The Art of Sanctions-Busting – How Three LPG tankers set sail for Syria

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On January 14, a liquefied petroleum gas (LPG) tanker sailing under the name Captoon 2 (IMO 8817693) set off from the Romano port in Albania, bound for Tripoli in northern Lebanon. It then turned off its Automatic Identification System (AIS) and sailed on radio silence for more than a week—reappearing 10 days later off Cyprus.

The curious pattern repeated itself with two other LPG tankers. The Katara (IMO 9003079) set sail from the Turkish port of Dortyol on January 20, going off the radar near Cyprus while signaling for Beirut. It reappeared five days later at the same location. And earlier this month, the Happy (IMO 9040170), left Aspropyrgos in Greece for an unclear location, going dark on February 10 in the same area off Cyprus only to reappear four days later as it was leaving the region. Yet another vanishing act.

At first sight, the AIS trajectory lines indicated that Syria was the actual destination. This became highly probable upon reviewing records of the Captoon 2 and Katara. The two vessels were blacklisted by the United States for involvement in delivering oil to the sanctioned Syrian government in the past years. These are the latest tankers on the Office of Foreign Assets Control (OFAC) list which have been seen in Syrian waters since December when a previous investigation by the author first revealed that another U.S.-blacklisted LPG vessel, the Melody, had arrived at the Baniyas port in northwestern Syria coming from the Romano port.

Using satellite imagery from Planet Labs Inc., TankerTrackers.com confirmed that the Captoon 2, Katara, and the Happy all ended up at Baniyas during the period they had their AIS transponders switched off (see images below). Analysis of the AIS data, ship tracking data from MarineTraffic, satellite images, and open-source research have created a picture of how some LPG vessels have managed to circumvent U.S. and EU sanctions to deliver fuel to Syria—and develop a sanctions-busting network.

The Captoon 2 and Katara

When the Captoon 2 and Katara were first seen transmitting Lebanon as their final destination in January, this did not raise any red flags on its own: Lebanon is an importer of LPG (Butane/Propane), which is essential for heating in winter, and cooking.

But their next moves did raise suspicion. Switching their AIS transponders off, in an area frequented by other vessels with a history of docking in the Syrian port of Baniyas, was a sign that they were mimicking the behavior of other Baniyas-bound vessels.

There are at least six private gas import terminals located along the Lebanese coastline, and most LPG tankers have been calling on Lebanon normally since January. At least nine small vessels have discharged there, according to market data intelligence firm Kpler, and as of February 21, imports were standing at a total of around 41kilotons (kt) of LPG so far in 2021. However, the Captoon 2 and Katara were not among the LPG vessels that called on Lebanon last month.

Starting with the Captoon 2, the LPG tanker left Albania’s Romano port on January 7, and was signaling for Lebanon’s Tripoli all along. It was seen off Dipkarpaz in Cyprus before it turned off its AIS transponder later that day, according to data from MarineTraffic.

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The past tracks of the Captoon 2 (also known as Gitta Gas), Dec 1, 2020-Feb 10, 2021 (Source: MarineTraffic)

Using satellite imagery from Planet Labs Inc., TankerTrackers.com confirmed that the Captoon 2 was at the Baniyas LPG Single Buoy Mooring (SBM) on January 21.

And this was not the first time this LPG tanker had been seen in Syria.

The Captoon 2 is on OFAC’s list of vessels that have been involved in moving oil to Syria between 2016 and 2019, and has a history of changing its identity. It was known as Gitta Gas, and then Juno Gas, before changing its name to Captoon 2 in March 2020, according to the Equasis online database. The Panamanian-flagged tanker has changed its name five times since 2015, according to the International Maritime Organization (IMO).

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A satellite image showing the Captoon 2 at Baniyas, Syria, Jan 21, 2021 (Source: Planet Labs Inc.)

The manager and commercial manager of Captoon 2 is listed as a company named Dash Marine Services Ltd, based in Kuwait, according to Equasis. However, little information is available on the company. In many cases, the beneficial owner who controls the vessel is usually hidden behind layers of other registered owners.

“The beneficial owner may well be government owned, or not, as the case may be,” said Wayne Hurley, head of Business Development at International Maritime Risk Rating Agency (IMRRA). “The vessel/owner relationship can be made deliberately difficult to establish and of course easily deniable. The risk/reward of sanctions busting, smuggling etc. is large enough to ensure somebody takes the opportunity,” he added.

The ISM (International Safety Management) manager, meanwhile, is listed as Morgan Navigation CO SA, according to the Equasis database. A web search for Morgan Navigation CO SA, reveals a report from the United Nations Security Council showing that this company is a subsidiary of Alfamarine Shipping Co Ltd, which is also registered in Lebanon. And the reason the UN report features the company is because a tanker owned by Morgan Navigation CO SA appeared in a case linked to Libya in 2017, and was investigated by the council.

Additionally, a web search for Alfamarine Shipping Co Ltd led to a report containing a quarterly list of ship detentions of the Black Sea Memorandum of Understanding (MOU) in 2005, and which showed that Alfamarine had an address in Tartus, Syria. The company was the owner of a ship (IMO 7040994) that was detained in Ukraine in December 2005 due to technical deficiencies.

While it cannot be proven to be the case, it should be noted that some shipping companies are registered in Lebanon and elsewhere in the region to act as front companies to cover the Syrian identity of the beneficial owner or links to Damascus.

