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Singapore May Confiscate U.S.-Sanctioned Ship

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By The Maritime Executive 12-06-2019 10:48:56

Officials in Singapore intend to judicially confiscate a Russian freighter that has been blacklisted by the United States for her owner's alleged dealings with North Korea. 

"Singapore sent papers that the ship is arrested due to berthing debts," said Gudzon Shipping's fleet management director general, Oleg Anikin, speaking to Interfax on Friday. "We could lose this ship."

Russia's embassy describes the action as a commercial dispute, not a sanctions-enforcement action, but Annikin said that the ship's seizure stemmed from sanctions difficulties. Sevastopol's auxiliary diesel engines broke down after she arrived in Singapore in February, he told Interfax; Gudzon tried to contract with local ship repair companies to get assistance, but given the U.S. sanctions on Gudzon and its fleet, most of the Singaporean companies it contacted refused to do business. The ones that would do the work offered an "unbearable price," according to Annikin. With no repairs, the ship languished at the pier, and according to radio station Ekho Moskvy she accumulated nearly $1 million in berthing fees.

There are 12 seafarers on board the vessel at present, and port authorities have restricted access to the ship while judicial proceedings are under way. If Singaporean port authorities prevail in court, they will sell the ship to satisfy Gudzon's debt. 

It is not the first time that the Sevastopol has run into sanctions problems with her suppliers. In November 2018, she was temporarily stuck at the port of Busan because no one would sell her fuel. "Korean companies are refusing to supply fuel to us," said a spokesperson for owner Gudzon Shipping, speaking to Radio Free Asia. "It's a huge problem . . . The big [South] Korean oil companies like GS Caltex and Hyundai Oil won’t deal with us because of the U.S. sanctions on all our vessels."

Gudzon denies any connections to North Korea and says that it is in talks with the U.S. Treasury in an attempt to have sanctions lifted. The Sevastopol herself does not stand accused of trafficking goods to North Korea, but has been blacklisted because she is an asset of Gudzon Shipping. 

The U.S. Treasury believes that the Gudzon-operated tanker Patriot conducted two ship-to-ship transfers of petroleum products with North Korean ships in early 2018. This allegedly included transfers of 1,500 tons of oil to the North Korea-flagged Chong Rim 2 and 2,000 tons of oil to the North Korea-flagged Chon Ma San, both of which have been blacklisted by the U.S. and the UN for other sanctions-busting activity.