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Fri 17 Aug 2012 02:32 PM

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Tanzania set to drop Dubai shipping agent

East African country plans to cancel contract after claiming Iranian ships were reflagged

Tanzania set to drop Dubai shipping agent

Tanzania intends to cancel its contract with a Dubai-based shipping agent, saying the company reflagged Iranian ships with the Tanzanian flag without its knowledge, a minister for the semi-autonomous Zanzibar government said on Friday.

The east African country said it was in the process of de-registering 36 Iranian vessels after an investigation into the origin of the ships concluded they were from Iran.

As a semi-autonomous region, Zanzibar has the authority to register ships - and has its own contract with Philtex Corporation - which then fly the Tanzanian flag.

Suleiman said Tanzanian Prime Minister Mizengo Pinda on Thursday informed the union's Parliament about Zanzibar's decision to terminate its contract with Philtex.

US lawmakers on Tuesday urged the US government to take action against Tanzania for flouting sanctions against Iran, putting further pressure on the Tanzanian government to cease oil-related dealings with Tehran.

The United States has a longstanding ban on imports of Iranian oil and has imposed new economic sanctions that have curbed Iranian oil imports by most other major nations.

The European Union banned Iranian oil imports as well as providing insurance for vessels carrying Iranian oil on July 1, part of international efforts to press Tehran to end a nuclear program the West believes is aimed at producing atomic bombs.

Rashid Seif Suleiman, infrastructure and communication minister from Zanzibar, said his government would act to cancel its contract with Philtex that serves as the island's sole agent for the registration of ships.

"We are de-registering the Iran ships first, then we will move to terminate our contract with Philtex," Suleiman told Reuters by phone from Zanzibar.

Reflagging ships masks their ownership, which could make it easier for Iran to obtain insurance and financing for the cargoes, as well as find buyers for the shipments without attracting attention from the United States and European Union.

"Philtex has had a valid 10-year contract with the Zanzibar government...my ministry is working with the Attorney General's Chambers in Zanzibar to look at all the legal implications," Suleiman said.

Philtex could not be reached for comment.

Tanzania launched an investigation last month over accusations that it had reflagged oil tankers from Iran, and asked the United States and European Union to help it verify the origin of the tankers flying the east African country's flag.

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