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UK to check ‘shadow fleet’ tankers for ‘suspect, dubious’ insurance during English Channel transits

The Joint Maritime Security Centre, and Maritime and Coastguard Agency will be deployed in information-gathering exercise as tankers engaged in Russian trades sail though the UK chokepoint

Focus on marine insurers covering elderly and poorly maintained tankers shipping Russian oil has intensified amid concern from regulators they would be unable to pay out for environmental damage to coastal states in the event of a casualty or oil spill

THE UK government said the coastguard will contact by radio tankers transiting through the English Channel shipping sanctioned Russia oil as part of checks of whether they have “suspected dubious” insurance.

The Foreign, Commonwealth & Development Office provided further detail of how the “challenge” to shadow fleet tankers* transiting UK waters would look, as it announced the largest number of ships sanctioned since the G7 oil price cap was first imposed in December 2022. 

But whether tankers will comply or have any legal obligation to provide the information remains untested.

The focus on marine insurance reflects rising concern among regulators that many of the elderly and poorly maintained tankers shipping Russian oil are using marine insurers unable to pay out for environmental damage to coastal states in the event of a casualty or oil spill.

Acceptable insurance standards were those met by the 12 P&I clubs that comprised the International Group, which insures 86% of the global fleet, according to the Foreign Office.

The Joint Maritime Security Centre and the Maritime and Coastguard Agency would co-ordinate to identify and contact vessels in its waters, the UK government said.

The coastguard could also request other details about ships’ technical compliance.

 

 

About a dozen ships daily that are identified as part of the so-called dark fleet* of some 668 tankers shipping sanctioned Iranian, Russian and Venezeulan oil ply the English Channel.

The channel is used by tankers as they sail to or from Russian Baltic ports where they load Urals crude or diesel destined for Asian, African or South American countries.

Ships have the right of innocent passage through the Channel and other chokepoints under the Unclos convention.

But the Foreign Office has said that flag states under which the tankers sail must take heed of revised guidelines issued by the International Maritime Organization’s legal committee earlier this year for accepting insurance companies and financial security providers and certificates. These list the criteria and documentation to ensure that liability for conventions including oil pollution, bunker pollution, and wreck removal can be met. 

The move to challenge ships about their insurance was discussed at a meeting with industry figures and the government last week, Lloyd’s List understands.

Ships have no obligation to provide the information, and should they decline, the coast guard is unable to stop them transiting the English Channel, the minister was told.

Blue Cards are issued by marine insurers to indicate they will pay out in the event of a casualty or oil spill. Flag states publish a list of marine insurers that they authorise to issue Blue Cards for their vessels.

A proliferation of questionable marine insurers are now said to be providing cover for many dark fleet vessels, including one in the UK that Lloyd’s List this week revealed was incorporated by an Iranian from Canada who said his identity was stolen. That’s highlighted the absence of due diligence undertaken by some flag states.

Marine insurers include retrospective sanctions exclusion clauses in contracts to protect them against rogue shipowners shipping sanctioned oil without their knowledge.

 

* Lloyd’s List defines a tanker as part of the dark fleet if it is aged 15 years or over, anonymously owned and/or has a corporate structure designed to obfuscate beneficial ownership discovery, solely deployed in sanctioned oil trades, and engaged in one or more of the deceptive shipping practices outlined in US State Department guidance issued in May 2020. The figures exclude tankers tracked to government-controlled shipping entities such as Russia’s Sovcomflot, or Iran’s National Iranian Tanker Co, and those already sanctioned.

Download our explainer on the different risk profiles of the dark fleet here 

 

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