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.