all U.S. sanctions measures: its executives signed documents stating that it had no other destinations in mind for the equipment, had no other foreign partners, and would not ship the goods to any sanctioned country or entity. Based on these assurances, the U.S. broker concluded the deal with Aiotec and allowed the German firm to begin removing equipment from the site.
In reality, Aiotec had reached a secret resale and transfer agreement with an Iranian petchem operator, Petro-Iranian Downstream Industries Development Co. (PIDID). In 2016, Aiotec began to dismantle the plant, and equipment exports began in 2017 from the Australian port of Newcastle. The company hired two freight forwarders to handle the shipments, and it instructed both of the forwarders to falsify the destination on Australian customs documents as either the UAE or Turkey. However, each time a ship was loaded out with the plant's gear, the ultimate destination was actually Port Bandar Imam Khomeini, Iran - a clear violation of U.S. sanctions on the Iranian energy industry.
Aiotec repeatedly sent the U.S. broker reassurances and documents purporting to show that the shipments complied with all U.S. sanctions measures, including the protective agreement that the equipment would only be delivered to Istanbul and reassembled in the city of Van, Turkey. This was false, and could have been discovered using AIS data to monitor the movements of the vessels involved (or to detect a suspicious absence of AIS transmissions). Despite apparent misgivings and multiple requests for clarification, the U.S. broker accepted Aiotec's assurances and allowed it continued site access at the plant in Australia.
In August 2018, an anonymous source sent the U.S. broker a copy of Aiotec's resale agreement with Iranian firm PIDID. The broker immediately suspended site access at the plant, stranding some of the last components in Australia. When the U.S. broker demanded clarification, Aiotec denied the PIDID document's authenticity; provided falsified bills of lading that purported to show that the shipments had gone to the UAE, then on to Turkey; sent a copy of a forged "agreement" with a Turkish company regarding the sale; and sent a fake threat from the Turkish "buyer" that promised to scuttle the deal if the last equipment shipments weren't delivered.
In November 2018, the U.S. broker and the Australian owner of the plant agreed to believe Aiotec, and they restored site access. Aiotec promptly proceeded to ship the last of the gear to Iran; the last chartered ship departed Australia in April 2019, and Aiotec delivered its final falsified shipping documents to the U.S. broker in June 2019. The U.S. broker was properly paid for the transaction, receiving a total of $9.5 million in 11 installments.
The plant's potential strategic value was significant. Treasury noted that the facility could provide a new revenue stream to Iranian petrochemical industries, which have long been a target of U.S. economic restrictions.
Treasury noted that Aiotec is a small company with few employees, and agreed not to impose the burden of the full statutory maximum fine of $19.5 million - or even the assessed fine of $14.5 million. So long as Aiotec hires a compliance officer and undergoes annual audits, it will only pay $5 million.
The U.S. Attorney's Office, Central District of California, and the Federal Bureau of Investigations announced that they have arrested a Chinese national residing in California and charged him with smuggling weapons through containers in the Port of Long Beach to North Korea. The firearms, ammunition, and other military items were being concealed in containers outbound for Long Beach for Hong Kong and ultimately North Korea.
“We have arrested a defendant who allegedly acted at the direction of the North Korean government by conspiring to illegally ship firearms, ammunition, and other military equipment to North Korea,” announced United States Attorney Martin Estrada.
Shenghua Wen, age 41 and a Chinese national, was living in Ontario, California after overstaying his student visa.
According to an affidavit filed with the complaint, Wen obtained firearms, ammunition, and export-controlled technology intending to ship them to North Korea. Wen and his co-conspirators allegedly exported shipments of firearms and ammunition to North Korea by concealing the items inside shipping containers that were shipped from Long Beach through Hong Kong to North Korea.
“The significance of this arrest and discovery of this scheme cannot be overstated,” said FBI Los Angeles Assistant Director in Charge Akil Davis. “Not only did the investigative team prevent additional restricted items going to the North Korean regime, but they gathered valuable intelligence for the United States and our allies.”
Law enforcement reports in August it seized at Wen’s home two devices that he intended to send to North Korea for military use. This included a chemical threat identification device and a hand-held broadband receiver that detects eavesdropping devices. Law enforcement also seized in September approximately 50,000 rounds of 9mm ammunition that Wen allegedly obtained to send to North Korea.
A review of Wen’s iPhone revealed to law enforcement that in December 2023, Wen smuggled items from Long Beach to Hong Kong with their destination being North Korea. Messages retrieved from Wen’s cell phones revealed discussions he had with co-conspirators about shipping military-grade equipment to North Korea. Some of these messages include photographs that Wen sent of the items.
In addition, they stated that from January to April 2024, Wen sent emails and text messages to a U.S.-based broker about obtaining a civilian plane engine. There also were several text messages on Wen’s iPhone concerning price negotiation for the plane and its engine.
“The results of today’s arrest and search warrants are a testament to HSI and our partner agencies' commitment to national security and protecting our sensitive technology,” said Homeland Security Investigations (HSI) San Diego Special Agent in Charge Shawn Gibson. “It is a federal crime to illegally obtain and export certain US technologies by foreign countries and those who seek to circumvent the law will be thoroughly investigated.”
Wen is being charged with a felony that carries a statutory maximum of 20 years in federal prison. U.S. authorities said his arraignment is expected to occur in the coming weeks.
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