Revealed: How fake papers were used to smuggle a £20m oil shipment for Iran’s IRGC

Labour has pledged to blacklist the organisation if it comes to power in July.

The documents include two parallel sets of papers relating to a Victor 1 shipment in April 2019. One is genuine, the other fake.

The genuine documents show that the oil was supplied by the IRGC-controlled National Iranian Oil Corporation (NIOC) and loaded at Bandar Abbas in Iran. The fake documents were fabricated to suggest it came from Basra in Iraq, so allowing it to be sold on to buyers who would assume it really was Iraqi.

The falsified Bill of Lading marked 'Basra' in Iraq[Missing Credit]

Both real and fake papers were signed by Victor 1’s captain who, along with his crew, was employed by Delfi, a firm controlled by Gialozoglou. The papers cover exactly the same period in April 2019, though Bandar Abbas and Basra are about 1,000 miles apart.

The authentic, Iran-issued Bill of Lading[Missing Credit]

In theory, the sanctions’ terms are stringent. They not only grant the US government powers to freeze sanctioned entities’ assets and prevent them from doing business with American firms or accessing US banks anywhere in the world, but also to impose “secondary” sanctions on anyone who does business with sanctioned entities or deals in Iranian oil.

Self-evidently, a global shipping company denied all access to American banks, ports and customers would find it difficult to operate.

However, neither Gialozoglou nor his family’s firms have ever been subject to such measures, despite the fact that in August 2020, 14 months after the Victor 1 picked up its cargo from Bandar Abbas, the US Justice Department seized almost 1.2 million barrels of Iranian oil worth some £80 million from another four tankers owned by Gialozoglou’s company International Marine Services, the Bella, the Bering, the Pandi and the Luna.

US officials described this at the time as “the successful disruption of a multi-million dollar fuel shipment by the IRGC, a designated foreign terrorist organisation”. Gialozoglou said he had believed the cargoes were “legitimate”, and that being caught in breach of US sanctions rules was a “nightmare”.

The documents seen by the JC reveal that the ships whose cargoes were confiscated in 2020 and the Victor 1 had two things in common. The first was that throughout the time they were in Iranian waters, their Automatic Identification System (AIS) transponders, which are supposed to enable a ship’s movements to be traced at all times, were switched off.

In the case of the Victor 1, AIS records kept by Lloyds in London show that before its transponder went dark, it was last seen in Fujairah, one of the United Arab Emirates, at 2am on 30 March 2019. The records then contain no sign of it until 6pm on 6 April when, having returned from Bandar Abbas, it docked at the Mubarek oil terminal in Sharjah, where its cargo was discharged.

The Victor 1 – then with a different name – seen outside Falmouth in 2012[Missing Credit]

The second common feature was alluded to in an affidavit by Homeland Security Special Agent Thomas Tamsi, which was filed with the US court that authorised the seizure of the four later Gialozoglou cargoes in 2020.

Ever since the sanctions were imposed, Tamsi said, the IRGC had been “moving oil through a sanctioned shipping network, which features dozens of ship managers, vessels and facilitators”.

Key to this process was the replacement of “true bills of lading [the cargo list]” showing that oil had come from Iran with “fraudulent documents purportedly from the Iraqi State Organisation for Marketing of Oil”.

This, he said, had happened with the four seized cargoes. The documents seen by the JC confirm the same was true for the oil carried on the Victor 1.

Among the documents the captain signed is the NIOC Bill of Lading, the paper that records the details of a vessel’s cargo, which records that 298,631 barrels of oil weighing 46,000 tonnes had been loaded in Bandar Abbas over a three-day period that ended on 2 April, 2019. Another document concerning the weight of the oil loaded in Iran was copied to the captain’s employer, Delfi, suggesting its staff must always have known the ship was to carry Iranian oil.

Other genuine documents include the NIOC Quality and Quantity Certificate, the oil’s Certificate of Origin, the cargo manifest and a timelog, signed and date stamped by both the NIOC and the captain, stating that the vessel arrived in Bandar Abbas at 9am on 30 March and sailed again on 2 April.

The fabricated papers are almost a mirror image of their genuine counterparts. They also include a timelog, a certificate of origin, a manifest and a bill of lading, all purporting to show that at the beginning of April 2019, the Victor 1 was not in Bandar Abbas but Basra, being loaded with the exact same quantity of Iraqi, as opposed to Iranian, fuel oil. Further documents show there was at least one more Victor 1 shipment of oil from Iran, which took place in September 2019.

