EU ports could be required to block any vessel that has engaged in ship-to-ship transfers or switched off location transmissions, as part of a proposed crackdown on Russian sanctions evasion, GTR can reveal. 

In reforms tabled by the European Commission last month, lawmakers express concern over a “sharp increase in deceptive practices… by vessels transporting Russian crude oil and petroleum products”. 

The commission has proposed to prohibit access to ports for any vessel suspected to have loaded Russian oil directly from another tanker, or that “illegally interferes, switches off or otherwise disables its automatic identification system”. 

The measures would also target countries suspected of helping Russia import restricted products, and prevent dual-use goods from transiting through Russian territory – even if they are not ultimately being delivered there. 

The proposals are currently under negotiation at EU level, as part of the bloc’s upcoming eleventh package of sanctions targeting the Kremlin. 

Reforms follow growing evidence that ship-to-ship transfers and dark activity – where vessels switch off or manipulate location signals – are playing a major part in the movement of Russian oil. 

US authorities issued a warning in April that tankers appear to be loading crude oil, switching off location signals and transferring that cargo to other vessels, leaving western companies at risk of unwittingly facilitating trade in sanctioned goods further along the chain. 

The previous month, the International Maritime Organization described ship-to-ship transfers in the open ocean as a “dangerous practice”, both in terms of sanctions and environmental risk, particularly when involving Russian-linked vessels. 

The European Commission’s proposals target any vessel suspected of carrying out ship-to-ship transfers, either to avoid the EU’s ban on importing seaborne Russian oil or to circumvent the G7’s price cap. 

Ships that have switched off location transmissions would also be banned from ports, unless they did so in keeping with existing international rules, for instance when navigating through areas that present a security risk. 

Sources familiar with the EU proposals say banks and traders would have to consider the risk that a vessel is not allowed to enter a port when engaging in transactions, even if the vessel itself is not deemed high-risk. 

“It will really depend on the law governing the contracts, but there are certainly contractual clauses that need to be negotiated for these kinds of issues,” one source says. 

Analysing vessel behaviour could also provide “quite a challenge” for port authorities, they add. 

In some cases, ports are already closely monitoring suspicious vessel activity. In February, Spanish authorities announced that Singapore-flagged tanker Maersk Magellan had been blocked from entering the Port of Tarragona. 

Port authorities found that the vessel had loaded diesel fuel from another tanker, Elephant, via ship-to-ship transfer. Elephant, in turn, had obtained the cargo via ship-to-ship transfer from Nobel, a tanker that was previously Russian-flagged and owned. 

Despite no accusations it had actually loaded Russian fuel, it was not until mid-April that Maersk Magellan was able to offload the cargo to an alternative buyer and resume normal operations. 


Politically sensitive 

If approved, the proposed sanctions package would also empower the EU to take action against countries implicated in efforts to supply restricted goods to Russia, following findings that goods are effectively disappearing in transit to nations with economic or trade ties to Moscow. 

The Financial Times found that between February and December last year, exports worth more than US$1bn failed to arrive at their stated destinations in Kazakhstan, Kyrgyzstan and Armenia. 

The proposed reforms would allow the EU to ban exports of goods to listed entities outside Russia. 

Sources say the extraterritorial nature of the proposals make them “very sensitive, politically and diplomatically” – though any immediate impact is limited. 

“In the short term, the EU would just create the system allowing it to do this,” one source says. “It’s not necessarily going to designate any countries or products yet.” 

European Commission president Ursula von der Leyen said in May that a tool to apply sanctions outside Russia “will be a last resort and it will be used cautiously, following a very diligent risk analysis and after approval by EU member states”. 

Proposals to ban the transit of a broad range of goods through Russian territory – even when destined for delivery elsewhere – could also create complications for shipping companies, particularly for containerised trade. 

“Shipping logistics is not done on a product-by-product basis,” the source says. “This could create an obligation to find different shipping routes, for instance, if a container on a vessel has one of these products inside. That is going to be quite impactful from a logistics point of view.” 

A spokesperson for the European Commission tells GTR: “Our support to Ukraine goes hand in hand with measures against Russia to react to its atrocities, destruction, looting or kidnapping of Ukrainian children.

“Since this is a process driven by the member states in confidentiality, and discussions are still ongoing, it is not for us to comment on it.”