Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of shipping companies and vessels led by Iraqi-Kittitian businessman Waleed al-Samarra’i (al-Samarra’i) for smuggling Iranian oil disguised as Iraqi oil. This network operates primarily by covertly blending Iranian oil with Iraqi oil, which is then marketed intentionally as solely of Iraqi origin to avoid sanctions. This scheme has generated hundreds of millions of dollars in revenue for both the Iranian regime and al-Samarra’i himself. Waleed Khaled Hameed al-Samarra’i (al-Samarra’i), a citizen of both Iraq and St. Kitts & Nevis, is a United Arab Emirates (UAE)-based businessman who runs a network of companies managing vessels that have been involved in the sale of Iranian oil to international markets. This network operates primarily by covertly blending Iranian oil with Iraqi oil, which is then marketed intentionally as solely of Iraqi origin. Based on conservative estimates, al-Samarra’i’s network generates around $300 million of value to both Iran and its partners annually. Al-Samarra’i relies on his two UAE-based companies, Babylon Navigation DMCC (Babylon) and Galaxy Oil FZ LLC (Galaxy Oil), to manage his network’s operations. While Babylon handles the logistics and shipping aspects of al-Samarra’i’s operations, Galaxy Oil features as the main trader of al-Samarra’i’s energy products on the global market. To smuggle the Iranian-origin oil, al-Samarra’i uses a group of vessels operated by Babylon—the Liberia-flagged ADENA, LILIANA, CAMILLA, DELFINA, BIANCA, ROBERTA, ALEXANDRA, BELLAGIO, and PAOLA—to blend Iranian and Iraqi oil at sea, via ship-to-ship transfers in the Arabian Gulf, and in Iraqi ports. While Babylon manages and operates these vessels, al-Samarra’i relies on a number of Marshall Islands-based shell companies—Tryfo Navigation Inc. (Tryfo), Keely Shiptrade Limited (Keely), Odiar Management S.A. (Odiar), Panarea Marine S.A. (Panarea), and Topsail Shipholding Inc. (Topsail)—to serve as the registered owners of these vessels and likely further obfuscate the extent of al-Samarra’i’s control over them. To obscure their activity in smuggling Iranian oil, Al-Samarra’i’s vessels use ship-to-ship transfers with U.S.-sanctioned vessels publicly affiliated with Iran’s shadow fleet to distance themselves from direct interactions with the Iranian petroleum sector. Iran’s network of tankers includes both Iranian and foreign-owned vessels that are used to evade international sanctions by concealing oil shipments. Al-Samarra’i’s vessels also engage in other obfuscation techniques to hide their activities, such as unsafe ship-to-ship transfers at night, Automated Identification System (AIS) spoofing, and conspicuous gaps in AIS location reporting. Al-Samarra’i and Babylon are being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. Galaxy Oil is being designated pursuant to E.O. 13902 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, al-Samarra’i.
E.O. 13902 imposes sanctions with respect to any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, to operate in the construction, mining, manufacturing, and textiles sectors of the Iranian economy, and any additional sectors of the Iranian economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State. On October 8, 2020, the Secretary of the Treasury identified the financial sector of the Iranian economy for additional sanctions under E.O. 13902. Iranian and non-Iranian persons operating in these sectors could be subject to sanctions pursuant to E.O. 13902.
