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Global Vigilance

Unknown Vessels Involved in Illegal Activities

“As enforcement agencies improve their capabilities via technology and training and information becomes more readily available, criminals constantly find ways to evade being caught and getting their goods seized.”

Through the first half of 2019, some of history’s largest illicit drugs and prohibited goods seizures occurred at ports worldwide.  Just last month, German Customs confiscated 4.5 tons of cocaine worth $1.1 billion at the Port of Hamburg and the Greek Coast Guard confiscated 5.25 tons of Captagon pills worth $660 million at the Port of Piraeus.  In June, US Customs confiscated 20 tons of cocaine worth $1.3 billion at the Port of Philadelphia.  In February, Hong Kong Customs confiscated 11.5 tons of pangolin scales and ivory worth $62 million at the Port of Kwai Chung. Those were the largest single haul seizures in the history of Germany, Greece, US and Hong Kong, respectively.

Despite the magnitude of those events, authorities did not release the name of the vessels used to smuggle the goods – except for US Customs; however, US Customs also chooses to selectively release vessel names as public information.  We have found that authorities worldwide only release a vessel’s name in 30% of the cases.  Largely, vessels and, more specifically, the companies that own and operate them, are recognized as innocent third parties that unknowingly participate in illegal activities due to the nature of their business.  According to an ocean executive interviewed by FreightWaves, “Shipping lines don’t open the container.  We carry based on what is declared for the container.  In the event of a drug bust, the master and the crew are questioned.  They’ll check the seals to see if they are damaged.  Then there’s a criminal investigation.  If it’s one container, they’ll just unload the container and release the ship.  All the ship does is accept a box and make sure that the stowage and stability is right.”  There’s truth to that statement, but it overlooks other important factors.

Criminals adapt.  As enforcement agencies improve their capabilities via technology and training and information becomes more readily available, criminals constantly find ways to evade being caught and getting their goods seized.  Although containers have been used as the primary medium for concealing large amounts of illegal goods, it shouldn’t be assumed that illegal goods were loaded when the container was being initially packed and sealed.  For example, in the case of US Customs’ historic cocaine seizure this past June, court documents outline that in the middle of the night “…upon leaving Peru on this current voyage, he [Ivan Durasevic] got a call from the chief officer to come down to the deck, at which he saw nets on the port side stern by the ship’s crane. Durasevic and approximately four other individuals, some of whom were wearing ski masks, assisted in the pushing of the nets towards Hold Seven or Eight of the vessel. The nets contained blue or black bags with handles. Two or three crew members assisted in loading the cocaine into containers. The whole process took approximately 30 to 40 minutes.” Durasevic is one of the men prosecuted for loading the drugs onto the vessel. Rather than using a container-centric focus, the vessel’s routing and characteristics had an important role.

Additionally, the protocols and policies of owners and operators and local and international statuses can help determine vessels that are more likely to transport illegal goods.  For example, Hapaq-Lloyd, Evergreen and OOCL are helping to deter criminal activity by implementing large fines and indefinite liability for rogue shippers that un-declare or mis-declare goods.  Understanding the complexity of proactively enforcing that policy, those carriers are also strengthening their pre-boarding inspection and verification procedures.

Using Global Vigilance VSS, you can determine vessels that are involved in criminal activity and – leveraging that intelligence – proactively identify other high-risk vessels.

For more information, contact us about how we can help you track vessels.



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MSC Vessel

MSC Gayane Released from U.S. Custody

Global Vigilance VSS notified us on Saturday night at 9:19PM EDT that the MSC Gayane, a one year old, new panamax container ship with a capacity of 11,000 TEUs, departed the Port of Philadelphia.  It made mainstream news headlines over the last three weeks for being caught transporting 19.76 tons of cocaine (US$1.3 billion) inside of seven containers[1], which also contained wine, paperboard, vegetable extracts and dried nuts[2]. That was the largest cocaine seizure in the history of U.S. Customs and Customs and Border Protection (CBP)[3].

J.P. Morgan has received most of the public backlash as all major news outlets identified it as the company who owns the “drug ship”[4] in headline after headline. That generated attention but failed to accurately inform the public of the company directly responsible.

Due to the complex nature of shipping and costs to own, operate and insure a vessel, there are seven levels of direct ownership with seven distinct roles fulfilled by one company or multiple companies – related or unrelated. Concerning the MSC Gayane, Mediterranean Shipping Company (MSC) and its subsidiaries have those responsibilities. However, as the group beneficial owner and operator of it, MSC has direct control. J.P. Morgan, more specifically J.P. Morgan Asset Management, only has an indirect, financial stake in the MSC Gayane on behalf of its pension fund customers.

Copyright 2019 Global Vigilance.  All rights reserved.

On July 4th, 16 days after finding the record load, CBP seized the MSC Gayane at the direction of William M. McSwain, the U.S. Attorney for the Eastern District of Pennsylvania, and subjected it to possible forfeiture to the United States[5]. That decision seemed indefinite based on his comments, but McSwain released the ship nine days later after an agreement with MSC was reached[6]. Global Vigilance VSS immediately alerted us when the MSC Gayane departed the Port of Philadelphia en route to Rotterdam, Netherlands.

Using Global Vigilance VSS, you can monitor port movements and create alerts to notify you when vessels arrive, depart or declare they are en route. And as vessels have seven levels of direct ownership, you can also create alerts that notify you when a controlling entity meets the same criteria.  In addition to the MSC Gayane, we are tracking other seized ships worldwide.

For more information, contact us about how we can help you track vessels.



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References

  1. “Ship in Record Cocaine Bust Seized, Anchored in Delware Bay.” nbcpalmsprings.com. July 8, 2019. Retrieved July 15, 2019.
  2. “REVEALED: How JPMorgan’s stodgy asset management division came to own a ship that was seized in Philadelphia carrying 20 tons of COCAINE worth $1.3billion”. dailymail.co.uk. July 10, 2019. Retrieved July 15, 2019.
  3. “Cargo ship owned by JPMorgan Chase seized by US with 20 tons of cocaine”. edition.cnn.com. July 10, 2019. Retrieved July 15, 2019.
  4. “JPMorgan Might Lose a Drug Ship”. bloomberg.com. July 10, 2019. Retrieved July 15, 2019.
  5. “Commentary: Vessel forfeiture.” americanshipper.com. July 12, 2019. Retrieved July 15, 2019.
  6. McSwain, William. (USAttyMcSwain). “Progress on our MSC Gayane ship seizure: Today, my office secured $10 million in cash and a $40 million surety bond from the owner and operator of the vessel in exchange for its temporary release pending a final resolution in this case. #MSCGayane”. 13 July 2019, 1:26PM. Twitter Post.