Tanzania has started to follow up an accusation by a United States congressman contained in a letter sent to President Jakaya Kikwete on 29 June that up to 10 Iranian oil tankers had been re-registered in Tanzania to evade sanctions imposed by the US and EU.

Foreign Minister Bernard Membe told reporters: "If we confirm that there are Iranian ships flying Tanzania's flag, we are going to obliterate the registration."

Membe has asked the US and EU to support the investigations after they tightened sanctions on Iran, which relies heavily on oil exports, over concerns about its nuclear programme. The Iranian embassy and a shipping agent in Dubai have given assurances that no Iranian ships have been re-flagged, according to the minister.

Howard Berman, who chairs the powerful House of Representatives committee on foreign affairs, told Kikwete: "If Tanzania were to allow Iranian vessels to remain under Tanzanian registry, we in the Congress would have no choice but to consider whether to continue the range of bilateral US programs with Tanzania."

Significance: The use of flags of convenience is common for legitimate trade, although controversial, but there is growing evidence that they are being used to hide the origins of vessels and their cargo. In the case of Iran, though, the US in particular is determined to stamp this out, and put pressure on other countries to co-operate, with the sanctions being a key prop of its long-running campaign to force Iran into compliance over its nuclear programme. Tanzania's neighbour Kenya has already bowed to international pressure this week by cancelling a deal to import four million tonnes of Iranian crude oil per year (seeIran - Kenya: 5 July 2012:). Over this much lesser issue of reflagging, it is in Tanzania's best interests to comply as soon as possible because there is little for the country to gain from conniving with Iran. As such, Iran's travails over exporting its oil to foreign markets look set to worsen.

Copyright 2012 World Markets Research Limited. All Rights Reserved.

(Originally published July 6, 2012, in Global Insight.)