THE Sultanate of Oman is rapidly becoming the destination of choice for ships previously registered to Russian interests seeking refuge from tightening regulatory requirements and sanctions compliance questions in other states.

Lloyd’s List has tracked more than 30 ships that have been moved to Oman registered companies and special purpose vehicles so far this year. Most retain links to Russian interests and many are understood to retain Russian beneficial ownership.

Ships previously registered to companies that were ultimately owned by Sovcomflot, Fesco, Volga Shipping and Prime Shipping, have all moved to Oman-registered companies this year.

A total of 16 former Sovcomflot-owned tankers that have been moved through a rapid succession of technical management and third-party operator companies, generally based out of Dubai, have all now been registered in Oman.

Previous registered ownership for these vessels, all of which are subject to Western sanctions, had been based out of a Seychelles network of companies up until August. From mid-August onwards a series of Oman-registered entities were created, alongside the 100% shareholding registered investors in those companies, which have not published any details regarding their ownership.

The only common contact detail for these vessels within Oman’s register of business interests is a Russian national whose name and date of birth matches a former employee of Sovcomflot.

Lloyd’s List has contacted the individual for comment.

In the case of 13 bulk carriers that have recently moved ownership, the route to Oman has come via subsidiaries of Sindbad Overseas, a growing Oman charterer which specialises in sale-and-leaseback arrangements as well as other types of assets globally.

Sindbad Overseas itself is ultimately owned the Middle East Gulf state’s sovereign wealth Saturn Fund, which has recently been active in buying out Russian shareholders across other sectors, notably mining.

In June, a Saturn subsidiary replaced sanctions-hit Russian firm Alrosa as a shareholder in Angola’s state-controlled diamond miner Catoca. Saturn also bought out Russian shareholders in Kazakhstan-registered Polymetal International, a mining firm that was active in Russia before it split its divisions earlier this year.

Sindbad itself has just completed a $190m bond issuance with the help of the newly formed Oman Investment Bank, which is chaired by the president of the country’s wealth fund.

While the influx of previously Russian-affiliated shipping assets into Oman registered vehicles has only started to take off this year, it’s attractiveness as a destination coincides with tightening sanctions scrutiny elsewhere in the region.

In their bid to mitigate sanctions risks, Russian businesses are looking for neutral jurisdictions with simplified capital requirements, which are friendly to non-residents. While United Arab Emirates has previously been the most popular destination to establish companies to house ships with Russian beneficial ownership, UAE banks have tightened their policy towards Russian clients since late last year.

According to one Russian lawyer who represents at least three businesses that have recently moved ownership structures to Oman, the Sultanate is significantly less integrated into the Western financial system than the UAE, which lowers the risk of accounts being blocked.

“The bankers are less strict than in the UAE and the process to establish corporate accounts and company registrations is very simple,” explained the Moscow-based lawyer who has moved several clients into Oman this year.

“When it comes to sanctions their compliance requirements are less strict than in the UAE, and to be honest they do not pay attention this.”

In recent years, trade links between Russia and Oman have significantly increased, driven by official visits, new agreements, and a strategic realignment of Oman’s foreign policy. In part that has been accelerated by Western sanctions which have created an opportunity for Oman to position itself as a key link in logistics chains between Russia, India, China and Africa. That has in turn attracted Russians to set up companies and settlement offices for transit operations and signing contracts and to handle commodities.

Meanwhile, the Omani coastline has also emerged as a hot spot for ship-to-ship transfers of Russian oil.

According to recently Lloyd’s List analysis ship-to-ship transfers in the Gulf of Oman are enabling the transfer of Russian crude from a US Office of Foreign Assets Control-designated tankers to a non-Ofac-sanctioned tankers, which are then delivering cargoes to India and China.