In order to "squeeze" Russia's shadow fleet, sanction pressure must be systemic and global. It is important to strengthen control over oil transshipments in the open sea and limit the access of such tankers to ports and services in third countries.
This was reported to UNN journalist by Vladyslav Vlasiuk, the Commissioner of the President of Ukraine for Sanctions Policy.
How to combat Russia's shadow fleet
To "squeeze" Russia's shadow fleet, sanction pressure must be systemic and global. Restrictions are needed not only against vessels and owner companies, but also against insurers, classification societies, port agents, and traders who enable these schemes. It is important to strengthen control over oil transshipments in the open sea and limit the access of such tankers to ports and services in third countries.
Vlasiuk noted that it is worth working separately with "flag of convenience" states, forcing them to remove from registers vessels involved in smuggling.
Our international sanctions group has already provided concrete proposals regarding these steps, as has KSE, and it is important that partners begin to implement them consistently.
Reference
Flags of convenience are countries that provide conditions for registering foreign vessels under their trade flag to avoid strict rules and sanctions.
Threat from Russia's shadow fleet
Russian occupiers have learned to bypass sanctions thanks to the shadow fleet. Hundreds of tankers change flags, transship oil in the open sea, and disable identification systems. Vessels are used to transport oil, gas, weapons, etc.
Vessels of Russia's shadow fleet are often registered under flags of countries that have lenient conditions for avoiding international sanctions. The most common among them are Panama, Liberia, Cook Islands, Malta, and Saint Kitts and Nevis, where the registration process is simplified. Vessels from Iran and Venezuela, which have experience in circumventing sanctions, are also involved.
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Context
President Volodymyr Zelenskyy stated that Russia's shadow fleet needs to be completely squeezed.
There are secondary sanctions, tariffs, sanctions on some companies. We need to completely squeeze the shadow fleet, it hasn't been squeezed yet, although good steps have been taken, but there is still a lot to work on there.
In early August, the President of Ukraine announced that a package of sanctions had been applied against the captains of the Russian shadow fleet. The "Captains of the Shadow Fleet" package provides for sanctions against 94 captains who transported Russian oil bypassing the price cap, and five companies — operators of this fleet.
In late July, the US imposed sanctions against more than 50 individuals and vessels associated with an Iranian shipping network. The network transports oil from Iran and Russia, generating billions of dollars in profits.
Andriy Yermak, Head of the Presidential Office, announced today, September 3, that the US has taken another important step to increase pressure on those who help Russia and Iran circumvent sanctions.
On September 2, the US Department of the Treasury imposed full blocking sanctions against a network of companies and maritime vessels involved in smuggling Iranian oil disguised as Iraqi. An Iraqi-Chinese businessman residing in the UAE is behind these schemes.
Yermak explained that this network generates hundreds of millions of dollars annually and directly works in the interests of a state sponsor of terrorism. Now, 7 companies and 9 tankers involved in the scheme are under US sanctions.
This is a clear signal: any attempts to help Iran or Russia circumvent sanctions are doomed. Every dollar received from the "shadow fleet" or smuggling will be blocked.