Several ships with fake insurances have been ordered to immediately cease operations and anchor.
This follows Danwatch and Norwegian NRK’s investigation into the Norwegian company Ro Marine, which, despite being an empty shell company with no operations or employees, has issued false insurance papers for hundreds of ships, at least 70 of which are believed to belong to Russia’s shadow fleet. A total of 21 of the vessels are also sanctioned by the EU.
The fraudulent Norwegian company is now blacklisted in at least seven countries across the globe as a result of the revelations.
In addition to the Cook Islands, which has ordered several ships to cease operations, Liberia, the world’s second largest flag state, as well as flag states Barbados, San Marino, Dominica, Guinea-Bissau and Togo have all canceled Ro Marine’s authorization.
A flag state is the country in which a ship is registered and which is responsible for ensuring that the ship meets basic safety requirements, including having valid insurance.
All seven flag states are also asking all ships with Ro Marine insurance sailing under their flag to immediately find a new insurer that complies with international law. The countries reacted swiftly after Danwatch and NRK reached out for comment.
“We do our diligent work, but we do not have any expertise to identify counterfeit documents, so we are very happy you have contacted us,” Giovanni Ciniglio tells Danwatch and NRK.
He is the head of the Barbados Maritime Ship Registry and explains that the flag state had approved Ro Marine as an insurer based on what they believed was a document from the Norwegian Financial Supervisory Authority.
“Now we understand it is a forged document,” says Giovanni Ciniglio.
“Thank God nothing serious happened,” he adds.
Similar messages are heard from other flag states that until now have had Ro Marine on the list of approved maritime insurance providers.
“The approval relied upon what we now understand are forged and therefore fraudulent documents,” says Tiphanie Pito from Maritime Cook Islands, which manages the Cook Islands flag register.
Danwatch and NRK have reached out to Ro Marine and asked a number of questions for this article, but no one has answered our inquiries.
Does Denmark have the right to stop vessels?
Although many flag states have cancelled Ro Marine’s licenses, new ships appear almost daily on the fraudulent company’s website with details of newly issued insurance policies.
Since Danwatch and NRK first exposed Ro Marine’s fraud, Reuters has also covered the case, and the news agency has managed to get a comment from Ro Marine. The company explains that any new ships being added to its website is due to a technical error. However, they do not explain why the ships being added to their database seemingly have insurance policies that are newly issued with current and future coverage.
Several of the newly added ships apparently covered by Ro Marine belong to the Russian shadow fleet, and at least two of them have since sailed through Danish waters carrying upwards of 100,000 tons of oil each. Danwatch and NRK have seen no evidence that the two ships were insured properly or underwent safety checks before sailing through Denmark.
The case is without precedent, says Kristina Siig, Professor of Maritime Law at the University of Southern Denmark.
“A ship sailing without these oil certificates is way out of line. In principle, it’s illegal for the ship to sail. If the ship is in Danish waters, I believe the Danish authorities have the option of telling it to anchor and remain in place. But whether they’ve tried to do that before, I simply don’t know,” she says.
However, the Danish Maritime Authority has no intention of stopping any ships. They do not believe it is possible within the international treaties.
“Ships that only pass through Danish straits do not call at Danish ports or non-land-based berths, and therefore there are not sufficient conditions for Denmark to order the ships to stop,” the agency said in a response to Danwatch and NRK.
At the same time, the Danish Maritime Authority emphasizes the responsibility of flag states not to allow ships to sail without valid insurance.
“It is positive, as we have noted from Danwatch and NRK’s information, that several flag states have already complied with this obligation and stopped their ships.”
Flag states should improve due diligence
Independent analyst Michelle Bockmann, an expert in deceptive shipping practices and the shadow fleet, has previously covered suspicious activity around the company Ro Marine and follows the latest revelations closely.
“For coastal states, there’s now a recognition of the dangers posed by having marine insurers like Ro Marine issue Blue Cards for tankers transiting their waters,” she says.
“Ro Marine should serve as a wake-up call for international shipping and lead all flag authorities to reexamine those marine insurers they currently recognise.”
She explains that the proliferation of the Russian shadow fleet as a consequence of Western sanctions against Russia has meant that many shady companies have seen an opportunity to make money from the sanctions-evading trade.
According to Michelle Bockmann, this has led to more examples of suspicious and invalid insurance policies like those issued by Ro Marine. At the same time, it’s something that flag states can also make money from, she says.
“This growth brings greater responsibilities, increased levels of technical competence and regulatory compliance– and this is where [the flag states] have been found wanting,” she says.
It is the responsibility of flag states to thoroughly check documentation that insurance companies have permits and finances in order, so coastal states like Denmark do not end up with an oil disaster and no money for the clean up.
Just last week, the International Maritime Organization (IMO) discussed the issue of fake paperwork and fraudulent ship registration. Danwatch and NRK tried to get a comment from the IMO for this story, but it was not possible before publication.
Fooling NATO countries with fake paperwork
Danwatch and NRK have identified more than 250 ships to which Ro Marine has allegedly issued false insurance policies, at least 70 of which, according to Lloyd’s List Intelligence, belong to the Russian shadow fleet.
Four people associated with Ro Marine have been charged with operating insurance business without a license and document forgery. Two key figures, the Russian owner and a Bulgarian national, are also under investigation for circumventing Western sanctions against Russia, according to Danwatch and NRK’s information.
Many of the vessels regularly sail through Denmark and the Baltic Sea, often loaded with hundreds of thousands of barrels of oil. Using the fake insurance papers, they have managed to fool Finnish and Danish authorities who carry out inspections on old and worn-out ships on behalf of a coalition of 12 NATO countries.
In an email to Danwatch and NRK, the Danish Maritime Authority states that the Finnish authorities have so far met 8 vessels that have presented insurance policies from Ro Marine upon inspection. After the revelation of Ro Marine’s fraud, the agency decided to go to the ships’ flag states for an explanation.
“The information from Danwatch and NRK about RO Marine prompted the agency to take the matter further, including contacting the Liberian flag state administration, where RO Marine was listed as an approved insurance provider.”
The Danish Maritime Authority also writes that Liberia, the world’s second largest flag state, withdrew its approval of Ro Marine as an insurance provider on March 28 – three days after Danwatch and NRK revealed the fraud.
“It’s disturbing that this can happen”
If an oil ship were to sink and cause an environmental disaster, the insurance company would initially have to pay for the cleanup. However, it is also possible for countries like Denmark to receive compensation for other losses of income from, for example, fishing or tourism.
This is done through the International Oil Pollution Compensation Fund (IOPCF), which consists of 121 member countries, including Russia. Here, news about the fake insurance policies comes as a shock.
“It’s disturbing that this can happen, even in a country as well-regulated as Norway. It’s quite special. Norwegian companies basically have a lot of credibility abroad, and it is very regrettable that this trust has been abused,” says Gaute Sivertsen, head of IOPCF.
“We depend on the insurance being real. Otherwise, we have to pay from the first penny if an accident occurs in a member state,” he says.
Despite repeated attempts, the Russian owner of Ro Marine has not yet responded to Danwatch and NRK’s inquiries.
