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How smuggling helps Russia


The author is a senior researcher at the American Enterprise Institute and an advisor to Gallos Technologies

Since Russia invaded Ukraine, a new type of fleet has gathered in the Kerch Strait. Observers in this narrow channel – which connects the Sea of ​​Azov to the Black Sea and therefore the rest of the world – are recording record volumes of ships with gaps in their automatic identification transmissions, suggesting they want to hide their movements . This fleet of clandestine ships became a key factor in the surprising resilience of the Russian wartime economy. And its escalating operations suggest that Moscow’s contempt for Western sanctions will only continue.

Under international maritime regulations, all but the smallest commercial vessels are required to broadcast an Automatic Identification System (AIS) to inform other vessels of their position. During the third quarter of 2020 – a largely normal period in the world ship — 42 ships passing through the Kerch Strait turned off their AIS a total of 86 times, according to new data from Lloyd’s List Intelligence. There may be legitimate reasons for this; sometimes AIS malfunctions. However, these 42 vessels represented only a tiny percentage of approximately 10,000 ships that crossed the strait in an average year before The Russian invasion of Ukraine.

Since then, however, the number of ships sinking in the strait has skyrocketed. Immediately after the invasion, in the second quarter of 2022, 468 ships went out 1,126 times. And in the first quarter of this year, the darkness reached unprecedented heights: 586 vessels, the vast majority flying the Russian flag, declared 1,753 AIS deficiencies. Some may have simply been trying to avoid detection by military ships during times of conflict, but there are likely other factors at play as well.

“This spike is so extraordinarily high that it makes you conclude that there are things the Russians want to hide,” said Bridget Diakun of Lloyd’s List Intelligence. “For various reasons, some legitimate and some not, the Russians probably don’t want people to watch them.” About three-quarters of AIS shortcomings involved cargo vessels; a quarter were tankers, according to Lloyd’s figures. Thus, a large amount of dry cargo, as well as smaller volumes of oil and other liquids, left the Sea of ​​Azov under cover of AIS darkness.

The Kerch Strait is a standard Russian grain export route: smaller vessels descend from Russian ports in the Sea of ​​Azov and conduct ship-to-ship transfers in the southern part of the channel. But if these exchanges occur in conjunction with AIS gaps, it makes the cargo much harder to trace. Russia, of course, can import and export as it pleases from its own ports. However, after the invasion, Moscow could also transport contraband goods from occupied Ukrainian ports on the Sea of ​​Azov. The spike in the AIS spread could be evidence of Russian efforts to hide the movement of stolen Ukrainian grain, suggests Diakun.

Ukraine’s allies, meanwhile, are bound by sanctions aimed at weakening the Kremlin. The fact that a number of vessels responsible for AIS deficiencies have been registered in Panama and St. Kitts and Nevis suggests that these flag of convenience states are tolerant of breakdowns. Several countries, including Russia’s key trading partners such as India, China and the United Arab Emirates – neither condemned the invasion of Ukraine nor signed the sanctions imposed by the West.

In theory, AIS refuseniks should be punished, as they increase the risk of collision for nearby vessels. Neil Roberts, secretary of the marine insurance industry’s risk assessment body, the Joint War Committee, said “it’s hard to see what the law-abiding side of the industry can do against willful criminal evasion, as it has no police powers”. Indeed, the UN’s International Maritime Organization is not a global maritime police. A 2003 treaty gives Russia and Ukraine the right to inspect commercial ships sailing through the Kerch Strait – but neither is likely to do so now. And while Western insurers, which dominate maritime underwriting, shun companies exposed to sanctions, the Kremlin provides alternative sea cover.

The explosive growth of AIS gaps in the Kerch Strait suggests that this clandestine shipping will facilitate Russian trade for some time to come. The geopolitics of sanctions has also changed dramatically over the past three decades. During the Cold War, the West’s embargoes were effective because its economic power allowed unscrupulous countries to substitute for a few trading partners. Today China, India, the United Arab Emirates, Saudi Arabia and others can easily help sanction targets evade these restrictions and strike a deal in the process. As such, the AIS darkness is a parable of war, peace and globalization today.


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