More Than 220 Ships Falsely Registered Under Fraudulent Flags, Doubling In 2 Years

The number of ships falsely registered under fraudulent flags has increased, doubling in less than two years which has raised serious concerns about maritime safety, security, and environmental protection.

According to a report submitted by the UK to the International Maritime Organization (IMO), over 220 ships are now falsely flagged, compared to 100 vessels two years ago.

Fraudsters are exploiting underfunded maritime authorities and geopolitical instability to keep substandard and sanctioned vessels in operation.

These vessels often use fake documents to claim they are registered with legitimate flag states or are linked to fictitious registries that fail to verify ships and their owners properly.

Oil tankers and cargo ships make up the majority of falsely flagged vessels. Many have been involved in illegal activities such as sanctions evasion, high-risk ship-to-ship transfers, and switching off their Automatic Identification Systems (AIS) to avoid detection.

The issue has worsened due to geopolitical tensions, which have forced shipowners to switch flags, a practice known as flag-hopping, to evade sanctions.

Smaller and lesser-known flag states have seen a sharp rise in vessel registrations, with Sao Tome and Principe reporting a 385% increase in one year, Tanzania seeing a 130% rise, and the Cook Islands registering a 40% increase.

The UK report reveals that many flag states lack the resources to conduct proper checks on ship registrations. Some states outsource their registry operations to private companies, which has contributed to the problem.

For example, Guyana recently reported that vessels were falsely registered under its flag despite operating a closed registry system.

The IMO also raised concerns about an Indian company, Aryavart Corp, which previously managed Guyana’s registry and was found attempting to set up other registries after losing its contract in 2021.

Similarly, Tuvalu warned about fraudulent websites offering ship registration services in its name, despite its registry being outsourced to Singapore two decades ago.

The rise in fraudulent registrations poses a significant threat to the global shipping industry. According to the UK-led submission, fraudulent flags compromise maritime safety, environmental standards, and the well-being of seafarers.

The report states that some ships have been found using two false flags within a single year.

In 2015, an investigation revealed that 73 out of 84 vessels claiming to be registered with the Democratic Republic of Congo (DRC) were falsely flagged. A 2020 study warned that delays in addressing fraudulent registrations risked the legal framework of international shipping.

The IMO is now exploring ways to tackle the issue. The UK, supported by 21 other countries, has proposed guidelines to help smaller and developing flag states improve their registration practices.

These guidelines include better due diligence, increased transparency in ownership structures, and enhanced information sharing between flag states.

China has also called for a centralised database to track fraudulently registered ships and fake registries. Meanwhile, some countries have urged registries to collect more detailed information about the beneficial owners of vessels to prevent fraud.

Sanctions and geopolitical instability have contributed to the growth of a shadow fleet of vessels operating under fraudulent flags. In December, Guyana identified tankers falsely registered under its flag, particularly those involved in transporting Iranian oil, which is under U.S. sanctions.

Flag states have been urged to take responsibility for ensuring that ships registered under their flags comply with international standards. The IMO is working on new tools and systems to help flag states combat fraud and improve compliance.

Reference: Splash 247

Source: Maritime Shipping News