Liberty Commodities, part of the beleaguered Gupta Family Group Alliance, bought Iranian steel in 2017 and disguised the origin of the material when selling it on, documents obtained by Argus show.
Although Iranian steel was not subject to US sanctions at the time, in at least one documented case Liberty changed paperwork to show a cargo as originating in Oman, rather than Iran. This made it possible to obtain a letter of credit, according to a source at Liberty Commodities.
Wary of falling foul of changes in US sanctions rules, many international banks continued to decline to under-write Iranian business even after the temporary lifting of sanctions under the Obama administration's Joint Comprehensive Plan of Action in 2015. Although US sanctions originally applied only to Iran's oil and gas industry, major banks became increasingly cautious about involvement in any kind of trade with Iran from at least 2011 onwards. In 2017, President Donald Trump began to ratchet up the threat of sanctions against Iran. In the same year, Liberty deliberately altered some shipping documentation "for the [sic] banking purposes so that LCs (letters of credit) could be opened and also confirmed as many banks were not confirming Iranian origin LCs", the source told Argus.
The multiple documents obtained by Argus show that:
- On 25 January 2017 Dubai-registered Liberty Fe Trade DMCC bought 10,000t of 5sp commodity grade billet from Iranian mill Kish South Kaveh Steel Co (SKSCO) at $373/t fob. SKSCO invoiced Liberty on 19 February 2017 for a fractionally smaller quantity, 9,999.67t, based on a tolerance allowable under the sales contract.
- The cargo was loaded aboard the MV Balaban on 22 February 2017. A copy of the ship's Mate's Receipt, which proves goods have been loaded onto a vessel, stated the Balaban was carrying 9,999.28t of billet from Bandar Abbas, Iran, to Koh Sichang, Thailand.
- The Iran Chamber of Commerce, Industries, Mines and Agriculture provided a certificate of Iranian origin for 9,999.28t of billet from SKSCO on 26 February 2017.
- The vessel was insured for 110pc of the cif value of the cargo from Bandar Abbas to Koh Sichang.
But that:
- Liberty sold the cargo for $397/t to London-based UBG Commodities on 21 February 2017, issuing an invoice which listed not "Iran" but "Oman" as the "Country of Origin" for the steel, and the load port as "Sohar Port, Sultanate of Oman".
- UBG sold the 9,999.28t to a company called Metal One, in Thailand, and supplied a self-produced, stamped and signed certificate of origin dated 20 February 2017 — actually the day before UBG technically bought the cargo — giving the country of origin as "Sultanate of Oman", as well as a bill of lading showing the vessel sailing from Oman. The bill of lading is stamped and signed by a Dubai-based shipping company called Foxtrot Chartering. Foxtrot Chartering is run by one Taras Kosenko. Kosenko also appears in Liberty Commodities' organisation charts as the company's shipping manager, and a direct report of Paul Francis, Liberty Commodities' chief executive.
One major western bank — which investigated the transaction in response to questions submitted by Argus — said the MV Balaban disappeared from tracking systems for six days after setting sail from Oman for Thailand. Ship-tracking data used by Argus showed the Balaban was in Bandar Abbas on 13 February 2017.
UBG has been linked to GFG as a business with very close ties to both the founder Sanjeev Gupta and to Liberty. This is borne out by the documents and numerous email trails seen by Argus. In a 17 January 2017 email chain seen by Argus, Paul Francis said he was "Adding David, who will co-ordinate all of this as he represents UBG UK who will be the seller to Milcon [sic]". In the same trail, Liberty employee Chatri Anunrojwong, who is listed as Liberty Commodities' commercial head on the company's website, wrote: "We are going to use David [sic] company … to ship this [sic] Iranian billets out to all buyers." David Hulme, a director of UBG from 2015 to 2021, is included in the same email chain.
In another email in the chain, also dated 17 January 2017, Anunrojwong corrected the price of the cargo to $400.65/t — this same price was used in documentation submitted by UBG in obtaining a letter of credit for sales into Thailand. In the same email train, Liberty employees drew up a draft sales contract for a second UBG sale to Millcon Burapa, with that 35,000t cargo to be carried on the same vessel and same voyage as the Metal One cargo. Anunrojwong later altered the contract into two separate ones for 25,000t and 10,000t. Liberty said sales contract "UBGUK-11785" was allocated to the deal, and UBG used the same number for the sale of 9,000t to Millcon Burapa, with the origin of the goods again classed as from the Sultanate of Oman, shipping out of Sohar port. The price was again stated as $400.65/t cfr.
A GFG Alliance spokesperson said: "We take compliance with sanctions very seriously and have strict instructions in place to ensure we do not contravene relevant sanctions. Following a review of our records we are very confident that no sanctions were breached." The spokesperson declined to comment further.
