Maritime industry seeks to combat black oil transfers at sea
- Increase in the volume of oil transfers from countries affected by sanctions
- Major oil transport companies concerned about false documents
LONDON / MEXICO CITY, July 13 (Reuters) – Major oil transport companies say they have tightened operational guidelines and deployed technology to prevent accidental sanctions violations, as countries hit by increasingly stringent restrictions fight back with strategies developed to dodge them.
Washington has stepped up sanctions related to shipping over the past two years to make it harder for countries like Iran and Venezuela to export the oil that is their main source of income.
In response, Iran and Venezuela have developed sophisticated methods to circumvent sanctions, which are also imposed to a lesser extent by the European Union.
As a result, it is more difficult for shipping companies to avoid unintentionally facilitating blacklisted exports, potentially exposing them to the shutdown of the US financial system or even the seizure of assets.
One way to escape sanctions is to hide behind the practice of transferring oil from one ship to another at sea, known as ship-to-ship (STS) transfer.
STS transfers are legitimately used to prevent ships from having to enter a port area and incurring port fees or when the ships are too big to enter a terminal.
Sanctions crooks can use STS to falsely document the origin of the oil as a country close to where the transfer takes place rather than its true origin.
As Iran and Venezuela boosted their exports, cargo trackers have detected an increase in the number of open-water STS transfers over the past year. They take place off the coast of Malaysia, in places off Africa and also in the Caribbean, according to shipping and trading companies.
Maersk Tankers, which commercially operates the world’s largest fleet of more than 220 product tankers, said the company struggles with documentation falsification, making legitimate use of STS transfers more difficult.
It has deployed new technology to monitor vessel movements and ownership structures to detect any suspicious activity that it can further investigate, as the bigger players are particularly vulnerable.
“Shipowners navigate an increasingly complex environment. Part of this complexity stems from new and advanced practices to evade sanctions,” Eva Birgitte Bisgaard, commercial director of Maersk Tankers, told Reuters.
“The bigger players are taking more trips, exposing them to more and more fraudulent behavior,” she said.
In separate incidents in December and January, two ships operated by Maersk Tankers nearly loaded shipments of Iranian oil, the origin of which was withheld.
STS operations were halted before the cargo was transferred after Maersk Tankers was alerted by the US pressure group United Against Nuclear Iran (UANI).
UANI, which monitors tanker traffic linked to Iran through vessel and satellite tracking, said it was aware of several illicit oil transfers that affected shipping companies in regular trade.
“More often than not, by the time the STS gets to a large company, such as Maersk Tankers, the ships have surrendered to many STS in an attempt to hide the origin of the cargo,” UANI’s Claire Jungman said. .
Other large companies are separately trying to uncover the illicit activity.
U.S. agribusiness group Cargill, one of the world’s largest ship charterers, said it has increased oversight of all parties it trades with, including ownership structures.
“Shipping unfortunately still has very dark sides,” said Jan Dieleman, president of Cargill’s shipping division.
Royal Dutch Shell (RDSa.L), which used more than 4,000 ports, terminals and berths around the world last year, raised the issue of risks associated with cargo documentation, which is not standardized in the industry with different regulations in different jurisdictions adding to the complexity, a spokesperson said.
Under the international maritime convention MARPOL, vessels providing STS in territorial waters are required to notify the coastal authority 48 hours in advance, while companies conducting STS in open sea lanes are expected to notify the flag register.
All commercial vessels must be registered or flying the flag of a particular country, in part to comply with safety and environmental regulations. Small countries of registry generally do not have the resources to monitor the volume of STS that takes place on the high seas.
Illicit STS was unlikely to follow MARPOL’s rigorous standards, shipping experts said.
A ship captain who oversaw the Venezuela-linked STS until this year told Reuters that US sanctions led to more secret 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 crystal-clear Caribbean waters are the main tourist attraction on which most countries depend for their economic livelihoods and fisheries,” Peter Brady, director general of the Jamaica Maritime Authority, told Reuters.
“Any major pollution incident would have serious consequences for both island states and countries bordering the basin.”
Editing by Barbara Lewis
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