U.S. must stop countries reflagging Iran ships

(Reuters) - Lawmakers on Tuesday urged the U.S. government to take action against Tuvalu and Tanzania, countries accused of flouting U.S. sanctions by putting their flags on Iranian tankers.

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.

Howard Berman, the top Democrat on the House Foreign Affairs Committee, said the South Pacific island nation of Tuvalu has helped Iran by "reflagging" 22 Iranian oil tankers, despite warnings that it could face U.S. sanctions.

"I recommend that you ... take aggressive action to change Tuvalu's policy of abetting Iran in evading U.S. sanctions," Berman said in a letter to Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner.

Berman said a U.S. bill signed into law this month authorized sanctions against anyone who re-registers Iranian oil tankers. He did not specify what action should be taken, but noted that the law authorizes penalties.

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 pressure Tehran to end a nuclear program the West believes is aimed at producing atomic bombs.

While Berman focused on Tuvalu, in a separate letter Senators Robert Menendez and Mark Kirk called for sanctions against both Tuvalu and Tanzania for reflagging ships.

"The actions of the Tanzanian and Tuvaluan ship registries directly undermine the international community's ongoing diplomatic efforts to prevent Iran from obtaining nuclear and ballistic missile technology, and appear to be in violation of the legislation you just signed into law," Menendez and Kirk said in a letter to U.S. President Barack Obama.

The Tanzanian government said this week it was in the process of de-registering 36 Iranian oil tankers that had been reflagged under the Tanzanian flag without the country's knowledge and approval.

Berman warned the Tuvalu government against reflagging ships last month.

In response to the letter, Tuvalu confirmed it had registered National Iranian Tanker Company vessels, but said it would monitor the vessels and take "appropriate action" against any Tuvalu flagged vessel that violated U.N. sanctions.

Earlier this summer, Berman also called for Tanzania to stop reflagging Iranian ships.

Ship registries provide income to the countries. Tuvalu said in its response to Berman's initial letter that its ship registry is an "essential part" of its income.

(Additional reporting by Rachelle Younglai, Editing by David Brunnstrom and Cynthia Osterman)