Exclusive: shipping records and leaked video show subsidiary of multinational Incitec Pivot reloaded cargo from Iran, which is subject to stringent US sanctions

This article is more than 1 year old

This article is more than 1 year old

An Australian-owned multinational is at the centre of a mysterious $15m shipment from Iran that threatens to breach strict US sanctions, the Guardian can reveal.

Shipping records, leaked video and internal documents show the movement of a significant haul of urea fertiliser out of Iran last month, through the Middle East and on to China.

The shipment was then reloaded onto a cargo ship being used by Quantum Fertiliser, a Hong Kong-based trading subsidiary of the ASX-listed multinational Incitec Pivot, a one-time contractor with the federal government and donor to the Labor party.

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The company said it was “misled about the origin of the product” and was urgently offloading the suspect cargo, while launching a wider review to “remove the risk of a repeat of this situation”.

Strict United States sanctions prohibiting business dealings with Iran, including by non-US entities, were revived last year, following the Trump administration’s abandonment of the Iran nuclear deal.

The far-reaching sanctions have prompted fears over even the most benign business interactions with Iran. Last month, two vessels carrying Iranian fertiliser to Brazil were left stranded for a month because the state-owned oil company Petrobras refused to refuel them for the return journey, fearing US retribution.

Donald J. Trump (@realDonaldTrump) The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!

Internal documents suggest Quantum knew the goods it was loading had just come from a cargo vessel named the CS Future.

The Guardian has separately established that the CS Future left Iran’s Bandar Abbas port on 1 July. Vessel inspection reports show it was carrying “urea in bulk”.

Publicly-available online vessel trackers also show the CS Future had just travelled through the Middle East.

The vessel arrived at Lianyungang, China, on 25 July, via Oman, and began unloading its cargo, valued at an estimated $10-$15m. The haul was then reloaded onto a second cargo ship, the Bulk Aquila.

Facebook Twitter Pinterest An internal email describing the process of transferring the cargo from the CS Future to a ship being used by Quantum. The CS Future had just arrived in China from Iran. Photograph: Supplied

An email sent to Quantum employees detailed the process.

“As per the agent all the cargo for the subject vessel is from another ship MV CS Future (she is also at Lianyungang discharging at the moment, up to the morning 12000MT were unloaded),” the email reads. “In order to speed up the cargo transit process (from MV CS Future to MV Bulk Aquila), kindly ask your supplier to ensure a continuous and sufficient truck flow, also deploy enough shore cranes for loading.”

Leaked video from the Lianyungang port shows the CS Future being unloaded, the fertiliser in transit and the Bulk Aquila being loaded. The Bulk Aquila has since departed Lianyungang for another Chinese port.

Incitec Pivot responded to questions by providing a statement from Quantum, its trading subsidiary.

Quantum said it was assured by its Chinese supplier that it was buying products of Chinese origin. It had since rejected the cargo and alerted authorities.

“Quantum was supplied with formal documentation which purported to verify the source of this products, but on checking this documentation Quantum was not satisfied as to the origin of this product,” a spokesman said.

“Quantum took immediate action to reject the product and require that it be offloaded, and replaced with Chinese product. Quantum was misled about the origin of the product.”

The spokesman said the contract with Quantum’s Chinese supplier stipulated the product must be of Chinese origin. The contract contained the company’s “customary stringent sanctions provisions”, the spokesman said.

He said Quantum began to question the origin of the cargo while it was being loaded in Lianyungang.

“To ensure full compliance with international trading requirements, Quantum has engaged with the relevant authorities to notify them that it has rejected a cargo of urea from China, on the basis that Quantum was not satisfied as to the origin of the product,” the spokesman said.

Facebook Twitter Pinterest A shipping survey report showing the origin of the CS Future cargo vessel as Bandar Abbas, Iran. The report also shows the vessel is carrying urea fertiliser in bulk. Photograph: Supplied

Quantum said on Friday the Bulk Aquila was at the second Chinese port, Yantai, unloading the cargo under the watch of independent inspectors. It said the ship travelled to Yantai at the direction of its Chinese supplier to make use of the port’s available storage.

The movement of urea fertiliser between Iran and China is common. But the broad sanctions have placed international companies in precarious positions.

Jarrett Blanc, a former US official who helped implement the Iran nuclear deal under the former president Barack Obama, said non-US entities now faced significant punishments for sanction breaches, depending on the circumstances.

Blanc, while not speaking directly on the Quantum case, said companies could be frozen out of dealings with the US government, US businesses and other non-US companies that want to avoid being sanctioned themselves.

“There are lots of enforcement possibilities depending on the specifics,” Blanc told Guardian Australia. “Generally, if the transaction has no link to a US person, the non-US actors can be threatened with ‘secondary sanctions’ – essentially, they can become a US sanctions target themselves.”

Amin Saikal, the director of the Australian National University’s centre for Arab and Islamic studies, said the US sanctions were far-reaching and “prohibit any foreign company to do business with Iran”.

“If a company trades with Iran, it would be liable to American penalty, especially if that company also has business dealings with the United States,” Saikal said.

Incitec has a clear sanctions policy that “strictly prohibits” involvement in any transaction contravening sanctions. The policy states Incitec will not work with any third party that breaches or seeks to subvert sanctions. The policy applies to subsidiaries that trade on its behalf.

“The policy provides that there must be appropriate due diligence in relation to third parties, transactions or activities that present a potential risk in relation to Sanctions Laws compliance. The policy sets out a process for conducting due diligence.

“The policy applies to all directors, officers and employees of Incitec Pivot and each subsidiary, partnership, venture and business association, including distributors and agents and other contractors that are effectively controlled by Incitec Pivot or act on its behalf (either directly or indirectly).”