According to the U.S. both companies are used to transport proliferation-sensitive items intended for Iran’s ballistic missile and military programs.

In a press statement yesterday, U.S. Secretary of State Michael Pompeo said:

“On June 8, 2020, the State Department designated IRISL and IRISL’s Shanghai-based subsidiary, E-Sail Shipping Company Ltd., pursuant to Executive Order 13382 for their proliferation-related conduct. The State Department warned that any stakeholder who continued doing business with IRISL or E-Sail was at risk of sanctions.

“Since the June 2020 designation of IRISL and E-Sail, Reach Holding Group (Shanghai) Co. Ltd. and Reach Shipping Lines arranged for port berths for IRISL vessels at Chinese ports. Reach Shipping Lines knowingly sold, supplied, or transferred four large container vessels to IRISL’s subsidiary, HDASCO.

“Reach Holding Group (Shanghai) Company Ltd.; Reach Shipping Lines; Delight Shipping Co., Ltd.; Gracious Shipping Co. Ltd.; Noble Shipping Co. Ltd.; and Supreme Shipping Co. Ltd. are being designated pursuant to IFCA Section 1244(d)(1)(A) for having knowingly sold, supplied, or transferred to Iran significant goods or services used in connection with the shipping sector of Iran.

Eric Chen (Chen Guoping), CEO of Reach Holding Group (Shanghai) Company Ltd., and Daniel Y. He (He Yi), President of Reach Holding Group (Shanghai) Company Ltd., are also being sanctioned pursuant to Iran Sanctions Act Section 6(a)(11) as a part of this action. Delight Shipping Co., Ltd.; Gracious Shipping Co. Ltd.; Noble Shipping Co. Ltd.; and Supreme Shipping Co. Ltd. each knowingly sold, supplied, or transferred a large container vessel to Iran to be used in connection with the shipping sector of Iran.

“In addition to the foregoing activities, since the June 2020 designation of IRISL and E-Sail pursuant to E.O.13382, Reach Holding Group (Shanghai) Company Ltd. and its subsidiary, Reach Shipping Lines, have provided services to IRISL, E-Sail, and HDASCO to help these Iranian shipping entities evade the consequences of U.S. sanctions.

For instance, during this time, Reach Holding Group (Shanghai) Company Ltd. has also taken actions and performed certain services for IRISL and its subsidiaries specifically designed to shield Chinese entities from U.S. sanctions; likewise, Reach Shipping Lines has been involved in activities, services, and the provision of goods to IRISL and its subsidiaries intended to conceal IRISL and it subsidiaries’ activities from Chinese government, industry, and maritime stakeholders.

Additionally, Reach Holding Group (Shanghai) Company Ltd. has also worked on behalf of IRISL and its subsidiaries to conceal these Iranian entities activities in the PRC including by lying to Chinese companies about the roles of IRISL and its subsidiaries in shipments and by falsifying documents and engaging in other deceptive practices so that Chinese government, industry, and maritime stakeholders would not know about IRISL and its subsidiaries activities in the PRC.

“Today, we reiterate a warning to stakeholders worldwide: If you do business with IRISL, you risk U.S. sanctions.”