All eyes on registry-swapping ships

Working for Russia?: A Cambodian ship waits in Hanasaki port in Nemuro, Hokkaido, on March 16. KYODO PHOTO

By YOSHIAKI SAKAMOTO

Kyodo News
http://search.japantimes.co.jp/

KUSHIRO, Hokkaido (Kyodo) The past decade has seen a drastic reduction in Russian ships calling at ports in Hokkaido, where much of Russia's marine produce is imported, while ships registered to other countries, including Cambodia, have risen sharply.

In fact, three times as many Cambodian vessels are calling at some ports than Russian ships are, but many of their crewmen are thought to be Russian. Shipping sources said the reason behind the trend is Russian ship owners changing registries to avoid taxes.

According to Finance Ministry data, Hokkaido ports had 9,200 Russian ship calls in 1999, but only 1,400 in 2008. Ships with other registries rose about 1.6 times in the period, with Cambodian ships expanding 10-fold from 190 to about 1,900.

The decline is especially conspicuous in Wakkanai, where Russian ships have dropped from 3,700 to about 240 and Cambodian ships have risen from zero to 740.

There are also ships registered in Belize, Panama, Sierra Leone and Mongolia that are bringing in crabs and sea urchin from the four disputed islands seized by the former Soviet Union at the end of World War II.

The customs offices and the Japan Coast Guard are trying to track down Russian ships whose registries and names have changed. "These changes have become quite conspicuous in the last several years," said an official at the Nemuro office of the coast guard.

Maritime law experts said that, since the laws of a country where a ship is registered are basically applied to its ships, changing the registry to a country where regulations are lax can reduce registration fees and taxes. This has resulted in aged secondhand ships being used, as well as a drop in wages for crewmen who are increasingly being recruited from other countries.

"It is a situation in which anything can happen," one critical shipping official said.

Countries promoting ship registries, however, are gaining higher income from taxes and foreign currency earnings.

An official who registered a ship in Cambodia said the procedure is simple and everything can be completed if the required documents and money are sent to the registry office in the South Korean port of Busan.

But Nobuo Arai, a professor at the Slav Research Center at Hokkaido University, said one country's gain is another's loss. "A large problem for the Russian government is decreases in tax revenues," he said.

One factor contributing to the trend is the stronger regulations against poaching and smuggling in the Far East promoted by the administration of former Russian President Vladimir Putin to protect crab and sea urchin resources.

An official at the Hokkaido branch of the All Japan Seamen's Union said it is difficult for Russian authorities to clamp down on foreign-registered vessels.

In 2002, the Fisheries Agency also strengthened regulations on Russian ships to make it obligatory for them to present cargo customs clearance declaration cards when entering Japanese ports.

As a result, it is suspected that marine products are being transshipped from fishing vessels at sea to freighters not subject to control and brought into Japan.

To skirt such regulations, some Russian dealers are switching their export target from Hokkaido to Busan, fishing industry sources said.