Malta—the EU’s largest maritime flag—has suffered a significant blow in recent years due to some of its oil tankers on its register being sold to be used by the so-called Russian shadow fleet.

According to a new report by the investigative journalism platform Follow the Money, only last November, a Greek owner of two Malta-flagged tankers, the Fos Picasso and the Fos DaVinci, sold his vessels to a Hanoi-based company to transport sanctioned Russian crude oil.

In the process, the two tankers, which were part of the Malta register, were transferred onto the Panama register, which does not sanction Russian companies or Russian oil.

Sources in the maritime industry told The Shift that Malta is obliged to follow EU-wide sanctions targeting Russian oil as part of the EU.

They said while this is positive on the political front, as the sanctions try to combat the money used by Russia to finance its invasion of Ukraine, it is still creating a negative impact on the Maltese industry as more and more tankers are sold to be used to bust the sanctions.

According to the international investigative report, Malta, Cyprus, and Greece, the EU’s largest ship registers, are objecting to the introduction of more targeted sanctions on the sale of tankers.

The EU is pressing to upgrade its sanctions targeting specific ships and owners. However, so far, Malta, Greece, and Cyprus have held off unanimity at the EU level, keeping the introduction of these rules at bay.

Tankers at sea awaiting instructions.

The three EU member states argue that the unanimous introduction of further sanctions at the EU level does not work, and other countries easily bypass these rules. The consequence will be the loss of maritime business by the three flag states, with the sanctions continuing to be bypassed by other non-EU countries.

Malta, Greece, and Cyprus argue that these sanctions must be introduced globally at the International Maritime Organisation level. However, an agreement at the latter level is almost impossible to achieve.

The sanctions against Russian crude oil were introduced by the EU and the US in 2022 following the invasion of Ukraine.

These sanctions prohibit EU member states and their ships from transporting Russian-derived oil.

However, these sanctions are being easily bypassed, with more and more tankers being acquired by non-EU companies and registered under non-EU registries, which are not bound to follow any sanctions.

Ship-to-ship transfers of Russian crude oil are also common, with areas outside Malta’s territorial waters reportedly being one of the most common sites where these transfers occur.

Malta has no jurisdiction over what happens outside its territorial waters, and surveillance is minimal.