Efforts to determine just what happened in the 4 August detonation at the port of Beirut are going to take quite a while. There’s a lot to sort out.
And although some commentators are downplaying the significance of how the shipment of ammonium nitrate (AN) got to Beirut in the first place, in November 2013, the point remains a key factor in figuring out why it was left sitting at the port for years. That’s especially the case in light of the network of tunnels being uncovered by investigators under the warehouse where the material was stored.
“Subterranean chambers?” ? pic.twitter.com/bzgG2U4I34
— Alireza Nader علیرضا نادر (@AlirezaNader) August 9, 2020
Will this presidential election be the most important in American history?
The tunnels indicate the possibility (indeed, the probability) that the AN was left ill-secured in a warehouse at the port so that it would be easily accessible for people who wanted to move it – and other items – through the tunnels.
The obvious “people” would be Hezbollah operatives. Even aside from the raft of reporting that Hezbollah has long stored weapons and other paramilitary/dual-use materials at the port, there’s the fact that there is no one else in Lebanon who could get away with using the port to store ammonium nitrate, without Hezbollah knowing about it.
A family connection of Hezbollah’s Nasrallah clan operates the port of Beirut (link above). If Hezbollah wanted the AN to be somewhere else, then no matter whose it was, it would have been moved a long time ago.
If the AN sat at the port for seven years, it’s because Hezbollah knew it was there, and Hezbollah wanted it there.
That must obviously be true, given what we know about Hezbollah’s levers of control in Lebanon – even apart from things like Hassan Nasrallah’s recent threat to attack enemies (e.g., Israel) with something that sounds very much like an ammonium nitrate bomb.
We don’t need the specific threat to be sure of the conditions under which Hezbollah has held southern Lebanon in its grip. Any huge consignment of AN sitting around at the port of Beirut for seven years was there with Hezbollah’s knowledge and complicity.
That still leaves the question of why it actually came to Beirut in 2013, and what purpose Hezbollah had for leaving it at the port, as opposed to moving it elsewhere. We won’t find conclusive answers to those questions immediately. But some peculiar features of the 2013 shipment need to be taken into account in any attempt to answer them.
A shady transaction from start to finish
The most important feature is a general one, which applies to every facet of the transaction. Simply put, the whole thing looks illicit, involving intermediaries and transport assets that had little paperwork or history at the time, and now have evaporated into the ether.
The transport ship, M/V Rhosus, had tangled ownership, as is often the case with ships that charter for cargo independently. The ship was in poor condition, and during the voyage from Batumi, Georgia, where the AN consignment was loaded, the ship stopped in Turkey to switch masters (captains). This was variously reported as due to the original master not being paid, or the owner wanting to complete the transaction with crewmembers who would keep silent (implicitly to violate rules), or both.
There were, indeed, pay problems for the crew, as well as provisioning problems for the ship. Before continuing to Beirut, Rhosus spent four weeks in Athens (presumably Piraeus) with the AN onboard, unable to complete the purchase of stores due to lack of funds.
On paper, the original destination was supposed to be Mozambique, but initially no one in Mozambique acknowledged having ordered or even known about the AN shipment. Reuters later tracked down a response from the purported customer, Fábrica de Explosivos Moçambique (FEM), acknowledging the order, but stating that FEM never owned the cargo because the shipment was contracted as payable on delivery. FEM’s spokesman said the AN was ordered through a Ukraine-based trading firm, Savaro Ltd.
We’ll revisit those aspects of the story momentarily.
The master who came aboard in Turkey, Boris Prokoshev, later told officials and media that he had been ordered to put in to Beirut instead of continuing to Mozambique after Athens, an order that appears to have come from the ship’s owner in Cyprus. The purpose in Beirut was reportedly to onload some industrial equipment for delivery (to an unspecified recipient), and thus earn an additional commission.
Clearly, this whole episode was not on the up-and-up. Compounding the appearance of skullduggery was Rhosus’s history immediately prior to the trip from Batumi. Rhosus was supposedly owned in 2012 by a Bulgarian company, Interfleet Ship Management, with the ownership being transferred to a Russian-owned company in Cyprus, Teto Shipping, between May and August 2012. (This report has the purchase being made in May 2012.) Teto Shipping is universally described as being incorporated in the Marshall Islands, a haven for shell companies. It is no longer in operation, although the owner, Igor Grechushkin, still lives with his family in Limassol.
