Gitanjali Patel

Gitanjali Patel 

Posted Thursday November 21, 2013

Here be dragons


Despite (or perhaps because of) a heavily corrupt royal family and a lack of law enforcement, just over a decade ago tens of thousands of foreign-owned ships flew the Tongan flag. Registering in a jurisdiction like Tonga, with lax regulations and restrictions on crewing and ship construction, allow ships the freedom and flexibility of fewer inspections, the ability to choose their own crew, and pay less tax. It also provides a perfect environment for illegal or unethical practices, where prosecution is difficult and most crimes go undetected. In the case of Tonga, large numbers of foreign-owned ships were found to be involved in terrorist and other illegal activity which led, somewhat dramatically, to the dissolution of its shipping registry in 2002.

Shipping is a highly international industry – one of the “threads that bind our world together” according to investigator Jim Mintz, founder of consultancy the Mintz Group – that is fraught with corruption and conflicts of interest. Mintz says that along with aircraft registries, shipping registries “should be in every investigators handbook.”

International shipping is a huge topic, dating back to the Phoenicians. It involves assets that are highly mobile, hugely valuable and hard to regulate, and not set up for the modern age of internet transparency.

Finding and interpreting shipping information is therefore a complex task: its international nature means that although there is a vast amount of information available, it is often hidden behind paywalls, not available online, or limited in detail. In this post we look at:

  • flag states and why you should care about them
  • investigating vessels and their owners using official and unofficial registries
  • using inspections data to locate ships and identify potential issues
  • locating ships physically using publicly-available AIS data

Flag states and risk indicators

Although shipping data cannot always indicate risk, a ship’s flag can serve as a risk indicator. Crime, substandard working conditions and environmental damage are rife amongst flag states with ineffective regulation enforcement. Companies that flag their ships predominantly or exclusively in low-quality jurisdictions (Marshall Islands, Panama, Liberia, etc) can be judged to pose a higher risk than those who allow themselves to be regulated by countries with strong regulations, labour practices and legal systems.

Although less regulation seems like an unqualified boon to ship operators, flag states such as the Marshall Islands are therefore much less likely – and able – to jump in and provide support when a ship becomes the source of an international incident (unlike the Netherlands, which is currently engaged in a full diplomatic spat over its Greenpeace ship, recently arrested in Russia).

Investigating vessels and their owners

There’s no single way of finding a vessel’s home registry that is 100% reliable. International sources are good but coverage can be incomplete. The main sources we find useful are:

In our last blog post about finding information on non-profits, we saw that the most valuable sources of information were typically found in official government registers or tax administrations. This is not the case with shipping information.

In terms of official information published by countries as opposed to commercial providers, availability is mixed. Data is often not helpful or obscured by a lack of uniformity and access restrictions, which make leads hard to follow. When searching shipping registries an investigator therefore needs to be open to searching a wide range of sources to find information on a vessel or its owner. In order to support this, the research team at Arachnys is continuously incorporating worldwide open data shipping sources to enable our customers to use our platform to run the multiple simultaneous searches across different registries.

National registries by comparison vary greatly in the amount of detail they offer and information is often limited in the regions where it is most valuable to an investigator. Although Panama is the world’s largest flag state, its International Ship and Port Facility Security (ISPS) certificate search offers little more than verification of the ship’s IMO number. On the other hand, India and Vietnam list the vessel’s registered owner, along with contact details, in their registries.


Other databases of interest

Where some governments maintain a national register (USA, India, Hong Kong), others publish different types of information such as a list of ships that are in port (Tunisia) or lists of suspended or withdrawn vessels (Ukraine). Several regional Memoranda of Understanding (MoUs) have also been signed to establish Port State Control, where lists of detained or suspended ships are available on their websites (Paris MoU, Tokyo MoU). Depending on the level of detail required, there are fantastically detailed databases available covering topics like cruise ship sanitation (courtesy of the USA’s CDC).



Physically tracking ships

Locating or tracking a ship is, superficially at least, extremely easy using freely available online resources. Publicly available AIS receiver stations allow sites like Marine Traffic to plot current and historic vessel locations. It is possible, in theory at least, to see whether a given ship has called at a high-risk port such as Bandar Abbas in Iran.

There are a couple of caveats here. First, the reliability of the AIS technology used for tracking is now questionable after the system got hacked last year. Second, it has always been possible for ships to simply switch it off.

Information like this can be useful to investigators who are tracing assets. Let’s just imagine that you are a hedge fund chasing a government to make good on your defaulted debts from a decade ago. Imagine you could track the ship anywhere it goes in the world…

This is precisely what a hedge fund did last year in a high-profile attempt to force the Argentine government to pay up on some debts dating back to the country’s 2001 financial collapse. We can now see the ARA Libertad is safely home in Buenos Aires:


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