Crippling the Shadow Fleet
The EU's 14th Sanctions package marks a decisive escalation against Russia's shadow fleet, a group of second hand, ageing, decrepit, poorly maintained vessels with inadequate insurance cover. The package imposes individual restrictions on 69 individuals and 47 companies from Russia, as well as trade restrictions on 61 entities from the Russian Federation and third countries that have been identified as having links to the Russian arms sector.
The shadow fleet, also known as the dark fleet, includes as many as 900 vessels, largely focused on transporting Russian oil to world markets employed to bypass international sanctions. The vessels routinely avoid mandatory inspections, change their names and flag registrations. The identity of owners is often unknown, supported by a specially chosen opaque ownership structure. The emergence of the 'dark fleet', vital for Russia to continue its oil exports, circumventing the price caps and other restrictions imposed by the West, is angering conservationists who refer to the fleet as "accidents waiting to happen" as well as those committed to ensure that sanctions punish, penalise and restrain Russia for its invasion of Ukraine, with the aim of securing a change of behaviours. The goals include to halt the flow of money into the Russian government, its key industries and the military and to ensure that the world economy's reliance on oil is not adversely affected, encouraging oil supplies from non sanctioned countries. In addition to the price cap which barred shipping companies and insurers from involvement in Russian crude exports above $60 to reduce Russia's oil revenues, the latest curbs are aimed to strike at the heart of the shadow fleet.
Port Access Ban
The EU has barred tankers from accessing European harbours and services, aiming to disrupt their operations and complicate logistics for Russia. The package blocks access to EU ports and bans EU based entities from providing services for vessels that "contribute to Russia's ability to wage war against Ukraine". It is prohibited following a transition period of nine months to reload services of Russian LNG in the EU territory for the purpose of transhipment operations to third countries. The rule covers reloading operations, ship to ship transfers and ship to shore transfers. The restrictions apply to tankers that carry Russian oil and fuels while engaging in practices that are inconsistent with international shipping standards (concealing the origin of crude through trans-shipping on the high seas, disabling transponders and falsifying documentation). The EU has banned 27 vessels and has pledged to update the list regularly.
Eleven crude oil carriers and five oil product tankers are specifically targeted including ANDROMEDA STAR, NS LOTUS and CANIS POWER. The fifteen year old tanker ANDROMEDA STAR, for example, collided with an unnamed ship off the coast of Denmark on 2 March according to comments from the Danish Maritime Authority. The ship had been scheduled to load Urals crude oil at Primorsk on 4 March 2024. The vessels such as ANDROMEDA STAR were frequently involved in ship-to-ship transfers of oil products often lack the necessary certification and pose environmental hazards due to their deteriorated condition. These and other vessels are designated for a number of reasons including the transportation of LNG components or transhipments of LNG, the transport of stolen Ukraine grain and the transportation of Russian military equipment. Recent port inspections of these newly sanctioned vessels have uncovered hull damage impairing seaworthiness, lack of insurance cover in the event of oil pollution damage with specific concerns over structural integrity in fuel tanks. Both EU individuals and entities are required to undertake their best efforts to ensure that their foreign subsidiaries do not participate in any activity that undermine the sanctions. The efforts to bring down the dark fleet have been intensified by the UK's recent announcement of sanctions on vessels including OCEAN AMZ, CANIS POWER, ROBSON. NS LAGUNA, LADY R and ANGARA as well as Ingosstrakh, a major Russian insurer for the shadow fleet, under the Russia (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/855). This strategic move aims to dismantle the financial and logistical support essential for operation of these vessels. By targeting Ingosstrakh, the UK aims to stop the provision of insurance cover for these shadow fleet vessels which was largely supplied by Ingosstrakh, making it considerably more challenging for these ships to access ports and continue their deceptive practices.
The EU's 14th sanctions package and its targeting of the shadow fleet represents a continuing escalation in the West's programme of promoting peace, democracy, respect for human rights and the rule of law. By focussing on sanctioning Russia's oil production, governments are demonstrating a united front in the face of the ongoing aggression, and a commitment to peace, security and sovereignty of Ukraine. The 14th sanctions package allows Western governments to respond to geopolitical challenges and pressures that go against core values and objectives.
