In March, an unusually high number of ships abandoned their Russian flags and re-registered with countries such as the Marshall Islands and St. Kitts, according to data provided by maritime risk consultancy Windward AI.
Russian ships in trouble
A total of 18 ships were re-flagged last month, according to Windward, more than three times the normal rate of 5.8. Five of the ships were linked to Russian ownership. Among them are 11 ships from the same fleet, all of which have been changed to the Marshall Islands flag, and three tankers have been changed to the flag of St. Kitts and Nevis.
Five of the 18 ships that changed flags had direct links to Russian owners. The level of Russian re-flagging in March was more than three times the average, the first time since January 2020 that the monthly number of re-flagging reached double digits.
The U.S., U.K. and other allies have stepped up sanctions on Russia due to the Russian-Ukrainian war that began in late February. U.S. President Joe Biden issued an executive order on March 8 banning imports of Russian oil and gas, and Britain also said it would phase out oil imports by the end of the year. In addition, several countries have banned Russian ships from entering their ports.
From yachts as small as multi-million dollar yachts to oil tankers, Russian ships are already in trouble. The identification and position transmission system AIS, which was supposed to be on all the time at sea, has also been turned off because it avoids detection but poses a risk to maritime safety.
But not all flag changes are necessarily sanctions evasion. The trend could also include "honest businessmen trying to continue business as usual without the potential obstacles that the Russian flag could pose for them," the report said.
Gur Sender, product manager at Windward, said foreign companies have different motivations for changing the flag of Russia, some want their ships to be able to operate around the world without restrictions, and that sea freight is an important method of transporting goods, but others are for ethical reasons.
Changes to flags are not necessarily abnormal, and are sometimes due to changes in ownership or area of operation, Sender said. Singapore will have an average of 17 flag changes per month in 2021, while Japan will have an average of 5 flag changes per month this year. But their levels are all stable without big fluctuations.
A large number of Russian flag switches have appeared in other unusual activities, such as Russian tankers shutting down their tracking systems. Both tactics were included in a May 2020 U.S. Treasury Department bulletin that listed seven categories of fraudulent shipping practices.
"Bad actors may forge the flags of their vessels to conceal illegal trade. They may also repeatedly register ('jump the flag') with a new flag state to avoid detection," the advisory warned.
