Since the beginning of the year, sanctions against Russia for its invasion of Ukraine have been significantly tightened, in particular targeting “dark fleet” tankers that service both Russian and Iranian oil exports. For the shipping and logistics industry worldwide, sanctions create burdensome overhead costs for doing business. It is necessary to understand the rules and consider their application to everyday trade. Violations of sanctions also create particular challenges for maintaining fair market competition.
In January, Lloyds List estimated that the three main sovereign sanctioning authorities – the United States, the United Kingdom and the European Union – had sanctioned 35% of the estimated 669 dark fleet tankers carrying Russian and Iranian oil. These figures include 143 tankers sanctioned by the US Treasury Department’s Office of Foreign Assets Control (OFAC) on 10 January. On 9 May, the UK added a further 99 tankers to its sanctions list, with Prime Minister Starmer saying at the time that the UK had added more dark fleet tankers to the list than anyone else. The EU’s recently announced 18th package of sanctions on Russia added 105 tankers to its list of dark fleet vessels. Canada has also joined the sanctions effort. The UK’s National Crime Agency last week estimated that 400 dark fleet tankers are currently subject to sanctions, and issued a warning, in particular, to insurance and finance companies that provide cover for dark fleet supplies. It is difficult to assess the effectiveness of sanctions regimes. Legitimate firms that seek to comply with the rules will enforce them themselves. Those who intend to deliberately breach sanctions must assess the risk of being caught, as well as the fines that will be imposed if they are caught. The number of sanctions fines imposed by any jurisdiction is therefore an indicator of the effectiveness of the sanctions regime, but not a complete answer.
In 2024, OFAC in the United States imposed 12 civil penalties totaling $48.8 million. So far in 2025, OFAC has imposed seven penalties totaling $235.88 million, indicating a significant increase in enforcement activity.
In the United Kingdom, the sanctions regime is the responsibility of the Office of Financial Sanctions Enforcement (OFSI), a Treasury organization with 140 full-time staff divided between the Engagement, Enforcement, and Enforcement functions. In 2023–24, OFSI investigated 396 cases and issued 18 warning letters. But only one company was fined, which raised $20,000 for distressed government funding. Dr Helen Taylor of the pressure group Corruption in Focus has described the UK sanctions regime as “all bark and no bite”.
In Europe, the Commission is responsible for the EU-wide sanctions system and maintains a single database of sanctions across the 27 EU countries. It also encourages countries with which it has dealings to comply with the system. But there is recognition within the relevant EU Commission directorates that while the rules set are ambitious, the system often fails, as enforcement remains the responsibility of individual states, some of which do not agree with Brussels’ prosecutions and around half of which have not even made sanctions evasion a criminal offence. The Netherlands, Latvia, Hungary and Germany are known to have successfully prosecuted individuals who evaded sanctions in 2024, but the overall picture of EU sanctions enforcement is difficult to assess.
Enforcement clearly remains a challenge when “dark fleet” tankers call at ports, unload and use shipping services even in countries that maintain close relations with those imposing sanctions. Tougher enforcement will inevitably involve fines and a tougher stance towards some of these friendly countries. This often creates difficulties; diplomats are usually more willing to engage than to confront, and often decisive action can threaten free trade and tariff negotiations, and sometimes even jeopardize the basing rights enjoyed by the US and UK in the country, ignoring sanctions.