WASHINGTON, Aug 21 (Reuters) - The small South Pacific island nation of Tuvalu will stop allowing ships owned by Iran to operate under its flag after U.S. lawmakers accused the country of running afoul of U.S. sanctions.
Lawmakers had called for the U.S. government to take action against the Tuvalu Ship Registry for re-flagging 22 Iranian vessels, citing a recently passed law that authorized sanctions against anyone who re-registered Iranian oil tankers.
Reflagging ships masks their ownership, which could make it easier for Iran to obtain insurance and financing for the cargoes, as well as find buyers for the shipments without attracting attention from the United States and European Union.
After initially rebuffing calls to end the practice, the Tuvalu registry said it has started de-registering all National Iranian Tanker Company vessels and the process would be "completed in the shortest time practicable."
Congressman Howard Berman, who had warned Tuvalu against reflagging ships, applauded the decision.
"Iran is learning the hard way that we will not relent in applying crippling sanctions on the regime, and others are learning that evading international sanctions is a losing strategy," Berman said in a statement.
Iranian diplomatic officials in Washington were not immediately available for comment.
The United States has a long-standing ban on imports of Iranian oil and has imposed new economic sanctions that have curbed Iranian oil imports by most other major nations.
The European Union banned Iranian oil imports as well as providing insurance for vessels carrying Iranian oil on July 1, part of international efforts to pressure Tehran to end a nuclear program the West believes is aimed at producing atomic bombs.