In a sign that sanctions against Russia over the war in Ukraine may be starting to bite, Russian tankers transporting oil and petroleum products are shutting down systems that broadcast their identity and location, a practice known as “getting dark” “and which is often associated with attempts to evade sanctions.
In the days and weeks after Russia invaded Ukraine, the United States and a broad coalition of other countries imposed comprehensive sanctions on Russian goods, including petroleum products. Experts say that by going dark, ships can unload cargo, often via ship-to-ship transfers at sea, without attracting the attention of law enforcement agencies.
According to data collected by Windward Ltd., an Israeli firm that uses artificial intelligence to assess maritime risk, the number of incidents of Russia-affiliated ships going dark daily has increased dramatically since the imposition of sanctions.
This is especially true with regard to tankers transporting Russian crude oil. Prior to the raid, Windward tracked down two or three incidents a day from tankers loaded with Russian crude oil deactivating their identification systems. It now documents about 20 a day.
“We are seeing a synchronized effort on Russian shipping and trade to systematically hide where their cargo goes,” Windward CEO Ami Daniel told VOA.
This is not to say that the practice of “getting dark” is dictated by the Kremlin. The ships in question are almost all privately owned and not technically accountable to the government in Moscow. Neither the Russian government nor the various companies owning the ships in question have issued public statements on the practice.
Automatic identification system
A treaty, known as the International Convention for the Safety of Life at Sea, requires large ships to have an Automatic Identification System (AIS) in place at all times, with a few specific exceptions. The AIS provides the vessel’s name, course, speed and other information to other ships and coastal authorities.
“AIS should not be turned off, as a general matter,” attorney Neil Quartaro, a partner in the trading and transportation group at law firm Cozen O’Connor, told VOA.
Quartaro said the few exceptions include areas where broadcasting details about a ship’s speed and rate could pose a safety risk.
“The primary area where it is acceptable to turn off your AIS is in something called the ‘high-risk area’, which is essentially the area along the coast of Somalia,” Quartaro said. Pirate activity is common in that region, as well as a few other places around the world, where cargo ships have been boarded and crews have been detained for ransom.
Quartaro said it was not uncommon for ships trying to evade sanctions to turn off their AIS equipment while, for example, carrying out a ship-to-ship transfer of crude oil that originated in a sanction country. not.
“If you work in the Gulf of Mexico, and you are anywhere near Trinidad and Tobago or Aruba, and you turn off your AIS, anyone watching it will suspect that you are involved in an illegal oil shipment from Venezuela. , which happens all the time, ”Quartaro said.
Similarly, he said, it is common for empty tankers to leave a port in the Middle East, turn off their AIS equipment and then reappear a few days later with a load of crude oil en route to Pakistan. In such cases, he said, the oil probably originated in Iran, which is under heavy sanctions.
Misleading shipping practices
In 2020, the U.S. Department of State and Treasury, as well as the Coast Guard, issued an opinion that included seven different shipping practices that were characterized as “fraudulent” and associated with illegal shipping and evasion of sanctions.
No. 1 on the list disables or manipulates AIS equipment.
“While safety issues can sometimes lead to legal deactivation of AIS transmissions, and otherwise prevent poor transmission, vessels involved in illegal activities can also intentionally deactivate their AIS transponders or manipulate the data transmitted to mask their movement,” warned the adviser.
Other deceptive practices include falsifying registrations and cargo manifestos, creating deliberately complex ownership structures, and making unscheduled stops and detours.
Sign of desperation
The potential disadvantage of fraudulent shipping practices is significant, suggesting that willingness to engage in them may be a sign of desperation.
Large companies with significant business interests in the United States, for example, do not want to be caught in an investigation into sanctions evasion. For this reason, they pay companies like Windward to identify vessels that engage in suspicious activity, to prevent them from doing business with them in the future.
However, the importance of oil exports to the Russian economy may make some shippers more willing to take risks.
Russia’s exports of petroleum products are a major contributor to the economy. In 2021, according to figures released by the Russian central bank, the country took in $ 490 billion from petroleum sales. Crude oil accounted for $ 110 billion of the total, and other oil products accounted for an additional $ 69 billion.
Daniel, from Windward, said his company expects to see Russian shippers look for additional methods to circumvent sanctions in the near future.
“We expect Russia to adopt many of these deceptive shipping practices, and not just in the tanker segments. Across all segments, due to the great pressure they are under,” he said.