Blog Posts

In the Grace I’s Wake: Ship Management and Sanctions Evasion (Part 2)

06/03/20 13 minute read

This is the second in a series on Iranian sanctions evasion in the maritime shipping industry. Follow these links to read the intro and part 1 of the series.

We continue our investigation into the Grace I, a Panama-flagged oil tanker seized off the coast of Gibraltar last July while shipping 2.1 million barrels of Iranian crude oil to Syria. In Part 1, we looked into the shell company that owned the Grace I and found the Al Aqilis, an Emirati family with a history of supporting Iranian interests against international sanctions.

In Part 2, we take a closer look at the Grace I’s ship manager, a Singapore company with hidden ties to the Al Aqilis that plays a central role in this sanctions evasion scheme.

The Ship Manager

At the same time the Grace I was owned by St. Kitts shell company Grace Tankers Ltd, it was managed by a Singapore company called Iships Management Pte Ltd.

Shipowners generally hire third-party management firms to operate and maintain their vessels. These ship managers can hold a range of responsibilities, from registration and insurance to technical maintenance, hiring the crew, and managing commercial operations.

Given their control over a vessel’s day-to-day operations, ship managers can be as relevant as (or more relevant than) shipowners when investigating illicit activity. We often find shipowners and ship managers collaborating on sanctions evasions schemes. In other cases, we find the same individuals behind both.

For the Grace I, we already determined that the Al Aqilis controlled the legal shipowner. Now, we want to take a closer look at the parties behind Iships Management to better understand both the role it played in this scheme and the extent of the Al Aqilis’ involvement.

A Closer Look at Iships Management

At first glance, Iships Management’s ownership doesn’t raise any red flags.

Singapore company records identify its two owners: Singapore citizen Rahul Bhatnagar (with 80 percent) and Indian citizen Harbans Singh (with 20 percent). No undue complexity or layers of shell companies here. Bhatnagar is a director as well, and has been since the company was founded in December 2013.

Web searches don’t turn up much on either individual, apart from bare-bones LinkedIn profiles that confirm their location in Singapore and involvement in the shipping industry. Nothing about them immediately suggests that Iships Management poses a risk.

In reality, though, Iships Management is central to this sanctions evasion operation.

A Front for Iran

Last August, while the Grace I was still detained in Gibraltar, the U.S. Department of Justice (DOJ) issued a seizure warrant and forfeiture complaint against the vessel and its cargo.

In the complaint, DOJ alleged that Iships Management is “a front company that conceals illegal oil sales for Iranian entities,” specifically the U.S.-sanctioned Islamic Revolutionary Guards Corps (IRGC) and National Iranian Oil Company (NIOC).

The complaint describes a complex web of front companies, fraudulent paperwork, and secret transactions surrounding Iships Management, all intended to help Iran circumvent international oil sanctions. Some of the more explicit allegations include:

  • Iships Management used front companies to launder millions of dollars in connection to the illicit oil shipments.
  • Iships Management employees corresponded with IRGC Brigadier General and Iranian Minister of Petroleum Rostam Qasemi about providing services in Iran.
  • “At least one” Iships Management employee is actually a NIOC agent.

Ties to the Al Aqili Network

Furthermore, DOJ describes a deep collaboration between Iships Management and the Al Aqili Group. Shell companies owned by Al Aqili family members and companies worked with and for Iships Management to launder money and otherwise facilitate this sanctions evasion scheme.

In the complaint’s oblique wording, Iships Management is part of “a network of companies controlled by a company registered in the UAE.” This unnamed UAE company may be part of the Al Aqili Group.

The complaint’s specific allegations draw on a host of confidential and non-public data sources. However, we can independently verify the connection between Iships Management and the Al Aqilis through public records and other open source information.

Here are three of the most compelling links:

Grace Tankers

We covered some of this ground already in our previous post. Panama public records prove Yaser Mohamed Saleh Al Aqili’s hidden control of the Grace I through Grace Tankers Ltd in St. Kitts (see Fig. 1). This implies, at minimum, a business relationship between the Al Aqilis and Iships Management. As the shipowner, Grace Tankers Ltd, would have hired Iships Management to manage the Grace I.

Shared Directors

Our initial look at Iships Management’s ownership didn’t raise any obvious red flags. When we look a little deeper, however, we find that its majority shareholder has ties to the Al Aqili corporate network.

Rahul Bhatnagar is Iships Management’s director and 80 percent shareholder. He is also co-director of another Singapore company, Avantgarde Shipping Pte Ltd, with British national Gary Neil Webster and Singapore national Devanandan Kunjayyappan.