The problem with the Interfleet Ship Management story is that the proprietor, Nikolay Hristov, claims that although he registered the company in Bulgaria, he never used it for anything, and didn’t own Rhosus. The Bulgarian media’s reporting on this has pointed out that it’s not uncommon for third parties to take advantage of such paper companies to provide ships with fake documentation, even without the registered proprietor’s knowledge.
And, in fact, that’s not uncommon. The Bulgarian reporting is correct about that. If we go by Mr. Hristov’s statement, he would also have been the unwitting operator, through his company Interfleet Ship Management, of another ship, the M/V Sakhalin, which was flagged in Belize, owned by a company named Seaforce Marine Ltd., and sold for scrap in 2012.
Who would want to falsely connect Rhosus with Interfleet is the question. We could accept that Hristov, the registered owner of Interfleet, had no knowledge of his company being used this way – or we could suspect that he did own Rhosus under shady circumstances. Either way, the emphasis is on “shady.”
Interfleet Ship Management was dissolved in 2015. Like Teto Shipping – and Rhosus, which sank in the port of Beirut in 2015 – it is no longer a live factor.
A nitrates seller under a Russian gun
But one element of the story that is a live factor is the seller of the ammonium nitrate, the Georgian company Rustavi Azot. Of all the entities in the drama, Rustavi Azot is the one with the most promising profile, because it’s a real company with a long history, going back to the late-1940s Soviet era, and it continues operations through the present day.
The interesting aspect of this, however, is that in 2013, Rustavi Azot was verging on bankruptcy and had been for some time, after a very disadvantageous buyout by Russian investors (the Gazprom-linked trading firm ITERA) in the period 2003-2005. (See the article here, which suggests Rustavi Azot’s previous owner made out like a bandit in the sale to ITERA, and the Kasradze paper cited below for more on the disadvantage this imposed on Rustavi Azot.)
Rustavi Azot did go bankrupt in 2016, and was recapitalized with help from the European Union. The Rustavi Azot in operation today has the same name and many long-time employees from the pre-EU period, but is no longer under some of the pressures that came with being subject to Russian vetoes in the nitrates market.
The Russian vetoes in question had to do with whom Rustavi Azot was allowed to sell its products to. Another way of putting it would be whom Rustavi Azot was constrained to sell its products to. For many years, even after the break-up of the Soviet Union, it was Russian brokers who determined that.
There is compelling information available that effective Russian control was in place at the time of the 2013 shipment. And the same information shows that it was significantly out of pattern for a shipment from Rustavi Azot to be contracted by a trading firm in Ukraine; i.e., the Savaro Ltd. Company cited by Mozambiquan customer FEM.
In 2016, a former employee of Rustavi Azot, Giorgi Kasradze, posted a monograph on the topic of how Russia controlled the sales opportunities of his one-time employer. Kasradze’s history is of special interest: it’s possible to trace some activity that appears related to his tale, because the activity happened in the United States. (Note: Kasradze’s name appears on the monograph PDF, second link above, as Lasha Kasradze, but the introductory page with the abstract gives the name as Giorgi Kasradze, which applies to the suggested citation.)
Kasradze, in fact, appears to be the agent who set up a subsidiary of Rustavi Azot in Florida in 2010 (you may need to open the link in an incognito window). In his paper, he describes attempting – apparently during the ensuing period – to generate sales for the Georgian parent company independently of Russian control.
One of the features of Russian control was a mandate for customers to pay for the goods in advance. Keep in mind that Rustavi Azot was controlled during this period by its debt to Russian investors. Kasradze goes into some detail about the situation, describing how it was an obstacle to drumming up business outside the circle of buyers brokered by Russia. Few customers were interested in dealing with Rustavi Azot independently on the financing conditions mandated by the company’s primitive infrastructure and position with Russian creditors. See Kasradze on p. 6:
[T]he factory’s management is limited to only selling the product on per order bases. That is, a potential buyer must pre-pay for the product (ammonium nitrate fertilizer AN) in order for the management to directly pay workers to prepare specific tonnage of fertilizer for a client. This makes the factory uncompetitive for Western buyers.
That aspect of the order from Mozambique thus stands out in strong relief; i.e., if Rustavi Azot was able to prepare an order and ship payable on delivery in 2013, when it was on the brink of bankruptcy with its Russian investors.
