Houthis blow open murky world of ship nationality

When Yemen’s Houthis attacked a ship carrying 21,000 tonnes of fertiliser from Saudi Arabia to Bulgaria last month, they had a simple justification: they said the Rubymar was a “British ship”.

But the Rubymar, which sank on Saturday, flew the flag of Belize, was partly managed by a Beirut-based ship management company, was on a voyage organised by another Lebanese operator and had a mostly Syrian crew.

Its only clear link to the UK is that maritime databases give a flat in Southampton, England — in a nondescript residential block called Webb Court — as the address for the ship’s owner. However, that owner is a company called Golden Adventure registered in the Marshall Islands in the Pacific.

A missile that struck the Rubymar near its engine room on February 19 forced the 20 crew and four security guards to abandon the vessel. It had been chartered by a Saudi commodities company, had picked up its cargo in the UAE and was heading to Bulgaria.

The ship’s sinking makes it the first vessel to be entirely lost as a result of the Houthis’ campaign off Yemen’s coasts. As with other Houthi attacks on commercial ships, the Rubymar incident has highlighted the difficulty of determining a vessel’s nationality and ownership. Many are held through offshore companies whose ultimate ownership is not declared. Some ships are leased or chartered to other companies that may take effective control of every aspect of the vessel’s operation.

The issue of a ship’s ownership and nationality is important because the Iranian-backed Houthis — who say they are acting in support of Gaza’s Palestinians — have vowed to attack ships linked to Israel, the UK and the US. The Houthis have said that the strike on the Rubymar was also in retaliation for recent US and British bombing of the Yemeni group’s military facilities, after the militants attacked more than 40 ships since November.

In the latest attack, on Monday, the Houthis fired two missiles at the MSC Sky II, a container ship operated by Geneva-based Mediterranean Shipping Company, the world’s biggest container shipping line. One of the missiles hit, causing minor damage. The Houthis described the vessel as Israeli, while the US military and others described it as Swiss.

Peter Aylott, policy director of the UK Chamber of Shipping, a lobby group, said vessels’ ownership and nationality defied easy categorisation, adding that shipping companies had long used their discretion to choose which flag their vessels flew.

The majority of ships sailing internationally are registered in countries such as Panama, the Marshall Islands or Liberia that offer a low-cost, low-bureaucracy service providing the basic registration and safety checks demanded by international maritime regulations.

Ship-owning companies are frequently incorporated in a country other than their ships’ flag states. Vessels also have a choice of classification societies — companies that ensure on behalf of insurers that ships meet the appropriate technical and safety standards.

“You can choose where you incorporate,” Aylott said. “You can choose where you flag. You can choose from different classification societies. You can insure from anybody.”

There is no detailed public information about Golden Adventure’s ownership of the Rubymar and there was no answer to a call to the Southampton apartment linked to the company.

However, marine websites showed aspects of the management of the ship were undertaken by GMZ Ship Management, based in Beirut. The voyage was organised by Blue Fleet Group, another Beirut-based company.

Roy Khoury, Blue Fleet Group’s chief executive, told the Financial Times in an email that the company was the “exclusive broker” for the vessel’s owner, meaning Blue Fleet handled commercial arrangements such as finding work for the vessel.

Khoury denied that the ship had any connection with the UK. “The Houthis had wrong data,” he wrote. “Even the crew is Syrian.”

To the Houthis, however, such complex arrangements are evidence of their opponents’ deviousness. In a video published online last month the movement’s leader, Abdulmalik al-Houthi, celebrated attacks on ships it described as “American” and “British”.

One was the Morning Tide, a bulk carrier flying the flag of Barbados but owned by a British-registered company. The other was the Star Nasia, which was flying the flag of the Marshall Islands but owned by Star Bulk, a company based in Greece that is listed on New York’s Nasdaq stock exchange.

In an apparent reference to the popularity of the Marshall Islands’ flag with US shipowners, al-Houthi said the Americans were trying to camouflage their movements at sea and had placed on some of their ships “the flag of a ‘marshal’ of an obscure country at the end of the world”.

There is little prospect that international shipping will simplify its arrangements, however. George Macheras, head of shipping for Watson Farley & Williams, a London-based shipping law firm, said it was “in the DNA” of the sector to use ownership structures not linked to an individual country.

Questions of a vessel’s nationality can be complex even where the facts are clearer than in the case of the Rubymar. The worst damage inflicted by the Houthis on any ship before the Rubymar was on the Marlin Luanda, a tanker that suffered a severe fire after a missile strike on January 26. The Houthis also described that vessel as British.

However, the ship, which flies the Marshall Islands flag, was on a “bareboat charter” to Trafigura, an international commodities trader incorporated in Singapore. Under bareboat charters, charterers take charge of crewing and other operational matters.

The Marlin Luanda is owned by a group of international investors through a company which, because the investors were advised by US investment bank JPMorgan, is registered at one of the bank’s London offices.

Macheras pointed out that, by some measures, nearly every vessel at sea had some link to either the US or the UK. “The majority of trades take place in US dollars, so already you have an obvious US nexus,” he said. “A majority of ships are insured in the London market. So already you have a UK nexus as well.”

Aylott said the long-term question was whether the Houthis would cease their attacks or continue with them even after any future ceasefire in Gaza.

Many shipowners would feel vulnerable until the attacks completely ceased, said Macheras, both because of the Houthis’ unpredictable tactics and the ambiguities of vessels’ nationalities.

“When the Houthis come out and say, ‘We’re going to target ships from X, Y and Z countries’, [it is] difficult to work out which ships fall into these categories,” he added.