EU sanctions on Russia are being quietly undermined by an old maritime trick known as “flag hopping” — a practice that lets sanctioned ships switch identities and move illegal or restricted goods like oil with impunity, according to a new report by The Royal United Services Institute (RUSI).
The warning comes as the EU weighs an “hard-biting” 19th sanctions package against Russia, and Western powers press for a restoration of UN sanctions on Iran.
Existing EU measures — part of Brussels’ 18th sanctions package against Russia adopted in July — increased the number of listed vessels in Russia's shadow fleet to a total of 444, with the number of individual listings, counting both individuals and entities, exceeding 2,500.
These sanctions target Moscow’s efforts to sidestep restrictions through covert trade, while some of the ships are also accused of hybrid war tactics by deliberately cutting critical undersea cables by dragging their anchors.
But RUSI’s report warns that EU sanctions on countries such as Russia, North Korea and Iran are being steadily eroded. By switching flags, ships can slip under the radar, exploiting lenient registries in places like Panama, Liberia and the Marshall Islands — jurisdictions with lighter oversight that unsurprisingly rank as some of the most popular by tonnage.
Speaking to reporters on Tuesday, the European Commission said it was too early to comment on the contents of its new sanctions package.
RUSI fellow Gonzalo Saiz Erausquin, who co-authored the report, spoke to The Parliament about some of its findings.
The following interview has been edited for length and clarity.
What is flag hopping?
The fundamental reason vessels need to be registered to begin with is having their rights to freedom of navigation recognised. If they are not flagged — and indeed we have seen a rise in false flagging and or fraudulent registration — they can be intercepted in international waters since they are not protected by a state jurisdiction. One of the issues is that there are international conventions laying out the practices and these has been faced with very specific deficiencies by flag states that do not carry sufficient checks into beneficial ownership, the state or condition of the vessel, adequate insurance, and essential conditions.
Because of the deficient controls, once a vessel is sanctioned by a specific jurisdiction, a flag state could say ‘well we don't want this vessel in our registration because of the risks it poses, maybe the reputational risks as well, so we'll deregister it.’ But because it's so easy now to re-register somewhere else, this practice is called flag hopping. In 2025, the jumping from one registry to another has escalated to an unprecedented peak.
How are states allowed to do this?
It is illegal. There are specific obligations that are mandatory under international conventions for flag states to implement. However, the UN body in charge of upholding these conventions, International Maritime Organisation (IMO), has no enforcement powers. So flag states, even though they have the obligation to comply with international conventions that they're signatories to, choose not to. This could be a matter of low resources, lack of capacity, or an opportunistic practice to see the revenue that comes from providing registration openly, including high-risk vessels.
Why has there been a resurgence of this practice?
It's clearly a reaction to the threat posed by Russia and the expansion of its shadow fleet that ultimately enables Russia to evade international restrictions on its energy exports and maintain its oil flowing to third countries. Because Russia has expanded this fleet of very old tankers, nobody truly knows who they're owned by or whether they're adequately insured. We're seeing these vessels transiting through international waters, international straits and territorial waters that makes coastal states realise the very real risk it poses to allow these vessels to be registered in specific jurisdictions.
So we [RUSI] are trying to engage with those jurisdictions to avoid providing services to shadow fleet vessels, which in the end are a threat to everyone. They could fall apart and cause an oil spill, they could damage the coastal state, it would damage the reputation of the flag state providing services to that vessel.
The EU is considering a 19th package of sanctions in Copenhagen, which would aim to prevent third countries from helping Russia escape the bloc's sanctions. Would flag hopping fall under the remit of that package?
The EU has for some time tried to counter sanctions evasion via third-country intermediaries, increasingly adopting restrictions and targeted sanctions. So it is stepping into the realm of what the Americans call secondary sanctions. The EU has traditionally shied away from this practice, but I would argue that the EU has adopted ancillary sanctions, trying to go after these enablers in third countries.
The shadow fleet is very much part of that entrenched ecosystem of sanctions enabler, and flag registration is a key part of it. And indeed, in the 18th package, we saw the EU sanction the private operator of the registries in Gabon and Comoros, which is a UAE based company. So if we have seen the EU designate these entities, primarily those that are privately operated, we could certainly see these steps being taken further in the 19th and subsequent packages.
What is the economic impact of the flag hopping practice?
Russia's oil exports have not dipped substantially, given the amount of restrictions that we are introducing. And this is partly enabled by the shadow fleet being flagged by a number of flag states internationally, as they are giving that legitimacy to sail through international waters. If flag states were to get their registration in order and clean it up from high-risk vessels, we could see Russia struggling to have these vessels access ports that are importing Russian oil and ultimately damage its fundraising for the war in Ukraine.
Does this mean that EU sanctions on Russian, Iranian and North Korean ships are meaningless?
Not meaningless, but they are certainly undermined by an international order that has not been adequately enforced. So given that the IMO was not able to ascertain these powers and implement obligations on member states, we [RUSI] are calling on the Financial Action Task Force (FATF) to take the lead on this implementation. It could evaluate countries as part of its mandate on country proliferation financing to assure that UN-sanctioned jurisdictions like North Korea are not abusing these gaps. However, even though the FATF only looks into UN sanctions, if we were to raise standards across all flag states, then countries like Russia, Iran and others could not advance its shadow fleet registration globally.
What can governments and private bodies do?
Governments in the EU, UK and US are pushing for these practices to cease and are primarily motivated by the threat posed by Russia's shadow fleet. And in the case of the EU and the UK there's been a very extensive diplomatic outreach to flag states, both the main registries in the world like Panama or Liberia, as well as the smaller jurisdictions that are popping up for the first time and providing services to the shadow fleet with weaker oversight. And it's on all flag states to conduct or to comply with international obligations and for those that want to lead on this initiative to take it to the IMO, to take it to FATF and in these international forums to ensure that their mandates are being enforced.
Neutralising Iran’s shadow fleet is also a priority of the Trump administration. Why?
Since the beginning of the Trump administration in January 2025, we have seen the return of what is called the maximum pressure campaign on Iran. Through this, we have seen greater sanctions against Iran's shadow fleet. And I believe the interest of the US would match this initiative to avoid third countries, any flag state in the world, from providing services to Iran's shadow fleet. We have already seen the EU and the UK sanction a private flag registry operator.
The US could very well do the same in relation to those providing services to Iran. There's also discussions on UN sanctions being reintroduced if the UK, France and Germany all push for the snapback. And this would mean that under international law, all member states of the UN must ensure that they're not providing services to Iran's shadow fleet. The FATF would also have it within its mandate to ensure the flag states are complying with counter-proliferation sanctions against Iran.
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