Flags of inconvenience - noose tightens around Iranian shipping - Reuters
FILE PHOTO: Iranian oil tanker Grace 1 sits anchored after it was seized earlier this month by British Royal Marines off the coast of the British Mediterranean territory on suspicion of violating sanctions against Syria, in the Strait of Gibraltar, southern Spain July 20, 2019.
REUTERS/Jon Nazca/File Photo
Somewhere on its journey from the waters off Iran, around Africa’s southern tip and into the Mediterranean, the Grace 1 oil tanker lost the flag under which it sailed and ceased to be registered to Panama. Iran later claimed it as its own.
The ship carrying 2 million barrels of Iranian crude was seized by British Royal Marines off Gibraltar, raising tensions in the Gulf where #Iran detained a UK-flagged ship in retaliation.
Grace 1 remains impounded, not because of its flag but because it was suspected of taking oil to Syria in breach of EU sanctions, an allegation that Iran denies.
Yet Panama’s move on May 29 to strike it from its register mid-voyage was part of a global squeeze on Iranian shipping.
Nations that register vessels under so-called “#flags_of_convenience” allowing them to sail legally have de-listed dozens of tankers owned by Iran in recent months, tightening the economic noose around it.
In the biggest cull, Panama, the world’s most important flag state, removed 59 tankers linked to Iran and Syria earlier this year, a decision welcomed by the United States which wants to cut off Tehran’s vital oil exports.
Panama and some other key flag states are looking more closely at the thousands of ships on their registers to ensure they comply with U.S. sanctions that were re-imposed against Iran last year and tightened further since.
A Reuters analysis of shipping registry data shows that Panama has de-listed around 55 Iranian tankers since January, Togo has de-listed at least three and Sierra Leone one.
That represents the majority of its operational fleet of tankers, the lifeblood of the oil-dominated economy, although Iran may have re-registered some ships under new flag states.
When a vessel loses its flag, it typically loses insurance cover if it does not immediately find an alternative, and may be barred from calling at ports. Flags of convenience also provide a layer of cover for a vessel’s ultimate owner.
International registries charge fees to ship owners to use their flags and offer tax incentives to attract business.