The specifics of Kasradze’s story don’t point a smoking gun at the 2013 consignment that ended up in Beirut. But what they do is reveal names and patterns that should drive investigators to look further into the Russian connection. One of the names is a Russian company called Dreymoor. Dreymoor’s headquarters is in Singapore, where it operates as Dreymoor Fertilizers Overseas Pte. Ltd. It brokers the sale of nitrates around the world, with subsidiaries in a number of countries. Dreymoor is Rustavi Azot’s principal intermediary for sales outside of Georgia.
Curiously, Dreymoor opened a U.S. subsidiary in Tennessee in June of 2013.
It appears that the U.S. subsidiary of Rustavi Azot, honchoed by Mr. Kasradze, had already been dissolved at that point after an unsatisfying interlude in 2010-2011. But Dreymoor America LLC quickly became one of parent company Rustavi Azot’s top two customers, a relationship that appeared to continue after the reorganization of Rustavi Azot and the injection of European capital following the 2016 bankruptcy.
A suitably unique third-party confirmation of the Russian gun at work
The involvement of U.S. subsidiaries is interesting in its own right, but the basic point to take away is that Rustavi Azot couldn’t sell its goods abroad without Russia’s say-so. This condition was confirmed, along with Dreymoor’s specific role in it, in the record of an anti-dumping investigation performed by India in 2016.
Rustavi Azot and Dreymoor were both named as subjects of the investigation, and both responded to inquiries from the Indian government. Tellingly, one of the findings of the investigation – number (xxi) on p. 21 – is the following:
Rustavi Azot does not sell Ammonium Nitrate to India directly and have an agreement with Dreymoor that further sells to other countries. Rustavi is not a party to the commercial negotiations between Dreymoor and its buyers.
The injury investigation period (for the alleged dumping) encompassed the years 2012 to 2016, as stipulated in item (xvii) on p. 4. Notice that item (xxxii) on p. 54 confirms that Rustavi Azot was in a bankruptcy proceeding at the time of the Indian anti-dumping investigation.
The Indian finding about Dreymoor’s relationship to Rustavi Azot comports with the limited export-import data available for the firms online. Based on that limited information, Dreymoor appears to have been the exclusive broker of Rustavi Azot’s foreign sales prior to 2017.
That would make the 2013 sale through Savaro Ltd. to Mozambique a decidedly non-routine event. Note that besides being hard to track down in 2020, as reported by Reuters, Savaro Ltd.’s Ukraine presence appears to have been in Dnipropetrovsk; in other words, eastern Ukraine, where ethnic Russians are dominant.
The picture that emerges is of the Georgian company being mired in debt to its Russian “investors” from the 2005 buyout, and trapped between Russian rivals and Russian middlemen, able to sell only where Russian firms allowed it to.
So many unusual features of this international shipping adventure
So in pondering the 2013 shipment of ammonium nitrate, we must consider the likelihood that wherever it was actually bound – probably, I’m guessing, not Mozambique – it was actually arranged by Russians.
That would comport with the rest of the transaction’s shady character. It would also fit with the reporting of a retired port of Beirut official on 6 August 2020, who told Lebanese journalist Marcel Ghanem that the money trail for the AN had led to Iran (recounted in this superb and very detailed initial summary from the Center for Security Policy).
The profile of the transaction would be characteristic for such a case, involving not just a third-country swap-out of ship’s masters and a down-at-heels freighter run by a shell company in Cyprus, but a charter-party contract for the cargo (see the BBC report linked above; image below), in which there is no established shipping agent or transport line involved, but only the seller – Rustavi Azot – and a “buyer” in Mozambique who would never be motivated to pursue non-delivery in court because he wasn’t out any advance funds.
If Iran were trying to get AN sent to Lebanon, it’s much more likely that cooperating Russians would tell Rustavi Azot to ship it to Mozambique – and then arrange for the ship to feint into Beirut – than it is that Georgians would conspire with Iran, through Ukrainians and Russians, to bring off that little ruse.
A visit from another sickly ship – bearing cargo for Dreymoor
There are additional patterns of interest, moreover. One is that Dreymoor, the Russian broker, had recently delivered urea to Lebanon, via a shipment from the port of Yuzhny, near Odessa, in July 2012. That shipment was on another vessel, Al Mostafa, which at the time was Comoros-flagged and operated by Rania Marina in Lebanon.
In an exceptionally odd coincidence, the same ship, Al Mostafa, was listed in Beirut port records as delivering a cargo of 2,750 tonnes of “fertilizer” (engrais chimiques) to Beirut in February 2014, coming from the Egyptian port of Damietta. The seller or trading company/broker is not listed for this delivery in the port record.
