US flags environmental risks from illicit transfers of Iranian oil off Malaysia, report says

US flags environmental risks from illicit transfers of Iranian oil off Malaysia, report says

A U.S. treasury official warned of environmental risks from illicit transfers of Iranian oil off Malaysia, news portal Malaysiakini reported on Thursday, as the United States narrows its focus on financing for militant groups routed through Southeast Asia.

The United States sees Iran's capacity to move its oil as being reliant on service providers based in Malaysia, a senior U.S. treasury official said this week.

The official also said the United States was attempting to prevent Malaysia from becoming a jurisdiction where the Palestinian militant group Hamas could raise and transfer funds.

Brian Nelson, the U.S. Treasury undersecretary for Terrorism and Financial Intelligence, said one of the main ways Iran raised money was through the sale of illicit oil to buyers in East Asia, Malaysiakini reported.

"Many of these shipments traverse the waters around Malaysia and are loaded onto vessels of questionable legitimacy that may also pose major environmental and safety risks," he was reported as saying.

Nelson expressed concern for any parties providing "ship-to-ship" transfers of illicit oil as such manoeuvres could lead to accidents or oil spills that threatened Malaysia's coasts.

The U.S. Treasury has also seen an uptick in attempts by Iran and its proxies, including Hamas, to raise and move money in Southeast Asia, Nelson added.

He urged those who wish to support humanitarian assistance to Gaza to donate to reputable charities to ensure the funds were not diverted elsewhere.

Nelson and Neil MacBride, Treasury General Counsel, are on a visit to Singapore and Malaysia this week to advance efforts in countering financing and revenue generation by Iran and its proxies.

The office of Malaysia's prime minister did not immediately respond to a request for comment.

But Home Minister Saifuddin Nasution Ismail said he conveyed the country's stance regarding sanctions to Nelson, during a meeting on Thursday. Saifuddin said Malaysia would comply with United Nations sanctions but would not recognise unilaterally applied sanctions.

He told reporters he also informed Nelson that Malaysia had investigated and taken action against an organisation with suspected links to Palestine. He did not name the organisation.