Why so many ships sail under flags belonging to other nations
The recent tanker attacks along the Strait of Hormuz involved vessels sailing under flags of countries distant from the simmering tension in the Middle East.
Panama and Marshall Islands-flagged ships Kokuka
Courageous and Front Altair, came under attack in the Gulf of Oman last month, while Panama-flagged Riah disappeared in the Strait of Hormuz last week. The National takes a look at why these vessels are caught up in conflict, and why so many of them fly under flags of countries that are not party to tension in the region.
Open-registry system
The global shipping industry is dominated by Greece, Japan, China, Singapore, Norway and the US, with those countries owning the largest fleets. But most vessels rarely sail under the flags of these countries. The most common flags are those of Panama, the Marshall Islands and Liberia. The trio maintains what are called open registries allowing for owners of merchant vessels to register their ships online with ease. The UN Convention on Law of the Sea, ratified in 1982, says that all ships should sail under a country’s flag and all states, regardless of whether they have maritime borders or not, have the right to have ships sail under their flags. To cut costs and have flexible regulations, some of the top shipowners sail their fleets under the flags of countries with an open registry, such as Panama, to avoid paying high wages to seafarers.
‘Flags of convenience’
The term “flags of convenience” refers to those states with open registry systems that allow for ship owners to register their vessel, even if they have no link to the said country. The UN requires the flag under which a vessel sails have some link to the state. But this is not the case for most of the world’s maritime trade. Most shipowners prefer the anonymity provided by sailing under a flag of convenience to protect their identities when sailing in hostile waters. Many ships that sail under such flags also use “flag hopping”, where they change their flags repeatedly to conceal their true identity.
Illegal activities
A major concern for shipping regulators is that flags of convenience also allow for countries under sanctions to trade in contraband or dangerous goods. North Korea has been suspected of using its flag for the transport of drugs and even nuclear weapon fuel after the seizure of one of its freighters by Australian authorities in 2003 for smuggling narcotics. The Panama-flagged Grace 1 tanker, which was seized off Gibraltar by British naval forces was suspected of carrying Iranian crude – which is embargoed under US sanctions against Tehran – destined for Syria.
Strait of Hormuz
Tankers that go through the Strait of Hormuz, which allows for the passage of a third of the world’s seaborne crude, often use flags of convenience to navigate the congested and highly volatile chokepoint. The Stena Impero, which was seized by Iran on Friday is a Swedish vessel under a British flag. Riah, which set sail from Sharjah flew under the flag of Panama, that has since deregistered the vessel for having “deliberately violated international regulations”. The tanker is suspected to have been captured off Iran’s Larak Island, with the country’s Revolutionary Guards releasing video footage matching the vessel’s attributes. Tehran has accused
Riah of abetting illegal fuel smuggling in the Gulf. With increasing tension in the Middle East and higher shipping insurance costs, it is unlikely that ship owners will forgo operating under flags of convenience, further complicating navigation along the world’s most sensitive oil chokepoint.