The LPG tanker Katara has also changed its identity over the years—it was named Felix when it was added to the OFAC list of vessels involved in moving oil to Syria between 2016 and 2018. In September 2020, it was renamed to Katara, while its manager and commercial manager changed from Turkey-based Blue Denizcilik Ltd Sti. to another company operating in Istanbul under the name of Eli Investment Ltd, according to the Equasis database. The tanker, which was sailing under the Turkish flag since October 2018, was later reflagged to St Vincent and Grenadines in March 2019.

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The past tracks of the Katara, Dec 1, 2020-Feb 10,2021 (Source: MarineTraffic)

Shipping data from MarineTraffic shows the Katara was at Turkey’s Dortyol port on January 16 before it sailed to an area off Cyprus, and sat in the direction of Tartus in Syria. Then on January 20, it went dark while it was signaling for Beirut. Using satellite imagery from Planet Labs Inc., TankerTrackers.com confirmed that the Katara was at Baniyas on January 22. It later reappeared on January 25, and was seen sailing to the Greek port of Aspropyrgos in the following days, according to MarineTraffic. And it was at this Greek port where the LPG tanker, Happy, was seen leaving in early February.

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A satellite image showing the Katara at Baniyas, Syria, January 22, 2021 (Source: Planet Labs Inc.)

Enter the Happy

The Happy is an LPG tanker that traveled to Syria earlier this month using tactics similar to those employed by the other two LPG vessels. On February 10, it switched off its AIS transponder in an area north of Dipkarpaz, Cyprus, and remained in the dark until February 14, data from MarineTraffic shows. Using satellite imagery from Planet Labs Inc., TankerTrackers.com confirmed that the tanker was at the Baniyas LPG SBM on February 14.

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The past tracks of the Happy, Dec1, 2020-Feb 22, 2021 (Source: MarineTraffic)

Unlike the Captoon 2 and Katara, the Happy is not on the OFAC list. Its manager and commercial manager is a company called Moonlight Energy Co., which is registered in Saint Kitts and Nevis. Additionally, the Happy sails under the flag of Comoros, one of the flags of convenience that are on the Black List of the Paris MOU due to poor performance. The Paris MOU is a 27-member organization whose mission is to eliminate the operation of sub-standard ships.

Sanctions on Syria

In 2018, the United States sanctioned individuals and entities based in Syria, Lebanon and the UAE for facilitating “financial transactions and shipments of fuel and weapons to the Syrian regime.” A few years earlier, in 2015, the U.S. Treasury Department also targeted an energy network composed of individuals, entities and vessels “for providing energy products used by the Assad regime to continue fueling the ongoing conflict in Syria.” The vessels included one tanker that delivered several thousand metric tons of LPG from Ukraine to Baniyas in February 2015, and another, the Blue Way, which loaded several thousand metric tons of LPG “likely destined for Baniyas,” in mid-March 2015, according to the U.S. Treasury. The Blue Way is the same tanker that is presently named the Melody, and whose visit to Syria from the port of Romano in December 2020 the author previously tracked.

Waves of western sanctions have been aimed at weakening Damascus since 2011, but Syrian President Bashar al-Assad has shown no signs of buckling under international pressure. Although the Syrian government has regained large swathes of the country amid a civil war that has left more than 380,000 people dead, the ravaging and horrendous conflict has left the country in tatters and chaos. Syria is currently facing multiple crises as it struggles to secure key commodities such as oil products and wheat—given that sanctions have affected such supplies— amid a falling Syrian currency and insufficient local production, according to the Syria Report website. Damascus has resorted to rationing petroleum products due to fuel shortages it has blamed on western sanctions.

To make matters worse, these woes have been compounded by the deepening financial meltdown in neighboring Lebanon.

The timeline of western sanctions on energy supplies dates back to the beginning of the war in Syria. In the case of LPG, European sanctions in April 2012 forced a Greek-based company, known as Naftomar, to halt its LPG supplies to Syria after it had been allowed to maintain the exports for humanitarian reasons (LPG is used for heating and cooking). This company was referred to as the sole supplier of LPG to Syria at the time.

Western sanctions against Syria have paralyzed its energy sector since 2011 when massive anti-government protests broke out, making it dependent on fuel imports. Data shows that over the past years Damascus was able to secure some of its energy needs in defiance of international pressure. Iran, for instance, is still supplying the Syrian government with crude oil despite delays, and vessels carrying LPG have managed to sail to Syria. Different tankers have been involved in moving oil to the country while employing classical schemes to avoid detection. Those tankers, and just like the ones which this article examines, have continued to make their way to Baniyas using maritime tactics to obfuscate the process of tracking them. However, these oil supplies are not enough to address local demand, and ordinary citizens are struggling daily to secure basic commodities, such as cooking gas.
Sanctions-busters

Syria is not the first country where long-established sanctions-busting practices have been employed to circumvent western restrictions on trade and energy supplies.

In his research paper titled “The Failure of Maritime Sanctions Enforcement against North Korea” published in 2017, Dr. Robert Huish looks into the ineffectiveness of sanctions on marine traffic into the Democratic People’s Republic of Korea (DPRK), and highlights what he calls “four weaknesses” that allowed vessels to continue into the country: “flags of convenience, misidentification or false registration, offshore ownership, and shell-firm owners, managers, and insurers.”

The Captoon 2, Katara, and the Happy also carry these four elements that obstruct the implementation of sanctions on marine traffic. Some tankers are even willing to take high risks when sanctions stand in the way, as in the case of two U.S.-blacklisted LPG vessels that made headlines in 2019 when they both caught fire in the Kerch Strait. The two vessels, Maestro and Candy, were involved in a risky operation of transferring LPG in the middle of the sea after one of the vessels was reportedly prevented from accessing a regional port due to sanctions. Both were on the OFAC list of vessels involved in moving oil to Syria.

Source » energyfuse

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