US-sanctioned ships don’t lose flag for long
Washington inducted 37 vessels in excess of 10,000 dwt to its sanctioned entities list in the past year
Majority of ships sanctioned in the past year remain flagged, even when excluding vessels registered in Russia
VESSELS sanctioned by the US have been able to maintain their flag or reflag with other registries, according to an analysis of data from the US Office of Foreign Asset control and Lloyd’s List Intelligence.
Be it due to lax due diligence by registries, lack of enforcement, or both, it illustrates that sanctions do not necessarily raise cumbersome obstacles for ships to acquire a mandatory service such as flag registration, allowing ships to hop from one flag to the other and potentially resume commercial activities.
Excluding fishing vessels, the US imposed sanctions on 96 commercial ships last year, of which 37 were more than 10,000 dwt. Of those larger vessels, 11 have since changed their flags post-sanctioning, while flags of four ships are unknown.
In some instances, the US has issued a general licence, which is an authorisation to engage in otherwise prohibited transactions with sanctioned entities. With regards to ships, these licences are issued for a limited time, allowing transactions that typically pertain to health, safety and environmental issues.
Six vessels flagged by Panama were sanctioned in 2022, and it still flags four of them. Certain transactions with three of those vessels are permitted under such general licence.
Rafael Cigarruista, general director of merchant marine at the Panama Maritime Authority, told Lloyd’s List, following the completion of an internal investigation into the four vessels, they are “in the process” of being deregistered.
Liberia is also flagging two US-sanctioned ships with whom these transactions are allowed under the same licence.
The Liberian flag registry did not respond to requests for comment on whether they plan to deregister these ships when the licence expires in mid-April.
None of the larger ships sanctioned in 2022 were flagged with Tanzania-Zanzibar when targeted by Ofac, but four have since reflagged with the registry, who has a history of being targeted by vessels in the so-called dark fleet.
The Zanzibar Maritime Authority did not respond to a request for comment.
Unsurprisingly, Russian vessels bore the brunt of sanctions last year, with 21 Russia-flagged ships entering the blacklist. One of these vessels — the vessel Lana (IMO: 9256860) — was at the epicentre of a monthslong cargo-seizure and hostage situation. The 2003-built aframax is now flagged with Iran.
Djibouti deflagged five sanctioned vessels in the past year, including the infamous Young Yong, now known as Saint Light (IMO: 9194127), which ran aground off the Singapore Strait in October.
The very large crude carrier has since reflagged with Barbados, one of five tankers joining the registry since April of the past year. Although the vessel Saint Light is the only sanctioned vessel among them, the other four are suspected of being part of the dark fleet.
Four of the sanctioned vessels deflagged by Djibouti have not generated an Automatic Identification System signal since mid-2021 — prior to being blacklisted last November — Lloyd’s List Intelligence shows, and their flag is currently unknown.
Cameroon, another flag known to be targeted by the dark fleet, is now flagging one sanctioned ship, the 1996-built handysize bulker Light Moon (IMO: 9109550), blacklisted more than a year ago for ties to a Houthi finance network.
A representative for the Cameroon Ministry of Transportation said the agency was not aware that the vessel, which was sold and registered under a new owner, was sanctioned at the time of registration. He said that following Lloyd's List approach, the ministry checked and confirmed that the veteran bulker is indeed sanctioned and have consequently issued a cancellation notice to the owners.
The average age of the larger ships sanctioned last year is 23, and aside from the Russia-flagged ships who are predominantly general cargoships, most of the blacklisted vessels are tankers, including three VLCCs.
With additional reporting from Bridget Diakun