Dead in the Water: Murder and Fraud in the World's Most Secretive Industry

by Matthew Campbell

In the early twentieth century, most shipowners paid to register under the jurisdiction of major marine powers like Britain and the United States, benefiting from their legal regimes and military protection. But eventually, entrepreneurial officials in countries like Panama realized they could raise revenue by offering what’s now called a flag of convenience. By registering their vessels in these places, owners could avoid developed-world rules on wages, working hours, and union membership, while also being subject to fewer inspections and a more relaxed attitude to regulation. The practice got a running start during Prohibition, when American cruise liners were able to serve booze to passengers by flagging themselves as Panamanian, and became increasingly common after the Second World War. Today, Panama, the Marshall Islands, and Liberia serve as the ostensible homes of more than a third of the global merchant fleet, and there are even flags of convenience available from places like Mongolia and Bolivia, landlocked countries with no actual maritime industries to speak of.