Maritime sanctions against Russia have backfired badly

Justin Stares

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If an uninsured Russian rust-bucket goes down off your coast causing massive environmental damage and loss of life, it will be easy to point the finger of blame.

Operating such a sub-standard vessel is both illegal and immoral, but it is the logical, foreseeable result of the legislation that has forced Russia’s shadow fleet into existence.

The European Commission was warned. The industry lobby, European Community of Shipowners’ Associations (now European Shipowners) told Brussels law-makers before the legislation came into effect that sanctions would backfire. No-one listened.

“You are splitting the industry in two,” the lobby’s president told them.

The message was delivered in private because doing anything other than supporting sanctions was — and to a lesser extent, still is — considered grounds for labelling someone “pro-Putin”.

If you were a Russian shipowner and found yourself suddenly cut off from the dominant London P&I insurance market, what would you do? Simply shut up shop? Or would you, as they have done, look for alternative insurance providers that would inevitably lack access to the massive re-insurance required to cover potential, colossal risks.

Before EU sanctions, there were already sanctions-dodging ships, but the “shadow fleet”, as a concept, didn’t exist; the International Maritime Organization officially approved the term in 2023. Since EU sanctions, the world has seen a shadow or ‘dark’ fleet of hundreds ships spring up, most of them tankers. The number of EU-listed vessels in Russia’s shadow fleet has now reached 557, the Commission said ahead of announcing this week’s raft of legislation.

False-flagging — a trick used to evade sanctions enforcement by pretending a shadow fleet vessel is legitimate — has become a global game of whack-a-mole that authorities are losing. False-flagged Dutch “kingdom” ships claiming to be flagged in Curaçao and Aruba (which doesn’t even have a ship registry) have been spotted in Dutch waters, much to the frustration of local industry.