A new report from the Royal United Services Institute (RUSI) highlights that the current sanctions against Russia, North Korea, and Iran are fundamentally flawed due to the inadequacies of the global maritime flagging system. The authors, Gonzalo Saiz and Tom Keatinge, argue that the prevalence of evasive tactics employed by these nations, such as obscured ship ownership and the use of false flags, allows them to successfully evade both detection and enforcement of sanctions. The study emphasizes that the ease of acquiring flags without thorough scrutiny has led to a parallel shipping ecosystem that undermines the efficacy of international sanctions.
Despite nearly 700 vessels being sanctioned over the past year, the report identifies vessel registration as a “critical weakness” in sanctions enforcement. Ships often manage to find new flags in mere days despite being removed from registries due to sanctions violations. RUSI analysts contend that measures currently in place are mostly reactive, responding to violations instead of preventing them. The authors argue that diplomatic pressure and enhanced surveillance have failed to create a unified, proactive strategy to counter these tactics.
The existence of the “shadow fleet” is central to the issue; these vessels are actively used to evade the Western price cap on Russian oil, which is a vital revenue stream for Moscow amid its ongoing conflict in Ukraine. The report stresses that maritime governance must undergo significant improvement as managing agencies like the International Maritime Organization (IMO) currently lack the authority and tools necessary to combat the practice of “flag hopping,” wherein ships change their registry to obscure their identity while continuing to transport sanctioned goods.
The practice of reflagging has become increasingly common since Russia’s full-scale invasion of Ukraine over three years ago. While larger registries like Panama and Liberia have begun to tighten their oversight in response to diplomatic pressure, smaller registries such as Cameroon, Gambia, and Honduras continue to operate without sufficient diligence. This diminishes the overall effectiveness of the sanctions regime, as vessels can evade responsibility easily. Additionally, private registration services operate with virtually no oversight, complicating compliance and enforcement efforts even further.
The report argues that only a comprehensive reform of the maritime flagging system, backed by institutions like the Financial Action Task Force (FATF), can provide a viable solution moving forward. The FATF has the unique ability to “name and shame” offenders, creating additional incentives for compliance. Without urgent action to address the expanding shadow fleet, the authors warn, more vessels and cargoes will continue to enter a system that prioritizes opacity over adherence to international laws and regulations.
The European Union’s efforts to blacklist these vessels have led to a total of 444 vessels associated with the shadow fleet being denied access to EU ports and services. However, the report underscores that these measures alone are insufficient, as they remain reactive. The call for extensive reforms is critical for establishing a more coordinated and proactive approach to international sanctions enforcement, thereby safeguarding global compliance and accountability in maritime activities.
