Finland has recently ramped up its scrutiny of oil tankers transporting Russian crude through its economic zone in the Baltic Sea, issuing demands for valid insurance certificates starting from December 11. This move follows calls from the European Parliament to tighten oversight over the tanker fleet, as revenues from Russian oil exports remain steady, undermining earlier European Union efforts to curb this income.
According to the Finnish transportation authority Traficom, no issues have been detected related to tanker insurance since the initiation of these checks. "All tankers responding to Finnish authorities have provided evidence of valid insurance," stated Sanna Sonnin, director of Traficom, when speaking to the STT news agency.
Sonna clarified how the verification process works. The insurance information for tankers, particularly those operating around the Finnish Gulf, is usually requested via electronic communication. If necessary, the inquiries can escalate to radio contact between the ships and the authorities during routine registrations. "The vessels are first asked digitally and, if needed, via VHF radio to confirm whether they possess valid CLC insurance certificates," she noted.
International law guarantees freedom of navigation within neutral waters, which includes the economic zones of coastal nations. Nevertheless, vessel owners are held accountable for transporting cargoes like oil and are required to have adequate insurance coverage to address potential spills or other environmental impacts.
Since December 2022, the European Union has enacted a ban on importing Russian oil, along with the G7 countries, imposing price ceilings on this raw material destined for third countries. These restrictions have led to the emergence of numerous lesser-known shipowners whose tankers help Russian exporters circumvent the price cap, much to the frustration of EU officials who aim to diminish Russian revenue streams.
This year, Brussels has rolled out several sanctions packages targeting over 70 tankers linked to these operations. There have been calls for actions to prevent the passage of ships through straits leading from Russian Baltic ports, but international law limits the EU's capacity to assert such control.
The European Parliament urged for more targeted measures against these vessels and their owners, operators, managers, and associated insurance companies. "The Parliament demands systematic sanctions against ships operating within EU waters without recognized insurance, stressing the need for improved monitoring capabilities, including drone and satellite surveillance, as well as targeted inspections at sea," the Parliament stated.
Traficom, since the beginning of the insurance verification initiative, has reported no problems associated with the documentation provided by tankers. Sonnin emphasized, “There has been no mention of inspectors going aboard for checks; the interactions remain procedural and non-intrusive.”
Finland's regulatory efforts are part of broader strategies among countries bordering the Baltic and North Seas, which have coordinated regular checks of the insurance statuses of oil tankers connected to Russia's so-called "shadow fleet." This fleet comprises vessels allegedly designated for transporting Russian oil above the price ceiling imposed by member states of the G7, as well as military equipment and Ukrainian grain.
To date, 79 maritime vessels have been sanctioned by the EU, which continues to implement new economic and personal sanctions against Russia. The EU Council added 52 vessels to its lists recently, banning them from entering European ports or receiving various services.
This crackdown is reinforced by limitations established by the G7, Australia, and the EU; effective from December 5, 2022, there is now a price restriction for Russian oil during maritime transport set at $60 per barrel. Should oil shipments exceed this rate, the transportation and associated insurance become illegal, impacting both legal and commercial operations around Russian crude.
Russian President Vladimir Putin responded to these sanctions by issuing orders banning the supply of oil and related products to foreign entities when contracts involve mechanisms against price cap wedges.
For now, Finland's measures, seen as part of the EU's broader effort to challenge Russian oil exports and their financing of the conflict, appear calculated to address compliance and maintain vigilance within the shipping industry. Observers await the effectiveness of these insurance verifications and their impact on the steady flux of Russian oil through European waters.
