Developing

Iran cargo ships operating in EU despite sanctions

* Malta says moving in direction of deflagging IRISL

* Iran facing growing sanctions pressure

* See SPECIAL REPORT-Iran's cat-and-mouse game on sanctions:

LONDON/VALETTA, Feb 15 (Reuters) - Tightening sanctions

aimed at pressuring Tehran to abandon its nuclear programme

threaten to drive Iran's flagship cargo shipping line out of

Europe, something past efforts have failed to accomplish, a

Reuters investigation shows.

Islamic Republic of Iran Shipping Lines (IRISL), which

carries an estimated one third of the country's dry bulk and

container seaborne trade, has faced European Union sanctions for

its alleged role in smuggling banned weapons, including measures

implemented on July 26, 2010.

Yet since then, 23 ships have visited 12 ports in the EU a

total of 149 times, according to analysis including vessel

movements and port calls for a Reuters special report into

Iranian shipping sanctions published on Wednesday. [PDF: http://link.reuters.com/daf66s

]

These include 96 visits to Malta, 14 to Antwerp, and 10 to

Rotterdam. Two EU countries also still provide what critics call

"flags of convenience" to the majority of the firm's fleet.

Malta flags 48 vessels and Cyprus 12, out of a total of 144

vessels identified by the United States and the EU as IRISL

vessels.

In interviews with Reuters, officials from both Malta and

Cyprus indicated they will soon begin to de-register all of

Iran's sanctioned fleet and review all contracts for shipping

services, effectively ousting them from Europe.

Under the EU sanctions, all IRISL assets were ordered frozen

and all commercial transactions banned, but an exemption does

allow some existing contracts to be honoured.

Malta's foreign minister Tonio Borg confirmed in an

interview that his country was "moving in the direction" of

deflagging all vessels. But he insisted other countries should

also act.

"We believe that all services to IRISL should be

prohibited," Borg told Reuters. "We are ready to make that

sacrifice, provided that all countries also make the sacrifice."

In Cyprus, officials suggested they would follow suit in

de-registering the fleet. A Cypriot official, speaking on

condition of anonymity, said the Department of Merchant Shipping

had already allowed international safety certificates to expire

on January 15, making it hard for any Cypriot-registered ships

to continue operations.

The Reuters investigation found that IRISL still continues

to play a complex cat-and-mouse game by frequently shifting the

official registered owners, flags, and even the names of vessels

in an attempt to conceal their connection to the firm.

John Dalby, a former oil tanker captain and chief executive

of Marine Risk Management, a global consultancy and maritime

security company, said the number of changes "says volumes about

the smoke and mirrors going on at IRISL".

"They are trying to mask ownership and mask tracking of the

specific whereabouts of various ships. By aiming to turn a

vessel into a ghost ship, they hope to conceal its ultimate

ownership and, secondarily, its movements," Dalby said.

In the 48 months before U.S. sanctions began in September

2008, IRISL made at least 345 changes in its fleet, including

ship names, the flags they operated under, operators, managers

and registered owners.

In the 40 months since those sanctions, there have been at

least 878 changes.

(Jonathan Saul reported from London and Stephen Grey from

Valletta; additional reporting by Phillip Baillie in London,

Himanshu Ojha in New York, and Michele Kambas in Nicosia;

editing by Jason Neely)