Both of these men are frequent business associates of the Al Aqilis. Webster and Kunjayyappan own and/or control multiple Al Aqili Group companies, often in direct partnership with an Al Aqili relative (see Fig. 1). Here are just a few examples:

  • Gary Neil Webster co-owned a Dubai company called Aali Investments LLC with Mohamed Saeed Al Aqili prior to his death.
  • Webster and Nader Mohamed Saleh Al Aqili jointly own multiple Dubai companies, including Plachem International Trading LLC, Mosaik Electronics LLC, and Avantgarde International Logistics LLC.
  • Webster and Kunjayyappan are both shareholders of another Dubai company, ECB International LLC. As of June 2018, ECB International was the sole shareholder of Avantgarde Petroleum FZC, which uses the same Dubai P.O. Box as the Al Aqili Group.
Avantgarde Petroleum in turn has two subsidiaries: Czech Republic company Ormus Oil SRO, which has Nader Mohamed Saleh Al Aqili as managing director; and Malta company Avantgarde Tankers Ltd, which has Kunjayyappan as a director.

[Fig. 1: Snapshot of connections between Iships Management and the Al Aqili family.]

Tracing the connections between Bhatnagar, Webster, Kunjayyappan, and the Al Aqilis quickly gets complicated. But, in short, these interlocking relationships provide another independent link between Iships Management and the Al Aqilis.

Web Domain Registered to Al Aqili-Linked Address

420 Oud Metha Tower in Dubai is an address frequently associated with the Al Aqilis.

We find it in OFAC’s designation of a front company in an Al Aqili partner network (Fig. 2).

[Fig. 2: Excerpt from OFAC designation of Polinex General Trading LLC.]

OFAC named that same building, without specifying a unit number, when it sanctioned the Al Aqili Group.

ECB International, which has multiple ties to the Al Aqilis, lists that address as its “Head Office” on its website (Fig. 3).

[Fig 3: ECB International contact information from website (as of May 28, 2020)]

Iships Management is based in Singapore. Both its registration documents with Singapore’s Accounting and Corporate Regulatory Authority and the “Contact Us” section of its website provide a Singapore address. However, its web domain is registered to 420 Oud Metha Tower in Dubai. (Fig. 4).

[Fig. 4: Excerpt from Iships Management website domain registration (as of May 28, 2020)]

Furthermore, although the website’s “Contact Us” page lists only a Singapore address, it labels a Dubai branch on the map (Fig. 5).

[Fig. 5: Iships Management website “Contact Us” page lists a Singapore address but labels a Dubai branch on the map (as of May 28, 2020).]

Up to this point, public data has demonstrated a clear business relationship between the Al Aqili corporate network and Iships Management. The Al Aqilis evidently contracted Iships Management to operate the Grace I, and Iships Management’s majority shareholder is in business with several Al Aqili associates.

However, DOJ described a much closer relationship. According to the complaint, Al Aqili companies and Iships Management operated almost as a single entity — paying each other’s expenses, using a single email domain for employees of different companies, and renewing each other’s web domain registration. This shared address could offer further evidence of that collaboration.

Al Aqilis Again

Iships Management appears to be another node in the network of front companies the Al Aqilis use to support Iran.

U.S. authorities have stated explicitly that Iships Management is a front for Iran and hinted that it is controlled by the Al Aqilis. Separately, our investigation into the ownership and control of Iships Management continued to uncover the Al Aqilis, their associates, and their companies. (Even more ties between Iships Management and the Al Aqilis appear when you look at the rest of the Iships Management fleet, but we’ll cover that later in this series).

Next week: In Part 3, we untangle the mystery of the Grace I’s former ship manager, Russian Titan Shipping Lines, and its surprising ties back into this network.

More From This Blog Series:

Related Resources

All Resources
Everything you need to know about Chinese SASACs
Blog Posts
4 minute read
Understanding the Chinese government’s pervasive influence over the country’s domestic and international companies is crucial to...
Read More
Uncovering 3 Non-Obvious Indicators of Forced Labor Risk
Blog Posts
4 minute read
By asking U.S. importers to prove that their supply chains are free of forced labor, the Uyghur Forced Labor Prevention Act (UFLPA) has...
Read More
China’s Use of Golden Shares: A Case Study on Alibaba
Blog Posts
4 minute read
In 2017, the Cyberspace Administration of China (CAC), China’s nominal internet regulator fully under the control of the Chinese Communist...
Read More