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    UPDATE 2-Tanzania confirms it reflagged 36 Iranian ships, to deregister them

    * Tanzania had been accused of reflagging Iranian tankers

    * E.African country says was misled by Dubai-based agent

    * Iran hit by sanctions over its nuclear program

    DAR ES SALAAM, Aug 12 (Reuters) - Tanzania said a shipping

    agent based in Dubai had reflagged 36 Iranian oil tankers with

    the Tanzanian flag without the country's knowledge and approval.

    Tanzania said it was now in the process of de-registering

    the vessels after an investigation into the origin of the ships

    concluded they were originally from Iran.

    Tanzania launched an investigation last month over

    accusations that it had reflagged oil tankers from Iran and

    asked the United States and European Union to help it verify the

    origin of the tankers flying the east African country's flag.

    A report with the investigation's findings was discussed in

    the House of Representatives of Zanzibar, a semi-autonomous part

    of Tanzania late on Friday, and the minutes of that debate were

    seen by Reuters late on Saturday.

    Reflagging ships masks their ownership, which could make it

    easier for Iran to obtain insurance and financing for the

    cargoes, as well as find buyers for the shipments without

    attracting attention from the United States and European Union.

    The National Iranian Tanker Company (NITC) changed the names

    and flags of many of its oil tankers ahead of the EU ban, part

    of sweeping economic measures aimed at pressuring Tehran to end

    its nuclear program.

    That included swapping Maltese and Cypriot flags for Tuvalu

    and Tanzanian ones.

    The ships flying Tanzania's flag were re-flagged by

    Zanzibar, which has claimed it was misled by its Dubai-based

    agent, Philtex, and would end its contract with that firm.

    "The government has thoroughly investigated this issue and

    established that the Zanzibar Maritime Authority (ZMA) through

    our Dubai-based agent, Philtex, registered 36 Iranian crude oil

    tankers and containership vessels to fly the Tanzanian flag,"

    Zanzibar Vice President Seif Ali Iddi told the assembly.

    "The Zanzibar government is in the process of de-registering

    the ships and also terminating its agency contract with Philtex

    after establishing the truth that these (Iranian) ships are

    flying the Tanzanian flag."

    Howard Berman, the ranking member of the U.S. House

    Committee on Foreign Affairs, had accused Tanzania of reflagging

    at least six and possibly as many at 10 tankers, saying it was

    helping Iran evade U.S. and European Union sanctions aimed at

    pressuring Tehran to curb its nuclear program.

    He said Tanzania could face U.S. sanctions for the practice.

    Berman has also asked the small South Pacific island nation

    Tuvalu to stop reflagging Iranian oil tankers and warned its

    government of the risks of running afoul of U.S. sanctions.

    TANZANIA TO KEEP IRAN TIES

    The U.S. sanctions have kept Iran's major trading partners

    from buying Iranian crude. The European Union banned Iranian oil

    imports as well as the provision of insurance for vessels

    carrying Iranian oil from July 1.

    On July 4, Tanzania's neighbour Kenya cancelled an agreement

    to import 4 million tons of Iranian crude oil per year because

    of sanctions against Iran.

    Zanzibar's Iddi said Tanzania would act to de-register the

    ships in light of the threat of economic sanctions.

    He promised further investigations into how the registration

    of the ships was conducted. However, he said Tanzania's ties

    with Iran on other issues would remain intact.

    Tanzania has previously stated that it supports Iran's

    pursuit of a peaceful nuclear program.

    The United States has mounted an international campaign

    aimed at depriving Iran of oil revenue to pressure it to rein in

    its nuclear program, which Tehran maintains is solely for

    peaceful purposes but the West suspects is aimed at developing

    nuclear weapons.

    "The Zanzibar government will also conduct further

    investigations to establish how the registration of the ships

    was done in the first place," Iddi said.

    "Regardless of this incident, our relations with Iran will

    continue in other areas."