(Bloomberg) -- The Government of Gibraltar says European Union regulations don't allow it to seek a court order to seize a tanker which the U.S. accuses of breaching its sanctions by exporting Iranian oil.
The U.S. issued a warrant to seize the supertanker, which has been detained by the U.K. and Gibraltar since the beginning of July, on suspicion of hauling Iranian oil to Syria in violation of European sanctions, on Friday.
"The Central Authority's inability to seek the Orders requested is a result of the operation of European Union law and the differences in the sanctions regimes applicable to Iran in the E.U. and the U.S.," the Gibraltar government said in the statement. "The E.U. sanctions regime against Iran - which is applicable in Gibraltar - is much narrower than that applicable in the U.S."
A complaint unsealed in Washington stated that "Oil Tanker 'Grace 1,' all petroleum aboard it and $995,000 are subject to forfeiture," according to a Justice Department statement. The statement alleges a "scheme to unlawfully access the U.S. financial system to support illicit shipments" of oil from Iran to Syria in violation of U.S. sanctions, money laundering and terrorism statutes.
A new crew for Grace 1 is scheduled to arrive in Gibraltar on Sunday, Richard de la Rosa, managing director of the vessel's shipping agent Astralship, said by phone. Preparations are underway, he added, reiterating his company's intention for the vessel to set sail by Monday. Iran previously said the ship would head to a port in the Mediterranean.
The tanker bore the name Grace 1 and a Panamanian flag when it was detained on July 4. It has since been re-flagged to Iran and its name changed to Adrian Darya 1.
Iran's navy is ready to escort the supertanker if necessary, the semi-official Mehr news agency reported, citing a naval commander. "We have no intention of sending a flotilla to Gibraltar, but we are ready to do so to escort the Grace 1 back to Iran's territorial waters," the head of the army's naval division, Admiral Hossein Khanzadi, said on Sunday at a global maritime event in Tehran.
The vessel, which is currently anchored off the coast of Gibraltar, is at the center of a diplomatic spat between the U.K. and the Trump administration. The U.S. has threatened to impose sanctions on anyone dealing with the ship and expressed disappointment with Britain after a court in Gibraltar ruled the ship was free to sail on Thursday.
Ports, banks and anyone else who does business with the ship or its crew might be subject to penalties, two U.S. administration officials said. Iran's foreign minister said on Twitter that the ship's detention was unlawful.
While the cargo was originally bound for Syria, Iran has provided assurance that this is no longer the case, according to the Gibraltar government. "The evidence is clear and the facts speak louder than the self-serving political statements we are hearing today," according to the statement issued on Friday, which didn't specify the comments it was referring to.
The court's decision Thursday to release the Grace 1 was a missed opportunity and the Trump administration hopes that the U.K. government and authorities in Gibraltar will reconsider, according to the U.S. officials, who asked not to be identified discussing private deliberations. They said the court order rewards Iranian terrorism and Tehran will interpret the action as appeasement.
The American officials said the U.K. should think of the tanker issue in terms of the broader relationship with the U.S., particularly as U.K. Prime Minister Boris Johnson's government presses forward with departing the European Union and seeks a free-trade agreement with the U.S. While the people wouldn't say the release threatens prospects for that deal, they added that the U.K. should ask if it wants to do business with the U.S. or Iran.
The seizure of the tanker has heightened tension between Iran and the West, in a relation already under strain since the U.S. reimposed sanctions last year. A series of vessel attacks and seizures have threatened shipping in the Strait of Hormuz, the world's most critical chokepoint for oil shipments.
Following the Grace 1's detention, Iran seized a British-flagged vessel, the Stena Impero, which it continues to hold. The decision to release the tanker is unrelated to developments with the ship now known as Adrian Darya 1 and state officials must determine its fate, Alireza Tangsiri, head of the Islamic Revolutionary Guard Corps' naval division, said on Sunday, according to Mehr.
The U.K. Foreign and Commonwealth Office cautioned that there was no connection between Gibraltar's enforcement of sanctions and Iran's activities at the mouth of the Persian Gulf.
"There is no comparison or linkage between Iran's unacceptable and illegal seizure of, and attacks on, commercial shipping vessels in the Strait of Hormuz and the enforcement of EU Syria sanctions by the Government of Gibraltar," it said in an emailed statement Thursday. "Freedom of navigation for commercial shipping must be respected and international law upheld."
--With assistance from Christopher Elser, Alex Morales, John Deane, Arsalan Shahla, Golnar Motevalli, Jonathan Browning, Alex Longley and Nick Wadhams.
To contact the reporters on this story: Charles Penty in Madrid at firstname.lastname@example.org;Verity Ratcliffe in Dubai at email@example.com
To contact the editors responsible for this story: Nayla Razzouk at firstname.lastname@example.org, Helen Robertson
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