US allows recycling of Iran-sanctioned ships, GMS granted license

GMS, a major cash buyer in the ship recycling market, announced it has been granted a licence by the United States Treasury’s Office of Foreign Assets Control (OFAC) to purchase and recycle vessels subject to Iran-related sanctions. The company described the approval as the first authorised channel for taking sanctioned tonnage out of circulation through regulated recycling.

According to company statements and sector reports, the licence covers four container ships identified as Yogi, Timon, Rantanplan and Bigli, and follows an extensive regulatory review lasting several months. GMS said the approvals involved coordination with the Treasury and the State Department, and that it underwent enhanced due diligence and compliance assessments before the licence was issued.

Industry reporting, however, underlines operational hurdles: while the licence authorises purchase and recycling, the named vessels have not yet been delivered to recycling yards. Lloyd’s List coverage notes delays tied to the continued formal sanction status of some vessels and additional compliance checks where Iranian involvement is directly alleged, illustrating that a licence is only one step in a complex unwind process.

For markets and the wider maritime sector the licence could be significant. Proponents argue a legal, transparent disposal route would reduce the so-called shadow or dark fleet that has carried embargoed cargoes, lowering environmental and navigational risks and bringing formerly opaque transactions into regulated financial channels. Conversely, authorised recycling will require strict adherence to environmental and hazard-management standards at recipient yards, potentially increasing compliance costs and operational complexity.

Analysts say the OFAC decision may set a precedent for similar licences but caution that each case will be assessed on its merits and legal specifics. GMS had previously engaged with US authorities seeking such authorisation, and stakeholders will be watching how quickly licensed disposals proceed, whether other buyers seek similar approvals, and how regulators balance sanctions enforcement with practical removal of risky tonnage from international waters.