Russia’s industrial scale sanctions-evasion programme is growing more complicated and sophisticated, courtesy of an ever expanding “dark fleet” of subterfuge shipping and a shadowy network of brass plate companies and middlemen beyond the reach of Western interventions.
But the suggestion that these state-sponsored opaque operations are somehow invisible or untouchable, is wide of the mark.
Much of the dark fleet activity is “hiding” in plain sight and most of the rest is entirely accessible to analysts with the right data tools, such as Seasearcher Advanced Risk & Compliance.
Lloyd’s List Intelligence has tracked the rise of the so-called dark fleet since the start of the conflict. It has now doubled in size over the past year to cover around 10% of tankers trading internationally.
In Lloyd’s List’s extended Ukraine Effect podcast, our analyst Michelle Wiese Bockmann and Daniel Martin, a partner at law firm HFW, walk through the growing role of this dark fleet, the complexities related to sanctions risk and why Russia’s invasion has supercharged deceptive shipping practices.
Any suggestion that knowledge of the activities of this fleet is somehow out of reach to governments or companies is itself another layer of obfuscation in the increasingly complex and politically weaponised risk and compliance agenda.
For example, the 26-year-old, Cameroon-flagged, vintage Georgian tanker Turba, the only asset of the appropriately-named company Shadow Shiptrade SA, has regularly sailed through European waters over the past year, even loitering in the ship to ship hotspot of Greek coastal waters for an extended period in February.
And yet Turba has not been surveyed since 2017 and was last inspected by port state control in 2010.
It flies a flag blacklisted by the Paris MoU and exhibits a textbook pattern of deceptive behaviour that will have most due diligence systems checks flashing red and sounding a very loud alarm for good measure.
The vessel is no anomaly. Most of this dark fleet have not been inspected recently, have substandard maintenance, unclear ownership, no insurance and are being operated to circumvent sanctions and high insurance costs. Yet these ships are engaging in highly dangerous and environmentally risky STS transfers with no oversight.
Their blatant sanctions evasion is ultimately a political matter, but the clear and present danger they present in terms of safety is a global risk. It needs to be urgently addressed by governments and the International Maritime Organization, but the willingness of flag and port states to address the issue remains to be seen.
This is not simply a case of political oversight, however. Corporate oversight when it comes to sanctions risk is a sliding scale of risk versus reward.
As the latest company to fall foul of sanctions evasion, Euronav has hastily convened an investigation to work out whether they may have inadvertently stored Iranian crude at the behest of an unnamed customer.
Whether Euronav’s robust due diligence checks have somehow fallen short is yet to be confirmed, but even a cursory look at the tanker involved in this case, Vietnam-flagged aframax tanker Abyss would have flagged a trading pattern that is at best suspicious.
The trading history of Abyss is littered with similar incidents and the tanker is one of several Vietnam-flagged vessels that has been actively engaged in loading and transferring Iranian crude.
It was also involved in an aborted STS transfer involving Maersk Tankers last year and a similar incident in 2019 that saw Italian oil firm Eni reject a cargo on quality grounds amid suggestions that the oil loaded from Abyss via a separate STS operation was Iranian rather Iraqi.
Of course, nobody is suggesting that Euronav, a highly reputable firm with a solid track record of regulatory checks, would have risked a sanctioned cargo for what will have been a very, very minor deal at a point when they are earning some of the best rates in living memory at the foot of what promises to be a very lucrative tanker supercycle.
But if it can happen to Euronav, and Maersk Tankers and Eni, it can happen to anyone.
Whatever the final details of Euronav’s investigation, this episode is likely to be taken as a salutary reminder to operators everywhere that even the biggest operators are vulnerable and need to be looking harder at every detail.
The dark fleet has been allowed to form because of the willingness of governments to turn a blind eye rather than embroil themselves in difficult politics.
Maritime businesses do not have that luxury and cannot make the mistake of thinking that the dark fleet is somehow invisible.
As Euronav rightly put it — it’s a minefield out there and everyone is going to have tread more carefully than ever.