Something fishy is going on here for the origin of Ammonia Nitrate in #LebanonExplosion . Mostafa and Rhosus are at Beruit Port at the same time. Both carrying the same cargo and same amount. Mostafa scrapped soon after, and we Rhosus is meant to to be still there. pic.twitter.com/G0ELk039Pf
— Brent Nagtegaal (@BrentNagtegaal) August 5, 2020
Odder still, Al Mostafa had run aground in November 2012 off the coast of Turkey, after the July 2012 delivery of urea to Lebanon.
Al Mostafa could conceivably have been back in operation by early 2014. It is noteworthy, however, that Al Mostafa (by IMO number, 7800136) was sent to a breaking-yard in Turkey in July 2014, five months after the February 2014 fertilizer delivery to Beirut.
I emphasize that this pattern, in itself, does not implicate Dreymoor in the 2013 AN delivery. But it establishes that a Russian firm, and one Rustavi Azot worked with in an exclusive relationship, was doing business moving nitrates to Lebanon – with a poorly maintained ship headed for the breaking-yard of history as part of the mix.
(In case it’s not clear, I find it doubtful that the Lebanese shipping company really spent the money to put Al Mostafa back in service after she ran aground in 2012, only to scrap her less than two years later. Al Mostafa was built in 1979, and was already 33 years old when she ran aground. The exact match of Al Mostafa’s fertilizer tonnage in February 2014 with Rhosus’s on her arrival in November 2013 has a suspicious ring to it, especially since February 2014 was right about the time the ammonium nitrate was said to have been offloaded from Rhosus. The Internet sleuths who turned up the port records on Al Mostafa are right to be skeptical.)
U.S. aware of Russian involvement in attempts to import ammonium nitrate to Syria
Another factor is that in 2015, the U.S. imposed sanctions on a Syrian official, Mudalal Khuri, who had attempted “in late 2013” to arrange with a Russian company for a delivery of ammonium nitrate. A Russian businessman, Kirsan Ilyumzhinov, was also sanctioned at the same time, in part for his dealings with Khuri-linked businesses, although it isn’t clear whether Ilyumzhinov was involved in Khuri’s ammonium nitrate gambit.
There is nothing to affirmatively indicate that this transaction was related to the Rhosus shipment. But it’s another data point from the period on the same interconnected parties – Russia, Syria, Iran, and Lebanon – having an interest in getting ammonium nitrate into the Levant.
Also worth observing is that the Assad regime was disturbed during this period by the activities of the rising ISIS insurgency, which was being abetted by AN deliveries to ISIS from Turkey. The Assad regime and its Iranian backers thus had a focused motivation to be supplied with AN for themselves. Iran had a history of concocting IEDs with AN, of course. And making a curiously pointed source of motivation for Russia was the fact that Chechen jihadis from southern Russia – notably, the same Caucasus region where Georgia is located (with an operating pattern sometimes involving thinly populated areas of eastern Georgia) – figured prominently in ISIS’s early guerrilla successes in eastern Syria.
Beyond her long-term strategic stake in Syria, Russia had to care about what Chechens were doing in Syria, in part because they were liable to go back to Chechnya at some point, and amplify Russia’s terrorism problems. It’s the same concern the U.S. had about jihadis being trained in Afghanistan for operations abroad, including in the U.S. – and with even more likelihood at any given time of becoming, for Russia, a real, imminent security issue.
What it all adds up to is the probability that a Russian firm was closely involved in the Rhosus delivery, and that Iran was indeed lurking in the background of the almost laughably crooked transaction. Iran’s interests in moving ammonium nitrate to Beirut would include either or both of supplying Hezbollah and supplying Iranian commandos and the Assad regime in Syria.
Moreover, the peculiar fate of the ammonium nitrate – sitting in a warehouse a few yards from the dock for more than six years – doesn’t actually argue that no one knew why the AN was there. If no one knew why it was there, Lebanon could have earned a little cash by contracting with a reputable business to pick it up and sell it off. Any G20 nation could have assisted with that, ideally one like the U.S., France, or Saudi Arabia.
The long sojourn at the dock argues instead, much more strongly, that someone did know why the AN was there. That’s why you keep ammonium nitrate sitting in sloppy bags in a warehouse when no one claims it: because it’s convenient for whoever wants it there if it remains where it is, “unclaimed.”
