Two ready for recycling very large crude carriers (VLCCs) are currently anchored off the coast of Chattogram, Bangladesh, facing delays in their sale to ship recyclers due to complications involving letters of credit (L/Cs) and international sanctions.

Both vessels have been identified as part of Russia's so called shadow fleet, a term used to describe ships that operate outside conventional regulations to facilitate the transport of goods, such as oil, in violation of international sanctions. ​

The shadow fleet often employs tactics like disabling automatic identification systems to obscure their movements, engaging in ship-to-ship transfers at sea to conceal cargo origins, and using flags of convenience from jurisdictions less likely to enforce sanctions. ​

Sanctions circumvention

While specific details regarding the activities of the two ships are limited, their designation as part of the shadow fleet suggests involvement in such practices aimed at circumventing international sanctions.

Consequently, financial institutions in Bangladesh are hesitant to process L/Cs for these vessels, fearing potential breaches of international laws and subsequent penalties. ​

Reluctant Indian banks

Indian banks are also reportedly reluctant to process L/Cs associated with vessels thought to be part of Russia's shadow fleet.

This situation underscores the broader challenges faced by the global shipping industry in enforcing sanctions and the complexities involved in regulating maritime activities linked to sanctioned entities.​

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.