Claire Jungman, a sanctions expert at the US-based campaign group United Against a Nuclear Iran, told the JC: “The system laid bare by the parallel documents is an extremely common tactic. We see Iranian oil routinely disguised as Iraqi in order to evade the sanctions.”

She said that since the October 7 terrorist attack on Israel by the Iranian proxy Hamas, the Biden administration had begun to show signs of being willing to take stronger action, because it had “woken up to the fact that this is how Iran funds terror”.

This year the US has impounded at least 20 Iranian oil cargo ships. But Jungman said that it had largely ignored the problem in previous years: “If it had enforced sanctions properly from the beginning, there wouldn’t be so much work to do now.”

When it carried the Iranian oil, the Victor 1 had been chartered from Gialozoglou by Ceto Shipping, which is based in the UAE. Unlike Gialozoglou, Ceto’s Iranian owner has been sanctioned by America.

After the second shipment, Ceto Shipping and Delfi fell into a commercial dispute, and are currently suing each other in the High Court in London.

Documents filed in the case by Gialozoglou’s solicitor, John Hicks, state that the captain and crew of the Victor 1 at all times remained “agents and servants” of Delfi, not Ceto, and that they were only required to follow Ceto’s orders if they were lawful. He also has acknowledged that carrying Iranian oil would breach US sanctions.

Ceto has filed a document claiming that Gialozoglou was always aware that his vessel was handling Iranian oil as were the captain and crew that his firm employed. He had, Ceto claims, personally demanded a $1 million bonus for allowing the sanction-busting shipment to take place. He and his lawyers deny this.

Rich Goldberg, a senior adviser at the US think tank the Foundation for the Defense of Democracies (FDD), who served in the White House as the National Security Council’s Director for Countering Iranian Weapons of Mass destruction, told the JC that the failure to penalise Gialozoglou was evidence that sanctions had not been properly enforced. “It is absolutely possible to clamp down on Iranian oil shipments, which are the regime’s lifeblood, and deterring such shipments should be a high priority,” he said.

“Rigorous sanctions enforcement would dramatically reduce the IRGC revenues that it uses to fund terrorist operations. We should be doing this far more effectively.”

The consequences of the illicit trade in Iranian oil were also spelt out in the 2020 affidavit by Special Agent Tamsi.

It had, he said, permitted the IRGC to fund “its full range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad”.

By demonstrating exactly how the origin of such shipments is routinely concealed, the documents provide a window into a system that has seen Iran’s terror-linked economy flourish despite the sanctions.

The Trump administration re-imposed sanctions on Iran in 2018, when it pulled out of the deal agreed by President Obama under which Iran was allowed to access global markets in return for curbing its nuclear weapons programme.

But since President Biden took office, the US has pursued a policy of accommodation towards Iran, turning a blind eye to sanctions enforcement.

According to the FDD’s Iranian economy expert Saeed Ghasseminejad, Iran is currently exporting 1.82 million barrels of oil per day – a 28 per cent increase on 2023.

“Increased oil exports enhance Tehran’s currency reserves and enable it to support its military industry and terrorist proxies,” he wrote in a report last month. “Since President Joe Biden assumed office, total Iranian oil exports have exceeded $100 billion.

“Had Tehran’s average daily export volume remained the same as it was while Donald Trump’s maximum pressure policy was in effect from May 2019 to January 2021, the regime would have had $40 billion less to spend on ballistic missiles and proxy groups.”

Iran’s biggest customer is currently China. Other purchasers buy rebranded Iranian oil from suppliers in the Gulf, which are mainly located in the United Arab Emirates. Analysts say it is possible that some of this fuel ends up in British petrol pumps.

US Attorney-General Merrick Garland underlined the threat this illicit trade poses in February, saying that Iran “utilises the proceeds of its black-market oil sales to fund its criminal activities, including its support for Hamas, Hezbollah, and other Iranian-aligned terrorist groups”. His deputy, Lisa Monaco, added: “While the IRGC and its Quds Force are the regime’s terrorist strongarms, oil is its lifeblood.”

The captain was approached for comment. Hicks told the JC that his client Gialozoglu could say nothing because of the pending court case, claiming that to do so would be “quite improper”.​