Shadow Fleet Ship’s Sanctioned Status Revealed
A 58,000-ton oil tanker called the Mikati was ploughing through the waters of the Indian Ocean one day when it got some bad news from faraway Brussels: it had been added to a list of sanctioned vessels in Russia’s shadow fleet. The story of the Mikati, currently passing through the English Channel, illustrates the strengths and weaknesses of the European Union sanctions regime that now includes some 600 ships.
The EU listed the Mikati in July, following a similar decision by Britain in November last year. Built in 2003, its advanced age makes it a typical shadow fleet vessel — as does the behavior that preceded its designation. Suspicious Behavior
According to data provided to RFE/RL by Windward, a maritime intelligence company, the Mikati went through a series of name changes, was sold to an anonymous owner, and repeatedly turned off its AIS location transponders in the period before it was sanctioned. This latter is regarded as a dangerous shipping practice by the International Maritime Organization (IMO) and is only permitted under special circumstances. The Mikati also changed the flag it was registered under, switching to Sierra Leone.
“Sierra Leone’s government outsourced management of its ship registry to a private company based in Cyprus,” Windward analyst Michelle Bockmann told RFE/RL, adding that the country was “the flag registry of choice” for shadow vessels. Taken together, these indicators were evidence enough to get the Mikati blacklisted. The EU included the Mikati in its 18th sanctions package against Russia on July 18.
Sanctions’ Immediate Impact
It had an immediate impact. Two days later the ship arrived in waters off Kochi, home to one of India’s largest oil refineries. But it did not unload the full cargo it had picked up in Russia’s Barents Sea port of Murmansk a month earlier. It’s not clear if there was a hitch or if the Mikati was following pre-arranged plans.
“Sometimes ships are sanctioned when they’re already under way, so someone will have to give the buyer a call and ask if the deal is still on,” Benjamin Hilgenstock, a senior economist at the Kyiv-based KSE institute, told RFE/RL. “They may be told ‘we need to figure this out first, so maybe wait a bit’ — or ‘we’ll take your oil but only if you give it to us for a little less money,’” he added.
The Samoan Connection
In any case, something was stirring behind the scenes. On July 25, the Mikati changed its registered owner and commercial manager, moving from Azerbaijan to Samoa, a nation of some 200,000 people in the South Pacific not known for having a thriving shipping industry. The company listed, Alga Oceanic Ventures, appears to have no Internet presence.
Its address is a business complex called La Sanalele, where its neighbors have included another shipping manager, Faleola Nexus Ltd, operator of an oil tanker named Orion — sanctioned by Britain and Ukraine for illicit trading in Russian crude. Another neighbor was a Taiwanese company called Pro-Gain Group Corporation that was sanctioned by the United States in 2018 in connection with illegal dealings in North Korean coal and oil.
The Mikati’s sudden ownership switch was followed by a new voyage, north along the coast to Mangalore. There, on August 3, it signaled that it had unloaded. “The 11-day delay was probably related to its sanctions and having to get new insurance,” Bockmann said. “That’s a really good example of how EU sanctions are disruptive. But they have very little teeth.”
Original Article: What Happens To A Shadow Fleet Ship When It’s Sanctioned? — Rferl