The darker the merrier: do sanctions entail the IMO system collapse?

- Numerous sanctions against major exporters (Russia, Iran, Venezuela) entail the expansion of so called shadow shipping. According to Splash, the shadow tanker fleet operating in the world exceeds 400 units. “Dark ships” switch off their identification systems and change class from the Western societies to those of friendly Asian countries (China, India, etc.). Besides, sanctioned ships have to be serviced by less reliable insurance and re-insurance companies, and clubs, with policies not universally accepted.

The situation when a fleet servicing an essential part of the global commodity trade is actually excluded from the system of global regulation of shipping under UN (via IMO) creates numerous risks of noncompliance with the standards established by this system. For example, when it comes to the use of certain types of fuel and regular evaluation of the state of ships, the risk of incidents increases. At the same time, the insurance problems pose higher risks of consequences that may be not covered by the available policies.

The longer and the more the sanctions are (and they can be imposed on China, the world’s largest economy), the less sense is in IMO and its regulations as a considerable part of the global fleet will go “dark”. It actually means the collapse of the international shipping system developed over the recent decades. In this case, another center of regulations can appear and come into collision with the first one by using its own rules and standards, classification societies, insurance and financial institutions supported by the interested parties affected by the sanctions.