Transnational Crime and the Developing World

Table U. Flags of Convenience
Antigua and Barbuda Equatorial Guinea Marshall Islands
Bahamas Faroe Islands Mauritius
Barbados Georgia Moldova
Belize Gibraltar Mongolia
Bermuda Honduras Myanmar
Bolivia Jamaica Panama
Cambodia Korea, Dem. People’s Republic São Tomé and Príncipe
Cayman Islands Lebanon St. Vincent and the Grenadines
Comoros Liberia Sri Lanka
Curaçao Madeira Tonga
Cyprus Malta Vanuatu
Although legal, the use of FOCs is a major enabling factor because it often allows vessel owners to
avoid accountability. This is the same issue presented by anonymous shell companies, as the absence
of transparency allows beneficial owners to avoid identification and accountability. Countries that offer
FOCs typically have much less stringent maritime regulations and are “either incapable of, or deficient
at, monitoring their vessels.” 283 Three of the countries listed above—Bolivia, Moldova and Mongolia—are
landlocked. In addition, vessel owners employ FOCs in order to take advantage of minimal fees and low
or no taxes.
The use of anonymous shell companies not only conceals beneficial ownership but allows organizations
to reinvoice catches, obfuscating their illegal origin. 284 As shown in Figure V, Shell Company A operates
the IUU fishing vessel, which sells its catch to Shell Company B. This company reinvoices the catch to
make it appear that the fish are legally caught, essentially laundering the catch. The fish are then resold
to a fish dealer with “legal” documentation; the dealer may or may not be aware that the fish were
caught illegally.
283
Griggs and Lugten, “Veil over the Nets,” 160.
284
Clare, “Quest to Combat Illegal Fishing,” 72.
Global Financial Integrity
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