Lloyd’s List and Maritime Executive disappointing analysis of Crimean shipping

Lloyd’s List (LL) and Maritime Executive ME) published recently articles on Ukrainian clampdown on Crimean ports, rather a hot subject for Med – Black sea shipping. Both articles left a strange feeling of industry media leaders supporting those who violate sanctions, and in general, being annoyed by the whole mess and also, by Ukrainian resistance to Russian aggression, including different means of hampering Crimean shipping.

LL says:
With that attitude it is little wonder that some shipowners and operators choose to ignore the sanctions regime by continuing to carry cargoes of Crimean origin, and calling at closed Crimean ports. As one German shipowner asked Lloyd’s List, “Can the Ukrainian government tell me where I can and cannot go with my vessel?”
Does LL understand the difference between the law and unlawfulness, I wonder? Does LL believe, that shipowner can direct his vessels anywhere he wants to, without paying attention to national laws and regulations? Does LL (and German shipowner in question) recognize and accept Crimea as rightful Russian territory, which is unfairly suffering from stupid international sanctions? If Crimea is occupied, annexed territory, which still belongs to Ukraine, according to all the laws of the world, how come then, that the Ukrainian government can’t tell the shipowner where he can, and where he can’t go with his vessels, in Ukrainian own waters? Do LL and ME believe, that if someone takes something from somebody by force, he’s becoming by such an act a legitimate owner? Just because he’s stronger, at least for the time being?

LL says:
We were told by one former head of maritime policy in the UK that trade with Ukraine and Crimea, which is typically in wheats, grains, and foodstuff, was not of high enough value for the authorities to consider policing, comparing it to sanctions on Iran which effectively neutered its lucrative oil exports market.
This is real strange, especially for LL, widely accepted as a paragon of expertise and analysis. If there is not enough value to bother, why do you bother? Why such an irritation in analyzing Crimean sanctions? Most interestingly, why LL substitutes intentions? Who’s talking about the UK maritime policy? Who in this case, cares? We’re talking about Ukrainian policy, whether maritime UK likes it or not, whether “Many EU member states oppose the sanctions” or not. Ukraine is in full right to defend its’ interests, and Ukraine has enough means at its’ disposal to punish violators, without involving other nations and their liking or disliking. That’s what we’re talking about, that’s what we have to talk about, not about small value of Crimean shipping or curious ideas of German shipowner. Ukraine is in its’ right when clamping down on Crimean shipping, it will be really strange if Ukraine would react to Crimean shipping, as if nothing happens, as if a foreign shipowner can’t be told where in Ukrainian waters he can and where can’t go with his vessels. That’s all there is.

Another curious story told by LL, is the story of stunned by sanctions and regulations mess Turkish Bank:
AT the tail end of last summer, Lloyd’s List was approached by a Turkish trade finance bank that wanted clarification on what business it could, and could not, do in Crimea. It was interested in financing a cargo onboard a vessel that would transit the Kerch Strait, but was unsure if compulsory pilotage and transit fees payable to the Kerch Commercial Seaport, a named entity, would put it in contravention of the European Union sanctions regime against Russia.
Contradictory advice from legal sources, combined with opaque sanctions regulations and little direction from Turkish authorities, had led it to conclude the potential risk was too much and the deal fell through.

I closely monitor situation with Crimean shipping, last year I’ve been invited to read my report on a conference devoted to risk aspects of modern Crimean shipping, which was held in S-Petersburg. I read my report via Skype, here it is in Russian http://www.odin.tc/mbnew/read.asp?articleID=600. I more or less know the risks involved, but I never knew about the risk LL told about. Kerch Strait transit is a very delicate matter, both conflicting sides, Russia and Ukraine, just don’t tamper with it, because it will hurt both ways. For all I know, all vessels transiting Kerch Strait didn’t have, and don’t have, any problems. And I believe, won’t have, unless Russia launches a full-scale war against Ukraine.

Crimean shipping value
We can discuss as well, Crimean shipping value, no problem with that. What is, geographically and economically, the Crimea? It’s natural part of the Ukraine. Being part of the Ukraine, Crimean peninsula is a part of many logistics chains, it’s a pond with streams of running water. Without Ukraine, and all the transport links and transit cargoes it brings or originates, Crimea is an island, a pond without streaming water, destined to turn into a dead swamp, and that’s exactly what already happened. Let’s look at some figures:
The cargo flow of all Crimean ports in 2014, first year after annexation, was 2.07 million ton, whooping 81.7% downfall. In a period from the time of annexation until the end of 2015, the cargo flow of one of the biggest Crimean ports, Sevastopol, collapsed from annual 4.8 million ton to 312,000 ton, more than 15 times fall.
There is virtually nothing to ship from Crimean ports, so generally, Crimean shipping now is a one-way road, busy with supplying Crimea with goods required for mere survival (Crimea now is cut off Ukrainian foods, Ukrainian water and Ukrainian energy, depending wholly on Russian supplies with only one road to deliver them, which is sea), plus of course, a tremendous flow of military cargoes, because Crimea, after Russian invasion, turned into one big military base, effectively destroying all other industries.

According to constant monitoring of Crimean ports ship calls, carried out by Ukrainian activists group “Maidan of Foreign Affairs”, in a period from Mar 18 2014 until Jul 10 2015, there were in total 216 ship calls, with vessels linked to 16 countires, among them Russia and Ukraine. Russian vessels were on top, with 101 ships which violated sanctions. Second was Turkey with 52 ships (I believe that by now Turkish shipowners understood, that they were playing with the Devil), and third was occupied by Greece, with 28 ships.
“Maidan of Foreign Affairs” by the way, has its’ own informants in Crimean ports, who’re monitoring ships which call those port. It’s a dangerous undertaking, I mean physically dangerous, like you know, French informants in French ports, occupied by Nazi during WWII.

