An article published in The Foreign Policy highlights the current menace of the maritime world, ships sailing under false flags to evade sanctions, and the main concern here is Russian tankers trying to dodge the crude oil sanctions.
The flag of convenience for most shippers are the Marshall Islands, Liberia and Panama, which are not the top shipowning nations of the world. Countries owning most ships are Japan, Greece and China, but they aren’t ruling the flag registration. Even Germany and the US aren’t the ones benefiting from the flag.
These countries with an economy have a lower fee for ship registration and have less stringent regulations, which many exploit to get a flag registration for their vessels. Recently, the flag of convenience switch has become more rampant as it helps evade sanctions. Some of them have even started to use their flags without telling them.
Earlier, in the last few decades, this switch to the flag of convenience mostly happened due to the lower fee of these flag states.
So, more old tankers are bringing oil to China and other Asian countries from sanctioned nations like Iran, Russia or Venezuela.
An analyst from the Lloyd List Intelligence confirmed this, saying that more shippers are going for privately owned small registries to evade sanctions. Most of these companies state that their ships are flagged in these countries and often get false IMO numbers from these countries.
Most of these registries don’t have the resources to spend time investigating the actual IMO numbers, and it’s generally difficult to catch these false IMO numbers.
This shift in registries has been a common issue for decades since Iran started ferrying oil in ships registered in Zanzibar and Tanzania. Both of these regions have privately owned registries.
Some countries like Greece and Britain usually follow sanctions on goods travelling by sea and not just particular ships of a country which deals with the flag of convenience issue to a certain extent. These flag-of-convenience states are often lenient on both vessels and cargo.
Russia has now adopted this strategy, evading the sanctions imposed due to the Ukrainian war. This is seen in the number of illegal oil tankers shipping crude oil to China and the adjoining areas. Some 2 million barrels of oil are headed to China daily from Venezuela, Iran or Russia.
References: Foreign Policy, AEI
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