Malta objects to EU’s new Russia sanctions

Malta, Cyprus and Greece are reported to have once again banded together against the EU’s newest round of sanctions against Russia that have banned tankers that have engaged in the transhipment of Russian oil from EU ports.

Also banned are ships that have switched off their navigation systems to hide the fact they have docked at Russian ports or have taken on fuel from other tankers at sea – a practice reportedly proliferating just outside Maltese waters – to obscure its origins.

It is believed the measure will affect hundreds of tankers and Malta, Greece and Cyprus are reported to have resisted the measure to protect their shipping and flag registration industries, despite international concern that the illicit sale of Russian crude oil is helping fund its war in Ukraine.

This week’s round of new sanctions is the 11^th package imposed on Russia. They mainly aim to address loopholes a shadow fleet of tankers engaged by Russia is using to circumvent restrictive measures.

According to the text of the EU Council’s decision, “Attempts to circumvent Union restrictive measures have resulted in a sharp increase of deceptive practices by vessels transporting Russian crude oil and petroleum products.

“Consequently, it is appropriate to prohibit access to ports and locks in the territory of the Union by vessels engaged in ship-to-ship transfers where the competent authorities have reasonable cause to suspect that a vessel is in breach of the ban on importing seaborne Russian crude oil and petroleum products into the Union or is transporting Russian crude oil or petroleum products purchased above the [US$60] price cap agreed by the Price Cap Coalition.”

The EU is concerned about a shadow fleet of hundreds of ageing tankers carrying Russian oil that were possibly purchased at prices above the $60 per barrel price cap imposed by the G7.

Many of the vessels, owned by a network of shell companies, have adopted the practice of switching off their navigation systems to hide illicit activities tied to the sale of Russian oil.

The Shift reported last December how a Russian oil tanker had been tracked by an NGO plying the waters around Malta in a suspected training exercise for busting EU and G7 oil shipment sanctions imposed against Russia.

The transponder signal of the Russian tanker, the Kapitan Schemilkin, was found to have been tampered with to make it appear as though it was moving in circles around Greece between May and July when, in actual fact, it was moored offshore east of Malta, after which it is suspected of having delivered Russian fuel that it took on board to a power station Northern Cyprus.

The waters around Malta are known to be rife with the practice of ship-to-ship transfers of Russian oil, although it is being done just outside of territorial waters.

The new measures proposed by the European Commission and now agreed upon by member countries, Malta included, will prohibit vessels suspected of such practices from entering EU ports “irrespective of their flag of registration.”

Tankers will also have to notify authorities if they are planning a ship-to-ship oil transfer “at least 48 hours in advance” within specific geographical areas.

According to the new sanctions’ text, “It is also appropriate to prohibit access to ports and locks in the territory of the Union by vessels which competent authorities have reasonable cause to suspect of illegally interfering with, switching off or otherwise disabling their shipborne automatic identification systems (AIS) when transporting Russian crude oil and petroleum products.”

According to research by S&P Global Market Intelligence, 167 tankers have been involved in ship-to-ship transfers with a Russian vessel and later docked at an EU port.

Malta’s resistance to a crackdown on the shipment of Russian oil is nothing new and it has resisted moves by the EU to curtail the shipment of Russian oil from the outset.

Back when the first discussions of the sort were held in May 2022, Transport Minister Aaron Farrugia told The Times of Malta about its resistance, “Malta has its own interests to protect but we want to balance that with meeting our sanctions obligations.”

Farrugia did not go into further detail but insisted that Malta’s shipping industry is of “huge strategic importance”.

“We have to protect what we have and that’s why we are looking to find a compromise during these technical meetings,” he said.

NGO Global Witness reported in June of last year that Malta was one of three European Union countries whose ships increased the transport of Russian oil since the invasion of Ukraine.

The anti-corruption NGO reported that ships flying the Maltese, Greek and Cypriot flags had increased the volume of Russia-linked crude oil over the previous year. The report was published after Malta, Greece and Cyprus had successfully, although temporarily, lobbied to block an EU proposal to ban the transportation of Russian oil on EU-flagged vessels.