Iranian oil tanker Grace 1 sits anchored awaiting a court ruling on whether it can be freed after it was seized in July by British Royal Marines off the coast of the British Mediterranean territory, in the Strait of Gibraltar, southern Spain. Reuters
Iranian oil tanker Grace 1 sits anchored awaiting a court ruling on whether it can be freed after it was seized in July by British Royal Marines off the coast of the British Mediterranean territory, in the Strait of Gibraltar, southern Spain. Reuters
Iranian oil tanker Grace 1 sits anchored awaiting a court ruling on whether it can be freed after it was seized in July by British Royal Marines off the coast of the British Mediterranean territory, in the Strait of Gibraltar, southern Spain. Reuters
Iranian oil tanker Grace 1 sits anchored awaiting a court ruling on whether it can be freed after it was seized in July by British Royal Marines off the coast of the British Mediterranean territory, i

US issues warrant to seize Iranian supertanker Grace 1 as it prepares to sail


Nicky Harley
  • English
  • Arabic

The US Justice Department has made a last-ditch attempt to block the release of the Iranian supertanker Grace 1 just a day after Gibraltar ruled the detained vessel could be released.

It comes after a six-week international standoff appeared to have come to an end as a judge in Gibraltar ordered its release.

But on Friday night, the US issued the warrant whilst the vessel, which was being investigated for allegedly delivering oil to Syria in breach of EU sanctions, was still anchored off the coast of Gibraltar.

Earlier on Friday, Iranian officials had said it was due to set sail.

According to tracking data, the ship briefly changed its status on Saturday from “at anchor” to “underway” before reverting to “at anchor”.

The head of the company sorting paperwork and procuring for the Grace 1 oil tanker in the British overseas territory said the vessel could be sailing away in the next “24 to 48 hours,” once new crews dispatched to the territory take over command of the ship.

"The vessel is ongoing some logistical changes and requirements that have delayed the departure," Astralship managing director Richard De la Rosa told The Associated Press.

The tanker had first been seized by British marines on July 4 sparking a diplomatic crisis between London and Tehran.

  • Supertanker Grace 1 off the coast of Gibraltar. AFP
    Supertanker Grace 1 off the coast of Gibraltar. AFP
  • Supertanker Grace 1 off the coast of Gibraltar. AFP
    Supertanker Grace 1 off the coast of Gibraltar. AFP
  • A ship approaches supertanker Grace 1 off the coast of Gibraltar. AFP
    A ship approaches supertanker Grace 1 off the coast of Gibraltar. AFP
  • A British Police ship patrols near supertanker Grace 1 off the coast of Gibraltar. AFP
    A British Police ship patrols near supertanker Grace 1 off the coast of Gibraltar. AFP
  • Supertanker Grace 1 off the coast of Gibraltar. AFP
    Supertanker Grace 1 off the coast of Gibraltar. AFP
  • A ship approaches supertanker Grace 1 off the coast of Gibraltar. AFP
    A ship approaches supertanker Grace 1 off the coast of Gibraltar. AFP
  • A British Royal Navy ship patrols near supertanker Grace 1. AFP
    A British Royal Navy ship patrols near supertanker Grace 1. AFP
  • Crew members walk down a ladder on board supertanker Grace 1 off the coast of Gibraltar. AFP
    Crew members walk down a ladder on board supertanker Grace 1 off the coast of Gibraltar. AFP
  • Crew members walk on board supertanker Grace 1 off the coast of Gibraltar. AFP
    Crew members walk on board supertanker Grace 1 off the coast of Gibraltar. AFP

The deadline for its seizure was due to end on Thursday and a bid by the US to further detain it failed.

Then the US Justice Department issued a warrant for its detention accusing it of being part of "a scheme to unlawfully access the US financial system to support illicit shipments to Syria from Iran by the Islamic Revolutionary Guard Corps (IRGC), a designated foreign terrorist organization," the ministry said.

The warrant says the vessel, all the oil aboard and $995,000 are subject to forfeiture based on violations of the International Emergency Economic Powers Act (IEEPA), and bank fraud, money laundering, and terrorism forfeiture statutes.

