Phantom ship fraud a risk for insurers: IMB

Phantom ship fraud a risk for insurers: IMB

KUALA LUMPUR (AFP): The Kuala Lumpur-based International
Maritime Bureau (IMB) warned yesterday that so-called phantom
ships were taking over from pirates as one of the biggest risks
on the high seas.

The warning came as IMB revealed that the country's largest
multinational, Sime Darby Bhd., was the victim of a phantom ship
fraud, a phenomenon that IMB says is posing "multi-billion
dollar-problems" for insurers.

Phantom ships are usually stolen vessels registered under the
name of bogus companies, which take on cargo but never deliver
it. The ships then change their names before they pick up a fresh
cargo elsewhere.

"Sime Darby was a victim of a phantom ship fraud, a crime that
has cost victims through Southeast Asia at the very least US$50
million in the last three years," IMB's regional manager John
Martin told AFP.

"The same vessel that had preyed on Sime Darby could still be
plying to ensnare unsuspecting shippers," he said.

Last month, Chinese customs in Beihai, Guangxi, announced they
had released a $6 million cargo of 5,000 tons of rubber belonging
to Sime Darby Commodity Trading, that had been seized last
November along with the vessel, called Asoka II, on suspected
smuggling charges.

According to Martin, the ship turned out to have been formerly
named Windsor III, and had been chartered by Sime Darby to carry
the rubber.

"Sime Darby, of course, did not involve itself with any
smugglers or any vessel called the Asoka II when it simply wanted
to export (the) rubber to its clients in Hongai, Vietnam, and
Fangcheng in China," Martin said.

Its agents loaded the shipment at Malaysia's northern Penang
port on to the Windsor III, which sailed on Oct. 3, last year,
and never arrived in Hongai or Fangcheng, Martin related.

The IMB later ascertained that no ship bearing the name
Windsor III was registered with London's Lloyds shipping
register.

The Asoka II was able to flee Beihai after discharging its
cargo and its current whereabouts and identity remained unknown,
Martin said.

"It could still be plying its phantom trade or have been
deliberately sunk or have been sold to an unsuspecting shipping
company," he warned.

Martin said shippers could help curb incidences of phantom
ship fraud through "routine prudence".

"The true ownership and identity of a vessel, the status of
its purported owners and the authenticity of documents can be
quickly established at minimal cost by the IMB," Martin said.