According to a new report from the London-based think tank Royal United Services Institute (RUSI), sanctions against Russia, North Korea, and Iran will continue to fail unless the global maritime registry system is structurally reformed.
The study highlights that Russia and Iran are increasingly resorting to methods such as concealing vessel ownership, disabling identification systems, registering with flag states with lax oversight, and flying flags of convenience to avoid detection and sanctions.
The report’s authors, Gonzalo Saiz and Tom Keatinge, stated, “The ability of vessels to easily obtain a flag without any scrutiny, avoid ownership transparency, and evade sanctions enforcement has paved the way for the emergence of a parallel maritime ecosystem in its own right.”
Just last year, approximately 700 vessels were subjected to sanctions. However, the vessel registration process is still seen as a “critical vulnerability” in the implementation of international sanctions. Saiz and Keatinge said, “Vessels removed from one registry for violating sanctions can often obtain a new flag within a matter of days.”
The report states that current measures are inadequate because they mostly come into play only after violations occur, rather than preventing them. It also noted that “diplomatic pressure, enhanced surveillance, and national sanctions enforcement have yielded some results, but these measures remain reactive and uncoordinated.”
At the heart of the problem is the “shadow fleet” used by the Kremlin to circumvent the price cap Western countries placed on Russian oil. These vessels allow Moscow to continue its oil exports, which are a crucial source of revenue for its war in Ukraine.
RUSI analysts argue that maritime governance requires “radical improvement.” The analysts note that the International Maritime Organization (IMO) lacks the tools and authority to stop the practice of “flag hopping.” In this practice, vessels change their national flags to conceal their identities and continue carrying sanctioned oil and goods with impunity.
Flag hopping is not a new method, but it has accelerated since Russia began its full-scale invasion of Ukraine over three years ago. The report states, “A large number of flag states allow registration with minimal oversight, without verifying beneficial ownership or assessing sanctions risk.”
Some major registries, such as Panama and Liberia, have tightened their controls under diplomatic pressure. Since 2019, Panama has deregistered over 650 vessels. However, these efforts are undermined as smaller registries like Cameroon, Gambia, Honduras, Sierra Leone, and Tanzania continue to flag vessels with almost no oversight.
Another element that further weakens the system is private registration services, which often operate outside the territory of the flag state they represent and under limited supervision.
According to RUSI, only a systemic reform, supported by the Financial Action Task Force (FATF), can offer a realistic way forward. FATF is the international organization that combats money laundering and has the authority to publicly name violators.
The report warned, “If the shadow fleet phenomenon is not urgently addressed, it will draw in more vessels, cargo, and countries, becoming a system that rewards secrecy over transparency.”
The European Union, in its various sanctions packages, has blacklisted a total of 444 vessels belonging to the shadow fleet. These vessels are banned from accessing EU ports and EU services.
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