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Dark fleet crackdown looms as EU states consider stopping suspect ships

Growing fears among EU coastal states of a looming environmental disaster has catalysed a more robust approach to sanctions enforcement in Brussels with new targeted sanctions expected

European Parliamentary resolution calls for shadow fleet ships to be restricted from EU waters including the English Channel, inspected for proof of insurance cover and for member states to seize illegal cargo without compensation

THE European Parliament is expected to pass a resolution on Thursday calling for more “targeted” measures against Russia’s so-called shadow fleet. 

The measure, which has broad support from political groups across the parliament, calls for more enhanced EU-wide action to ensure stricter enforcement and the expansion of existing sanctions, including the immediate inspection of vessels operating in EU waters to verify their insurance coverage and compliance with IMO requirements.

The resolution also calls for “measures to restrict the use of the English Channel by Russian ‘shadow fleet’ vessels”.

While the joint resolution is not legally binding, it marks a substantive shift in the willingness of EU member states to address the environmental and security risks posed by the dark fleet*. 

The European Commission has to date passed 14 separate packages of sanctions targeting Russia, however, enforcement actions against ships has been almost non-existent.

With a new commission now getting underway and growing alarm among EU coastal states about the likely prospect of an uninsured environmental disaster, there is now growing support within the commission as well as the parliament for a more robust approach towards stopping shadow fleet tankers from entering EU waters. 

New sanctions are already being discussed among EU member state policy heads. 

“It is not only about maritime safety, it is also about the environment,” explained EU Transport Commissioner-designate Apostolos Tzitzikostas as he faced questions on the dark fleet during his confirmation hearing last week.

“If we have an accident we will have real issues to deal with. So, I will push to make the requirement of proof of marine insurance mandatory, so that this way we can put the spotlight on suspicious vessels,” he told the European Parliament.

While measures to close loopholes and prevent sanctions evasion are seen as a step forward towards countering Russia’s shadow fleet, EU representatives have been considering a more targeted approach in the run up to tomorrow’s vote.

A background briefing that informed Thursday’s resolution considers a targeted strategy focused on what the authors consider the weakest point of Russia’s shadow fleet — its insurance coverage. The briefing proposes EU states require disclosure of oil spill insurance coverage from all vessels, including audited financial statements of the insurer and a credit rating by a reputable international rating agency.

That in turn would require EU states to exert pressure on key flag state authorities and ship classification societies to verify the adequacy of oil spill insurance when providing or renewing registrations and verify the adequate maintenance of technical standards.

“In circumstances where certain vessels present an immediate threat to environmental safety or maritime traffic, coalition nations should retain the authority to physically intercept these tankers, as a last resort,” the report states. 

While policy insiders concede that preventing shadow vessels from entering territorial waters or EEZs is inherently legally challenging, if not impractical or impossible, the Parliamentary resolution “encourages the member states to co-operate closely with the United Kingdom on measures to restrict the use of the English Channel by Russian ‘shadow fleet’ vessels”.

The UK government has not directly responded to the resolution, however Lloyd’s List understands that British policy chiefs are already actively gathering information regarding the quality of the insurance of vessels transiting the Channel.

A Department for Transport spokesperson confirmed to Lloyd’s List that “suspected shadow fleet vessels, who may hold dubious or inadequate insurance, are being challenged by the Maritime and Coastguard Agency to provide details of their insurance status as they travel through the English Channel”. 

The UK government has previously stated that the shadow fleet “undermines the international rules-based maritime order and presents significant environmental and security risk”.

Any substantive shift in EU sanctions policy is likely to require the full support of industry stakeholders including the P&I clubs, brokers and shipowners to be effective, but according to senior industry and insurance representatives there has been a notable shift towards supporting a crackdown. 

In addition to the insurance inspections, the parliamentary resolution calls for an outright ban on ship-to-ship transfers of Russian crude oil and oil products in EU waters. It also asks governments to establish enhanced surveillance capabilities, especially drone and satellite monitoring.

It also foresees the likely event of shadow fleet seizures. The resolution draft currently “calls on the member states to designate ports capable of handling sanctioned vessels carrying crude oil and LNG and to seize illegal cargo without compensation”.

While much of the detail of this resolution would present significant legal challenges if any government were to immediately enforce such measures, the fact that it is expected to pass with broad support indicates that there is growing appetite to tackle Russia’s shadow fleet head on. 

“The ships that are engaged in the trade of Russian oil not compliant with G7/EU sanctions, and accumulatively have no known insurance or no insurance equivalent to P&I and are owned or operated by companies in countries that do not abide by the G7/EU sanctions, pose significant threats to the environment and to the safety of navigation around European coasts and beyond,” said Sotiris Raptis, secretary general at the European Community Shipowners’ Associations

While industry associations have struggled to speak out publicly on the issue due to internal disagreements among shipowner members over the merits of sanctions policy, ECSA is now backing further action. 

ECSA has now called on the EU to continue to engage with the G7 partners and with the International Maritime Organization “to address these concerns and to ensure that the highest standards of maritime safety and pollution prevention are upheld in compliance with international conventions”.

The European Parliament has a largely symbolic role on sanctions, which are proposed by the European Commission, with all 27 countries subsequently required to sign off. 

The new commission, however, is expected to mirror much of the resolution language in the next round of sanctions measures. The enforceability of proposals to stop suspected shadow fleet ships in EU waters will now be the subject of intense legal and policy scrutiny.

 

* 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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