Strange strategy of seizing shadow fleet

Shadow fleet is in the news these days. The Balkan Chihuahuas trailing and threatening these vessels was at the crosshairs of the Russian navy as well the air force. Why flag carriers departing from or sailing towards St. Petersburg and Kaliningrad are being harassed?

The answer is these vessels are deemed as part of shadow fleet. What is shadow fleet? The simple answer is the ships that are not registered in the Lloyd Registry in London. Lloyds is the well-known registry of sailing ships certifying compliance of standards relating to operations, insurance, and finance of vessels. Logical next question is whether a ship can sail without being registered at Lloyds.

The answer is it is not mandatory to register any ship at the Lloyds. The only requirement is every sailing ship must be registered with any national maritime registry alternatively known as flag state. Seven of the most popular flag states are in alphabetical order, Bahamas, Cyprus, Greece, Hangdog, Liberia, Malta and Marshall Islands.

Under the maritime law no country can harass any flag carrying vessels except for reasons including but not limited to crew safety, suspected to carry contraband, engaged in narcotics trade and wanton failure on the part of the crew in conforming to maritime standards.

Recently German navy seized the Panama flagged Eventin Oil Tanker carrying Russian oil citing that the ship was not registered in the Lloyds registry and any country in the G7 group can interdict an unregistered vessel. Ostensibly, this was done in furtherance of the decision made by the G7. The vessel along with her cargo of approximately 100,000 tons of crude oil, valued at €40 million, were officially confiscated and transferred to German ownership. The fact that due to an engine failure, Eventin drifted into German coastal waters was ignored.

Russia citing that Germany has no right to interdict a sailing ship under the “ Freedom of Navigation Law” of the United Nations acted quickly by announcing that there is no such thing as shadow fleet and that the arrested ship must be freed.

In the meantime, Germany took a bad strategic decision. She  not only seized the vessel and emptied the content of oil the vessel carried but later renamed the vessel as German owned one plying under the German flag carrying description as “EVENTIN Crude Oil Tanker, IMO 9308065”  last seen in the Baltic Sea.

As far as business strategy is concerned the seizure of vessel and re-registering under new name was too bad to foot. What Germany could have done is to warn the vessel and after effecting necessary repairs pilot it to international water in Baltic Sea.

This strange strategy of seizing the so called shadow fleet vessel would linger for a long time in Russia-German relationship! 

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

Hidden reason for Trump leaving Iran deal

Citing “Iran Deal”, signed on 14/7/2015 in Vienna by the Permanent Five Members of UN Security Council plus Germany with Iran was not comprehensive, Trump left the deal on 8/5/2018. He alluded couple of reasons for his action but kept the real reason close to his chest:

It was not surprising that Trump found fault with the deal. He has been too scornful of the Iran Deal from the beginning. He bemoaned the fact that it did not address the concerns of Israel as regards to Iran’s missiles capacity and the perceived notion of Iran destabilising the Middle–Eastern theatre. For all purposes this is just smoke screen.

During the pendency of Iran Deal, Boeing negotiated with Iran Air for the sale of 80 Boeing 787 planes with a booking value of USD 16 Billion to be supplied over ten years that would provide jobs for more than 100,000 people. When the deal was ditched Boeing reported that the value was around USD 20 Billion. That could have been a real tangible benefit for USA.

Yet, Trump has a different calculation. His business strategy was two pronged: One, get the best out of the Iran Deal for USA. Two, deny the plums to European business sector. That is geoeconomics proper!

He was indeed right. Immediately after the deal was initialled Airbus signed USD 25 Billion deal to supply 118 planes including 73 wide body jets and 45 narrow body jets. Highlight of this is the proposed sale of 12 A380 superjumbos. By the way, A380 was hitherto below the break-even point. Undoubtedly, Iran was giving a boost not only to Airbus but also to A380.

Yet another remarkable European performance was in the cross hair of Trump. Trade between Iran and Europe shot up by 50% as regards to oil exports to countries such as Italy, Greece and Spain. Moreover, business openings for many European industries started to see the sunlight, mostly due to increased sale of oil by Iran exceeding 2.5 million bpd.

Trump wanted the cake and eat it alone. What transpired was Europe surging ahead in ordering more petroleum whereas US exports of crude oil to Europe starting to plummet.

Realizing, he must navigate business strategy amid geoeconomics the Deal Maker Donald Trump pushed the President Donald Trump to scupper the JCPOA alias Iran Nuclear Deal alias simply “Iran Deal“ on May 8^th of 20i8 laying waste the Obama legacy of long term peace making.

The bottom line is still President Trump dreams of a new Iran Deal during his watch in the second and last presidency. But in strategy you need two to tango. Admittedly Iran is not playing ball with Deal Maker Trump!

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

 

Iran attacks Israel economy

Fine tuning her military strategy, Iran is harping on the economic muscle of Israel. In the end, it is economy that is stupid as Bill Clinton usually says. Breaking the geoeconomics backbone of Israel is the strategy Iran has been following since beginning of hostilities.

Iran knew that as a settler colony like Israel cannot last long when the elites and the rich begins to abandon the Promised Land. Most of the people who belong to this cabal cannot stand the regular barrage over their fashionable dwellings in elitist boulevards. Targeting the elites has twin purposes: wearing down their enthusiasm for Greater Israel concept and liquidating their valuable assets inside Israel. This is a classic business strategy followed by Iranian planners while executing their campaign.

Although the attack is localised into selected areas where the economic power brokers live, the macro purpose is not killing them but to kill the economic muscle leading finally to the dilution of geoeconomics clout hitherto enjoyed by Israel. Here are seven inter-connected steps that are unfolding in quick succession:

1. Destruction of the Stock exchange building in Ramat Gan whose market capitalization exceeds USD 475 Billion.

2. Commercial capital of Tel Aviv is almost one-third destroyed where banking finance, shipping, techno headquarters are located along with housing for their staff with related infra-structure facilities.

3. Valuable real estate is next in line. Tzamarot Ayalon in Tel Aviv, Dena in Haifa are significantly targeted. These locations boast fashionable living along with luxury dwellings and expensive boulevards for both residents and expatriates.

4. Vital cities such as Herzliya, Jerusalem and Beer Sheva are specially focussed by Iran. By the way, Microsoft HQ in Beer Sheva has been completely guttered.

5. Follow the money and kill it, is the new theorem Iran is postulating in cities that are connected to investment banking, venture capital and other financial professions that carry out intermediation. Collectively, these are located in financial centres in specific regions.

6. Manufacturing capacity as well as other processes involved in the value chain of major arms manufacturers such as Rafael, Elbit System and Israel Aerospace Industry are zoomed in for elimination.

7. Finally, in addition to the settlers, the focus of Iran is to create fear psychosis upon investors, venture capitalists, biz collaborators of domestic and foreign origin. Needless to say tourism sector is in doom and gloom as Iran continues her business strategy of scuppering the economic arm of Israel in generating income out of tourism which remains so far as a key forex earner for Israel.

The bottom line is once the economic muscle is atrophied any country would feel the pain domestically and thereafter abroad in the area of geoeconomics!

  

Cheers! 

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist