March 7, 2024
Who is profiting from illegal fishing? Unveiling ownership of fishing vessels is critical to save the ocean
Illegal fishing is depleting the ocean, and it takes place because it is a profitable business. To effectively address this problem, it is not enough to sanction a fishing vessel or putting a fine on its captain, we must target the economic incentives that fuel such activities. These are businesses that ultimately profit from illegal activities and use tax havens or shell companies to hide their identity. Some illegal fishing is undertaken by transnational criminal networks that also engage in other illegal activities such as tax evasion, forced labour, or money laundering. Finding and prosecuting the ultimate beneficiary of illegal fishing and its massive profits is often an impossible task.
Making information on the ultimate owners of fishing vessels public is therefore key, particularly to prevent potential financial gains from illegal activities from flowing into the European Union. This information needs to be available to authorities, prosecutors, journalists, and local communities so that those who benefit from illegal fishing can be exposed and pay for their actions.
Tackling IUU fishing: the role of beneficial ownership in EU legislation
Since January 2024, EU nationals and companies have been prohibited from owning, operating, or managing vessels flagged to countries which do not cooperate in the fight against IUU fishing, such as Cameroon, Trinidad and Tobago, Saint Vincent and the Grenadines, Comoros and Cambodia. These countries have been listed by the EU as “non-cooperating” due to their failure to tackle IUU fishing, lack of necessary fisheries rules or inadequate control over their fleet, among other reasons. But do we have information on the number of EU companies with shareholder ownership of vessels registered in these non-cooperating countries?
The short answer is “no, we do not”. Member States collect information about their flagged vessels, available in the EU Fleet Register. This register, however, does not include data on the ultimate beneficial ownership. If such crucial ownership information is absent for vessels flagged to Member States, the situation is even less transparent for companies owning vessels in non-EU countries as there is no such register.
In fact, few EU states collect information on their citizens’ ownership of non-EU flagged vessels, and it is even more rare that these nationals are required to inform the authorities of non-EU vessel ownership.
Using Lloyd’s List Seasearcher, Oceana found at least four vessels flagged to countries that have been listed as “non-cooperating” countries. EU owners have until March 9th, 2024, to request the vessels to be removed from the registry of these countries under the new EU fisheries control law.
The transparency gap
There is currently no dedicated public register for EU-owned vessels fishing in non-EU countries.
To create such a register, we can draw inspiration from the EU Emissions Trading Scheme (EU ETS), a key tool to reduce greenhouse gas emissions across various sectors, including maritime transport. It monitors and controls shipping companies whose vessels operate in EU waters regardless of the flag. This scheme applies to cargo and offshore supply vessels travelling to/from ports under the jurisdiction of a Member State, and vessels docked in EU ports. Under this framework, the European Commission will release a bi-annual list of shipping companies subject to the EU ETS and the Member State responsible for their management. The list will also include companies registered in non-EU countries, in which case the responsible national authority will be the Member State with the highest number of port calls of that company or where the company first sailed from.
While the EU ETS does not cover fishing vessels, it is an example of a public list of EU and non-EU shipping companies regardless of the flag of their vessels. A similar system could inspire a register for fishing vessels owned by EU companies flagged to non-EU countries.
Political action to increase fisheries transparency
Creating and regularly updating a publicly accessible register of EU companies owning vessels in non-EU countries is crucial. Authorities should invest concerted efforts in setting up a comprehensive data collection system requiring nationals to report financial interests in fishing vessels flagged to non-EU countries.
Political support for fisheries transparency and the creation of such public databases is increasing. Recent initiatives by the European Parliament (here and here) urged the European Commission to adopt measures to stop the use of flags of convenience and called for public access to ownership information for fishing vessels of all flags. As the push for databases collecting information on beneficial owners is gaining momentum in the Parliament, it is time for concrete actions to ensure a sustainable and accountable future for the fishing industry.
