The global maritime industry is witnessing a concerning rise in illicit activities orchestrated by “dark vessels” that manipulate their locations to engage in smuggling and sanctions evasions. These activities, including the falsification of vessel positions to evade price caps on Russian oil, covert operations in Venezuelan waters, and unauthorized trading in goods like grain from Ukraine, are costing billions of dollars. In this blog, we delve into the issue of dark vessels, the technology employed to detect them, and the economic ramifications of these illicit activities.
The Surge of Dark Vessels:
The CNBC article published on September 26, 2023, sheds light on the growing prevalence of dark vessels involved in illicit maritime activities. Instances of false location reporting by oil tankers and cargo ships have increased by 12% in the first half of 2023, compared to the same period last year. This represents an alarming 82% surge when compared to the first half of 2021.
Evading Sanctions and Price Caps:
Dark vessels are capitalizing on manipulated locations to circumvent sanctions and price controls. The article highlights Russia’s oil industry, where vessels utilize fake locations to surpass the G7’s $60 per barrel price cap on Russian oil. Additionally, covert operations in Venezuelan waters and suspected grain smuggling from Ukraine are among the illegal activities carried out by these vessels.
Maritime technology companies are at the forefront of combating dark vessels. Companies like Windward and Spire employ satellite technology and automatic identification systems (AIS) to identify false location reporting. These advancements play a crucial role in monitoring vessel movements and detecting anomalies.
Illicit shipping activities pose significant economic consequences. The movement of Russian oil alone is estimated to be worth tens of billions of dollars. By considering the scale of oil-carrying vessels and the price of oil, potential losses reach staggering amounts. In this regard, more attention must be given to monitoring and preventing dark vessel operations to mitigate these negative economic effects.
Authorities are becoming increasingly aware of the issue and are taking measures to address it. The article discusses how actions against AIS spoofing and oil smuggling involving Iranian vessels can serve as precedents for future actions against Russian sanctions evasions. Additionally, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has issued alerts to raise awareness among companies and recommend the use of maritime intelligence providers to detect manipulation.
The Role of Technology and Insurance:
Advancements in technology have made it easier to detect AIS manipulation. Methods such as switching off AIS transponders, manipulating GNSS data, and software hacks can all be used to falsify vessel locations. The insurance industry is encouraged to pay attention to these activities, as they can have implications for coverage. Vigilance and cooperation between technology providers, insurers, and regulatory authorities are vital in combating dark vessel activities effectively.
The rise of dark vessels engaging in illicit maritime activities by manipulating their locations poses a significant challenge to global maritime security and the enforcement of sanctions. However, advancements in technology, combined with a growing focus on the industry, have improved detection and tracking capabilities. By recognizing the economic implications and collaborating on regulatory responses, the international community can work towards mitigating the impact of dark vessel operations and protecting lawful global trade.
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