Shipping companies tighten operations in fear of sanctions
Top oil shipping companies say they have tightened
operational guidelines and deployed technology to prevent accidental breaches
of sanctions, as the countries hit by ever tougher restrictions fight back with
elaborate strategies to dodge them.
Washington has ramped up shipping-related sanctions over the
last two years to make it harder for countries, such as Iran and Venezuela, to
export the oil that provides their main source of revenue.
In response, Iran and Venezuela have developed sophisticated
methods to bypass sanctions, which are also imposed to a lesser extent by the
European Union.
As a result, it is harder for shipping firms to avoid
facilitating blacklisted exports unwittingly, potentially laying them open to
being cut off from the US financial system or even having assets seized.
One way to evade sanctions is to hide behind the practice of
transferring oil from one ship to another at sea, known as a ship-to-ship (STS)
transfer.
STS transfers are legitimately used to avoid the need for
vessels enter a port area and incur port fees or when vessels are too big to
enter a terminal.
Sanctions dodgers can use STS to falsely document the origin
of the oil as a country near to where the transfer takes place rather than its
true origin.
As both Iran and Venezuela have boosted exports, cargo
trackers have detected an increased number of STS transfers in open waters over
the last year. They take place off Malaysia’s coast, at locations off Africa
and also in the Caribbean, shipping and trading companies say.
Maersk Tankers, which commercially manages the world’s
largest fleet of more than 220 product tankers, said the company was contending
with the falsification of documentation, making legitimate use of STS transfers
harder.
It has deployed new technology to screen vessel movements
and ownership structures to detect any suspicious activity that it can
investigate further as bigger players are particularly vulnerable.
“Shipowners are navigating an increasingly complex
environment. A part of this complexity arises from new and advanced practices
to evade sanctions,” Maersk Tankers’ chief commercial officer Eva Birgitte
Bisgaard told Reuters.
“Bigger players conduct a larger number of voyages, exposing
them to more and a greater variety of fraudulent behaviour,” she said.
NEAR-MISS
In separate incidents in December and January, two vessels
managed by Maersk Tankers almost took on cargoes of Iranian oil whose origin
was concealed.
The STS operations were halted before the cargoes were
transferred after Maersk Tankers was alerted by US pressure group United
Against Nuclear Iran (UANI).
UANI, which monitors Iran-related tanker traffic through
ship and satellite tracking, said it was aware of multiple illicit oil
transfers that affected shipping companies conducting regular trade.
“Most often, by the time the STS gets to a large company,
such as Maersk Tankers, the vessels have engaged in numerous STS in an attempt
to mask the origin of the cargo,” Claire Jungman of UANI said.
Other major companies are separately trying to unmask the illicit
activity.
US agribusiness group Cargill, one of the world’s largest
charterers of ships, said it had increased scrutiny of every party it trades
with, including ownership structures.
“Shipping unfortunately has still very opaque sides to it,”
Jan Dieleman, president of Cargill’s ocean transportation division said.
Royal Dutch Shell (RDSa.L), which used over 4,000 ports,
terminals and berths around the world last year, has raised the issue of risks
with cargo documentation, which is not standardised across the industry with
different regulations in different jurisdictions adding to the complexity, a
spokesperson said.
ADVANCE WARNING
Under the MARPOL international maritime convention, ships
planning STS in territorial waters are required to give notice to the coastal
authority 48 hours in advance, while companies carrying out STS in open sea
lanes are meant to notify the flag registry.
All commercial ships have to be registered, or flagged, with
a particular country, partly to comply with safety and environmental
regulations. Smaller flag registry countries usually lack the resources to
monitor the volume of STS that takes place in open seas.
Illicit STS was unlikely to follow the rigorous MARPOL
standards, shipping specialists said.
A ship captain who supervised Venezuela-related STS until
this year told Reuters that US sanctions had led to more covert transfers of
Venezuelan oil that were unsupervised and used equipment that flouted
standards. He declined to be identified due to the sensitivity of the matter.
The violation of maritime safety rules threatens tourism and
fishing.
“Our pristine Caribbean waters are the major attraction for
tourism on which most countries depend for their economic livelihood and
fishing,” Peter Brady, Director General of the Maritime Authority of Jamaica,
told Reuters.
“Any major pollution incident would have severe consequences
for both island states and the littoral countries within the basin.”
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