EU Authorities Implement New Measures to Combat Russian Shadow Fleet
This year, some European port authorities began to require tangible proof of insurance and registry documentation. Finland, for example, implemented systematic checks in its exclusive economic zone on 11 December. The requirement applies to tankers entering from Russian ports with crude or product cargoes, and demands the presentation of a civil liability certificate. Germany adopted a similar measure in July, requiring each eastbound tanker in the Fehmarn Belt in the western Baltic Sea to provide information about its oil spill insurance.
As most of Russia’s shadow fleet tankers avoid reputable insurers and rarely call at European ports, authorities had been operating with incomplete liability data. The purpose of these checks is clear — they aim to create a legal basis for the detention of ships without verifiable financial security.
Russian Shadow Fleet: A Growing Concern
The shadow fleet is not just a sanctions evasion mechanism for Russian oil, as recent hybrid attacks have indicated. The vessels are also suspected to be launch pads for Russian drones used to reconnoiter critical Western sites and disrupt civilian airports (see the attack that closed Copenhagen airport on September 22 and other Danish airports on September 24), to sever subsea cables, and to carry surveillance/spy equipment.
The fleet routinely disables its positioning beacons, obscures vessel ownership, falsifies registry documentation, and employs unsafe tankers that increase the risk of collisions, anchor drags, and environmental damage. The only plus is that from a Western point of view, they present a significant target critical to the Kremlin’s aims. By early this year, analysts estimated that roughly one-sixth of the world’s active tanker fleet belonged to Russian operators employing obscure flags and shell companies. The number of vessels exceeded 900, representing a nearly 50% increase compared to the previous year. The average vessel age is more than 20 years, compared to 13 years for mainstream tankers.
Insurance Data Reveals Systemic Non-Compliance
Insurance data points to systemic non-compliance. In a sample of more than 14,000 tankers compiled by independent researchers, only around 64% had identifiable protection and indemnity (P&I) coverage. Among ships confirmed to be carrying Russian crude, the share insured through the International Group of P&I clubs fell below one-third. Only around half the vessels transporting Russian oil products were insured.
EU Regulations Evolve to Address Gaps
The EU’s regulations are evolving to address these gaps. By July, the EU had designated 444 shadow fleet vessels. The 19th sanctions package, proposed in September, would expand the list by 118 and remove remaining exemptions for major Russian oil producers. It also sets a timetable to prohibit Russian liquefied natural gas (LNG) imports by 2027. Earlier packages relied on voluntary compliance and self-reporting by insurers. The new package ties port access to verifiable insurance and seeks to block re-insurance through EU entities. Coordination with G7 partners is intended to close reflagging loopholes.
Consequences of Failure to Verify Liability Coverage
Failure to verify liability coverage exposes coastal states to financial loss and environmental harm. The disruption of the Estlink 2 electricity cable between Finland and Estonia illustrates the consequences. Investigators believe the Eagle S, a Cook Islands–flagged tanker, dragged its anchor over the seabed and damaged multiple submarine cables. Finnish authorities detained the vessel in December 2022 and later released it after a €1m ($1.2m) guarantee was posted. Repairs are estimated at €60 million. Without valid insurance, cleanup and restoration costs are borne by European taxpayers.
But tougher enforcement raises the stakes for Russia’s shadow fleet operators.
Original Article: Europe Moves Toward Shadow Fleet Seizures — Cepa