Navigating Allegations of Smuggling: Vigilance and Mitigation Strategies

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It is not unusual when anchoring off ports in West Africa for ships to draw close attention from local craft, fishermen and others, looking to sell their produce in exchange for international currency and/or ship’s equipment. Some approach simply to seek donations.

Recent cases highlight the need for heightened vigilance and proactive measures to mitigate the risk of smuggling accusations, exposure to criminal proceedings and exorbitant fines.

A Case Study - 87 million euros for 7 Kg of shrimp

In a recent case, a local fishing boat approached a ship entered in the UK Club that was awaiting her turn to discharge cargo at Lome, via STS. The fishermen offered the day’s catch of fresh shrimp to the crew. About 7 kilos were exchanged with small scrap items, for the crew’s personal consumption.

In an unpleasant turn of events, the ship and captain were accused of "smuggling by sea vessel" under the Togolese Customs Code. As a result the ship was detained and not permitted to leave Lome anchorage. The Member was faced with criminal proceedings, the risk of imprisonment of the Master and crew of 1 to 3 years and a fine for smuggling of Euro 87 million.

The extraordinary amount of the fine was based on a local law, which allows a multiplier of up to 4 times the market value of the assets involved in the alleged smuggling, encompassing the exchanged items, the subject fishing boat and – most substantively - the ship’s market value.

Despite the fact that the authorities’ interpretation of the Customs Code was questionable, rejecting the claim completely was not possible,. Nevertheless, the Owners were able to achieve a settlement at a much lower level than that initially claimed, albeit after incurring a significant costs and lost hire while the ship remained detained for the duration of negotiations with the authorities.

The Club is aware of at least two other instances of ships being detained and enormous fines being imposed by the Lome Customs authorities, for similar allegations. Crews should accordingly be alerted to the potential risk of purchasing food or other items from vendors that approach the ship. If however the worst should happen, the proactive and careful management of the claim is very important. Involving the club early on and obtaining fact-specific guidance from individuals with local experience can make a significant difference.

Recommended Mitigation Strategies

While incidents of smuggling allegations pose significant challenges, proactive management and adherence to established protocols can help mitigate risks and minimise potential liabilities. Given the rising number of smuggling cases and the increasing liabilities that might be, it is recommended to:

• Exercise heightened vigilance and caution and refrain from interaction of any kind with unauthorised vessels (or with personnel), especially in high-risk ports and regions. 
  
  
• Limit access to the vessel and closely monitor the surrounding area.
  
  
• Refer to Best Management Practices (BMP) West Africa (ukpandi.com)
  
  
• Seek guidance from the UK P&I Club Claims Executives and Safety and Risk Management