The Grace 1 was due to be renamed and switch to the Iranian flag for its onward journey – after Panama removed it from its international boat registry listing – the deputy head of Iran's Ports and Maritime Organisation, Jalil Eslami, told Iranian state television Friday.

But it is believed the ship was awaiting the arrival of a new crew before leaving Gibraltar.

"At the owner's request, the Grace 1 will depart for the Mediterranean after being reflagged under the Islamic Republic of Iran's flag and renamed as Adrian Darya for the voyage," Mr Eslami said, giving further details of the ship's departure.

"The ship was of Russian origin and Panama-flagged and is carrying two million barrels of Iranian oil," he added.

Speaking to the BBC, Gibraltar's First Minister Fabian Picardo said the ship could depart Gibraltar when it's ready.

"She is able to leave as soon as she organises the logistics necessary in order to sail a ship of that size," Mr Picardo said referring to Grace 1.

However, the head of Gibraltar's government added that the ship could still be obstructed in its departure if a US legal bid to stop it succeeds, Reuters reported.

"It could go back to the court absolutely," Mr Picardo said of the US appeal to Gibraltar’s supreme court.

Officials in Gibraltar and Britain have declined to comment on the status of the US appeal.

United States secretary of state Mike Pompeo tweeted on Thursday to warn that mariners aboard the ship could be barred from entering the United States if they continue to crew the tanker.

Mr Pompeo wrote in the tweet that assisting transportation of the oil was “#NotWorthIt”.

At the same time, the captain in charge of the tanker has indicated he wishes to relinquish command of the vessel.

His lawyer has also said repairs are needed on board Grace 1 and this could prevent its departure, the Associated Press reported.

Mixed messages have come from Iran and Gibraltar as to the terms for the release of Grace 1.

In a statement by the government of Gibraltar on Thursday, Mr Picardo said the release had been granted on the basis of written assurances from Tehran that the ship would not be destined for an entity subject to European Union sanctions.

The tanker had originally been stopped on the grounds it was carrying its cargo of crude oil to Baniyas Oil Refinery in Syria.

However, Tehran has said no such guarantees were made and accused Gibraltar of trying to save face.

"Iran has given no assurances over the Grace 1 not going to Syria to secure its release," the state broadcaster's youth website quoted foreign ministry spokesman Abbas Mousavi as saying on Friday.

"The tanker's destination was not Syria ... and even if it was, it did not concern anyone else," he added.

The crisis over Grace 1 has played out against a backdrop of deteriorating relations between Iran, the United States and its Arab allies.

In May 2018 the US withdrew from the Iran nuclear deal, delivering on promises by President Donald Trump to tear up the 2015 agreement that lifted economic sanctions on Tehran in exchange for it committing to give up its nuclear weapons programme.

Mr Trump said repeatedly on the campaign trail and in office that Iran had not stuck to the spirit of the deal as it expanded its sphere of influence and played a destabilising role across the region, backing paramilitary groups in Yemen, Iraq and Syria.

Britain's uneasy diplomatic position between the US and Europe, which has tried to salvage the nuclear deal, over Iran was brought into sharp focus when Iran seized the British-flagged Stena Impero on July 19 in the Strait of Hormuz, 15 days after Grace 1 was boarded by the British off Gibraltar.

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Dir: Shashanka Ghosh
Starring: Kareena Kapoo-Khan, Sonam Kapoor, Swara Bhaskar and Shikha Talsania ​​​​​​​
Verdict: 4 Stars

Avatar: Fire and Ash

Director: James Cameron

Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana

Rating: 4.5/5

The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
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UAE currency: the story behind the money in your pockets
LA LIGA FIXTURES

Friday Celta Vigo v Villarreal (midnight kick-off UAE)

Saturday Sevilla v Real Sociedad (4pm), Atletico Madrid v Athletic Bilbao (7.15pm), Granada v Barcelona (9.30pm), Osasuna v Real Madrid (midnight)

Sunday Levante v Eibar (4pm), Cadiz v Alaves (7.15pm), Elche v Getafe (9.30pm), Real Valladolid v Valencia (midnight)

Monday Huesca v Real Betis (midnight)

The currency conundrum

Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”

Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.

This is a race to the bottom, and everybody wants to be a winner.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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UAE currency: the story behind the money in your pockets