German Courts Debate Seizure of Russian Oil and Shadow Fleet Tanker

Eleven months after the German customs authorities first moved to seize a shadow fleet tanker and confiscate its cargo of Russian oil, the courts continue to debate the intricacies of the law in this unusual case. Germany’s Federal Fiscal Court on Thursday, December 11, upheld a lower court's decision suspending the ordered confiscation and sale.

The tanker Eventin remains under detention off the German coast in the roadstead near Sassnitz on the island of Rügen. The 152,000 dwt is the subject of a legal appeal by the time charterer of the tanker, attempting to block the confiscation and sale of the cargo, while has also seen the German Senate become involved.

The vessel was loaded in Russia and traveling the courts report to India when it broke down on January 9, 2025, in the Baltic. Due to the power outage, it became unmaneuverable, drifting into German territorial waters. It was eventually towed by the German authorities to the anchorage, and four days later, the Customs Office issued the detention order for an inspection, citing possible violations of the embargo on the export of Russian oil.

The owners of the vessel have remained a mystery even through the court proceedings. Built in 2006, the tanker was renamed Eventin in June 2022, with ownership listed as a shell company in the Marshall Islands. The vessel was registered in Panama. At the time the vessel broke down, it was not sanctioned, but was later added to the EU, UK, and US sanctions. Panama removed the ship from its registry in March as a result of the sanctions.

The German Customs office consulted with the European Commission’s Legal Service. In February, it received an opinion that the ship was in violation, and the only way it could leave Germany was to unload the cargo. The Customs Office issued the seizure order at the end of February and, in March, ordered the cargo seized and to be sold.

The charterer files an objection to the confiscation order in March. It sought legal protection from the Finance Court. The court suspended the confiscation order in May.

The federal court found today that the Finance Court had “well-founded doubts.” It says the definitions of the sanctions and possible exemptions are seriously doubtful in this case.

The appeal is based on the fact that the ship was under its legal right to seek refuge in a port after it became disabled. Further, they note the ship did not intend to enter the German EEZ, but instead was carried there by forces outside its control, ie, the currents and winds. The sanction regulations do contain an exception for vessels in distress to provide access to EU ports, but they point out that the ship was not sanctioned when it entered the German EEZ.

The court also writes that the German authorities actively prevented the ship from re-registering with another state’s flag after Panama withdrew its flag. Based on the confiscation order and a corresponding flag certificate, the court concludes the ship would be entitled to sail under the German flag.

The customs authority appealed the initial suspension order to the higher court. The court said the appeal is admissible but unfounded and therefore must be dismissed, due to the unresolved issues. The government continues to pursue its case and awaits a decision on the broader issue of whether the ship was exempt, as it was seeking refuge, or it was a violation of the ban on the export of Russian oil regardless of the circumstances. The court also said that the Senate must independently examine a request from the charterer to release the vessel and its cargo.

Experts point out that the case could have broader implications, as the EU this fall said it would move to stop more shadow fleet tankers. France held a shadow fleet tanker for several days at the end of September before releasing it, while French President Emmanuel Macron called for the EU to follow the same strategy to disrupt the economics of the Russian oil trade.