Why do shipowners take the risks?
Now, let’s ask ourselves most important question of all. Why do shipowners ignore the risks of ships arrests, hefty fines or crews ban? What’s their motif? Is it just an arrogance like the one LL mentioned – why somebody should tell them, what ports to call and where to sail? Or is it something else? I guess I know the answer. I know personally and closely one rather well-known Russian shipowner, who was suspect in Crimean shipping and Syrian Express involvement in some published reports, including Reuters reports. I asked him, why does he take such risks? He is facing the risk of being included in a personal sanction list, and that will be ruinous for him. He said to me in a blunt no-nonsense way – “Do you know, Mike, how profitable it is?”
Here we are, that’s what it is all about. Crimean shipping is a very profitable business, all the more so, if looking at shipping crisis around.
Whatever the risks, the rewards, for some owners, are outweighing them. Why should anyone be concerned about such shipowners and their risks, one may wonder. They know the game they’re in, and that “Can the Ukrainian government tell me where I can and cannot go with my vessel?” stance is nothing but hypocrisy. Yes, Ukrainian Government can tell you, where you can, and where you can’t go with your vessel, when you’re going to go to Ukrainian waters. Yes, you’re violator perpetrator in the eyes of Ukrainian and international laws. Yes, you’ll suffer when caught, and your crews along with you. Not all will be caught and prosecuted, of course. It depends on Ukraine authorities will and dedication. They have all instrument at their disposal to punish perpetrators. If Ukraine chooses to do so, up to 80-90 percent of shipowners, who violated sanctions, may be tracked down and punished.

Crimean shipping as part of Russian military expansion
But what’s the final meaning of this Crimean shipping business? What’s the zest of it? There’s nothing to import from Crimea, there’s nothing to export to Crimea, too, except goods required for Crimean population survival. But alas, there are other goods, which are in great, ever growing need in Crimea. Militarization of late peninsula surpassed all sensible, reasonable scales, Crimea turned into one big, maybe biggest in the world of its’ kind, military base. Of course, not all the cargoes of Crimean shipping are military connected, but what’s Crimea under Russian rule? It’s a military base with ruined economy and infrastructure.
Not that Russia (Kremlin) doesn’t care about Crimean economical and social mishaps, purposefully destroying everything civilian in there. The problem is, Russia can’t change geography and Crimean economical roots. Crimea is part of the Ukraine, and there is only one way to make it part of Russia, by occupying mainland Ukraine, all or at least, eastern and southern, seaside parts of it. Until then, Crimea is a dead end, a land with no future except military. So whether shipowners want it or not, by violating Crimean sanctions and carrying Crimean cargoes, they’re helping Russia to build up its’ military might.

Business as usual?
So what, one may ask? Leave us alone with your policies and sanctions, we’re doing our business. Didn’t we hear the same “business as usual” talks before, in say, pre-WWII world, too?
- If Turkey doesn’t want to pay attention to what Mr. Lavrov (Minister of Foreign Affairs of Russia) is saying, Turkey will have to pay attention to what Mr. Shoigu (Minister of Defence of Russia) will say.
- What? What Baltic States you’re talking about?! There are no Baltic States, no Ukraine, no Georgia, we should take them back long time ago, because those so-called States are occupying native Russian lands!
- Is there a risk of war? Putin: What war, global you mean? I hope no.
- All Europe is looking at Russia as a last hope. Russia must be recognized as a global brain center, the main brain of the world.
- During WWI, after glorious victories of Russian military over Turkish armies, even England and France had to admit, that Konstantinopol (Istanbul) and Turkish Straits must belong to Russia.

What are these citations? Are they blubbering of drunk or doped freak found in Moscow slums? No. Those are citations from Russian national TV political talk shows, with Russian leading politicians and experts (well, they’re freaks, actually, but unlike other countries, they are not fringes, they are, again, leading politicians and experts of modern Russia) as participants. Those are no jokes. They’re serious when talking like that. It’s a tiny part of what they’re saying, there are much, much more sayings, billboards, clips, speeches, placards and other materials of disgustedly racist, fascist character. Russia is mad with ideas of racial superiority and Russian military might. Not all Russia, but most part of its’ population. Those who disagree have to keep low, real low.

Personal touch
All of it, including Crimea, has a personal touch for me. According to latest Russian laws, I’m a criminal when I say openly, that Crimea was annexed, that Crimea belongs to Ukraine, not to Russia. Saying that is a criminal act, equaled to terrorism. I said it openly, many times. And will say again. Russian law enforcement agencies may demand my extradition from Thailand any time they decide to do so (say, if I bother Mother Russia again with a story like the story of Arctic Sea mystery), and I will be extradited in no time, Thailand is not the place to seek for political asylum.
I have other threats except Russian laws, though. Since the time I openly slated Crimea annexation as a criminal act, and later, invasion into Ukraine, I’m regularly receiving personal threats from Russian “patriots”. Most recent one I received about two weeks ago, when somebody identifying himself as “patriot”, told me on the phone, that they (patriots, I guess), will hunt me in Thailand and knife me down. It’s only knife he was talking about, others were much more creative, some of the methods of my killing are worthy of Malleus Maleficarum.

Instead of explaining the situation in general and the risks in particular, LL and ME in poorly disguised form demonstrated their irritation with sanctions and in general, with Ukraine, which is selfishly resisting a peaceful and friendly act of Crimea annexation, striking down with vengeance upon those poor darlings, innocent shipowners.
Don’t shipowners have other problems at hand, much more pressing than all the sanctions taken together? ITF and its’ worldwide web of “affiliated” mobs, to name one?

Mikhail Voytenko
February 23, 2016

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