Much like a gambler hatches a new plan to fool the casino, Russia’s merchant fleets have begun conducting naval operations under the radar, despite international sanctions.
Russian oil tankers have disabled their onboard automated identification systems (AIS) – in so-called dark activity – to circumvent international sanctions imposed by the country’s invasion of Ukraine. (Photo: GRID-Arendal, Flickr, License)Russian oil tankers have disabled their onboard automated identification systems (AIS) – in so-called dark activity – to circumvent international sanctions imposed by the country’s invasion of Ukraine.
Expert opinion warns that this development could potentially change the way maritime trade is conducted and enforced around the globe.
“We are in a very rapid phase of transition from what was to what it will be,” said Dr. Ian Ralby, founder and CEO of IR Consilium, an American firm specializing in maritime law and security, told OCCRP.
With Russia cut off from international markets, its merchant fleets could seek to ramp up sanctioned operations and resort to non-traditional payment methods, laying the foundation for a bookless economy, Ralby said.
With Western buyers no longer able to use conventional payment mechanisms with the Russian shipping industry for fear of detection, Ralby predicts that “we are likely to see a surge in both cash payments and other non-traditional payment mechanisms, including cryptocurrencies.”
And to add another layer of discretion, Ralby says companies sanctioned by Russia could potentially operate under a different name or even a different flag to make it harder for authorities to trace their activities back home.
Meanwhile, potential new buyers now have the opportunity to enter into a marriage of convenience with Russia where none existed before.
For example, countries that are also heavily sanctioned by the West, such as Iran and North Korea, are now on a similar footing as Russia; they therefore benefit from a significantly lower risk/return ratio when doing business with one another.
“This is where I think we’re likely to see a parallel global economy of sanctioned states, as well as what we have right now, which is the kind of legitimate and illegitimate global economies,” Ralby said. “We’ll likely see a whole third ecosystem emerge.”
And for non-sanctioned companies, the willingness to work with sanctioned states like Russia can be a lucrative opportunity worth the risk, as the scrutiny and consequences of discovery give buyers more leverage to negotiate favorable terms can give.
Essentially, “they can actually earn more than they would in the legal economy by demonstrating their willingness to work and work with the economies that can’t work with everyone else,” Ralby told OCCRP.
Such enticements need not be offered exclusively in the shadows, either, if the buyer is not bound by a particular country’s sanctions. Last month, according to Bloomberg, Russia attempted to mitigate its crude oil losses to the West by offering India rebates of up to $35 a barrel.
White House Press Secretary Jen Psaki noted that while each country has “different economic reasons” for doing business with Russia, she stressed that “the rest of the world is watching where you stand on this conflict be it any form of support for Russia as they are illegally invading Ukraine.”
Like organized crime, dark activity is not localized to a single country, region or body of water, and Ralby suggests that efforts to counter it must therefore be just as fluid and interconnected.
“What we need to do is increase awareness of the global maritime space, to study the global fleet, movements and activities of ships around the world,” he explained. “Because if we’re not watching globally, we’re probably missing out.”
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