Fraudulent flags: Growing challenge for maritime safety

The number of ships registered with a fraudulent flag is growing, adding to safety concerns around vessel operations. 

S&P Global Market Intelligence has been tracking fraudulent flags since 2015. The 12 months to January 2025 have seen a spike in registrations: More than 120 vessels were moved to a flag that is being misused, bringing the total of fraudulently registered ships to 223. The state of Guyana was targeted for these fraudulent registrations. In the past 10 years, on average, 10 vessels were registered under fraudulent flags every year. 

Around 100 of these 223 vessels, with most vessels being tankers, have been sanctioned by the US Office of Foreign Asset Control (OFAC) for reasons relating to global terrorism alleged to have been executed by Russia and Iran. This includes Red Sea attacks by the Houthis as well as shipping Iranian and Russian oil, circumventing sanctions as well as the 2022 G7 oil price cap.

S&P Global Market Intelligence defines a fraudulent flag as any vessel which transmits, broadcasts, displays, or otherwise engages in the misuse of flag details, which are confirmed by the authorized flag administration as not being legally registered under the flag in question.

With these vessels being involved in ship-to-ship transfers of oil, they will not regularly call at a port where the vessel could be inspected by port state control (PSC). Instead, sanctioned vessels will collect oil from Russian ports and then transfer it to vessels with a cleaner ownership and track record to deliver it to its final destination. 

This makes the tracking and quality control of ships’ papers and conditions onboard hard to track and verify. This is evidenced by the fact that only around half of those 223 ships have been seen on AIS at the time of writing, our analysis shows. Of those, around 40 are sailing in the Red Sea around the Al Basra and Fujairah oil terminals. 

With an average age of 27 years, the fraudulently flagged vessels are also twice as old as the general merchant tanker fleet, which increases the potential of machinery failures. 

Tracking fraud: Targets and proposals

There is a distinct lack of ways to track these vessels as they disappear from AIS and do not regularly call at ports. Still, 10% of these vessels were inspected in Q4 2024 when they were already flying a fraudulent flag. Seven were detained to ensure pollution prevention measures on board as well as to make good deficits to do with fire protection of loaded dangerous goods. None were in relation to the fraudulent registration.

This can be explained by at least three factors: One, there is no mandatory requirement to have a flag state deletion certificate onboard, showing when a ship was removed from a flag state. This information is also not publicly available. 

Most of the fraudulent flag registration certificates that have been examined by the S&P Global Market Intelligence Ships in Service team say that they are provisional. In the inspection records, the fraudulent flag is not mentioned. Instead, the Black Sea and Tokyo MoU where ships were inspected state the flag without the addendum of it being fraudulent. 

It is port state control’s responsibility to check the flag state registration records thoroughly as it might be one of the few times a ship comes under scrutiny while in operation. This was also confirmed to S&P Global Market Intelligence by one of the Asian port state control secretariats.

In March 2025, the IMO Legal Committee will discuss a submission by representatives of the UK regarding measures to prevent unlawful practices associated with the fraudulent registration of ships. Both mainland China and Singapore, where those sanctioned and fraudulently registered ships were detained, are supporters of the working group. 

The working group’s main advice to flag states is to exercise due diligence around validating documentation when registering a ship. 

Crew abandonment cases quadruple since 2019

Other than those illegal activities, since 2021, 30 of those now fraudulently registered ships have also been involved in maritime incidents. While in the years before, most of those incidents related to collisions or machinery defects, around half of the incidents since then involved the abandonment of crew.  

This development is in line with an overall increase of crew abandonment cases being reported, according to S&P Global Market Intelligence Maritime Intelligence Risk Suite. Since 2019, the number of logged incidents has quadrupled.   

Hotspots for crew abandonment include the Turkish and Red Sea west coast, as well as the United Arab Emirates and Persian Gulf.   

Finding a better way: Due diligence on fraudulent registrations

To counter the misuse of flags, S&P Global Market Intelligence recently adjusted the way it records fraudulent flag registrations of sanctioned ships. From observing AIS signals of those vessels, it became clear that a growing number of vessels were still broadcasting flag details of a flag state they had been deleted from several weeks or months ago. While this number represented less than 10%, also considering that not all vessels regularly broadcast their position, proactive action was taken to curb this development.  

This is designed to raise awareness on both sides: to call out the registered owner and make it clear that they can’t hide away under the cover of an established flag state and to the flag state, to ensure that they tell S&P Global Market Intelligence of any deletions as quickly as possible as most states do not want to be affiliated with sanctioned ships.  

This change was discussed with a range of flag states who confirmed that vessels should manage to register with a new flag days after their deletion – unless issues such as with banks or around ownership arise.