Russia may be smuggling stolen grain out of Ukraine through ship-to-ship transfers, according to Israeli artificial intelligence and data analytics company Windward.
Windward said in a report released Wednesday that its maritime AI technology identified a “worrisome new phenomenon: alleged Russian grain laundering.”
The report contains information about five vessels that allegedly engaged in “dark activities” and ship-to-ship operations in the Kerch Strait in June “as part of what appears to be a coordinated effort to launder grain allegedly stolen from Ukraine.”
A vessel goes dark when it temporarily or permanently disables its automatic identification system. Windward called this “one of the most basic deceptive shipping practices used to conceal vessels’ location, operations at sea and illicit activities.”
Dark activities in the Black Sea by bulk carriers flying under Russian or Syrian flags have increased by 160% from July 2020-June 2021 to July 2021-June 2022, according to Windward. And 73% of that increase took place after the Russia-Ukraine war began.
Going dark isn’t the only indication of criminal activity. Others include falsification of documents, changing of names of entities, complex ownership structure, ship-to-ship transfers and irregular voyages, Windward said.
Windward CEO Ami Daniel told FreightWaves it’s not unusual for Russian vessels to turn off transmissions.
“That’s pretty old news,” Daniel said. “But [what is] very novel — and I have not seen it in any shape or form, I have to say it is extremely rare — is the picture of the three vessels you have doing a ship-to-ship transfer of grain.”
Daniel continued, “I think that this is very out of the ordinary. I think somebody’s going to extreme lengths to hide the origin of this grain by doing ship-to-ship transfers in the Kerch Strait.”
Historically, vessels engaging in dark activities focused largely on crude oil smuggling. But now, vessels seem to be going dark and meeting in the Kerch Strait to transfer potentially stolen grain from Ukraine and make a visible or dark port call in Turkey or Syria to unload their cargo.
“I have never seen that happening with grain because it’s pretty complicated to transfer grain in the middle of the sea,” Daniel said. Ship-to-ship meetings at sea are more common for oil because they can use a pipe to transfer the oil.
June 10 meeting
On June 10, three cargo vessels and two service vessels were captured in satellite images meeting “for alleged grain smuggling.” One of the vessels had a Belize flag. The other four were sailing under the Russian flag, according to Windward.
One of the Russian vessels from the June 10 meeting has engaged in 19 dark activities in the past six years, 10 of which happened since the war began, Windward reported. That vessel went dark for a day prior to the meeting.
“I would absolutely 100% expect vessels to turn off transmissions near Ukraine where you can get shot by a missile,” Daniel said, noting that south of the Bosphorus Strait in Turkey, vessels won’t be hit by a mine or missile. And some vessels have been turning off their navigation south of there.
Based on draft levels, it appears the Belize bulk carrier, owned by a Turkish-based company, took cargo from the other two vessels during the June 10 meeting and unloaded it in Metalurji, Turkey, the report said.
“Turkey is connected to a lot of places. I think Turkey is a great way to pull in and have these cargos disappear. They’re part of NATO, but they don’t really have the same traceability mechanisms as Western Europe,” Daniel said.
He said Russia is trying to “monetize on the grain” due to higher grain prices. And once a commodity has been exported, tracing it becomes very difficult.
Tracing mechanisms and sanctions are mostly focused on wet cargo such as oil, Daniel said. “So the dry bulk sector is way, way less sophisticated than oil in the sanction world.”