Enforcement First as Sulfur Regs Violation Attracts Criminal Charges

Monday June 10, 2019

In a landmark move, the US has started criminal prosecution proceedings following an alleged sulfur regs violation by the Panama-flagged M/T Ocean Princess.

Marshall Islands-registered vessel owner Lilly Shipping Ltd, Liberia-registered operator Ionian Shipping & Trading Corp. and New York-registered ship manger Ionian Management Inc are all named as defendants in the case.

While there have been multiple sulfur regs violations within US waters in the past, historically these have been dealt with via civil actions at agency level with fines levied as per EPA guidance.

It is understood this is the first time a vessel emissions violation has been referred to the Department of Justice for criminal prosecution.

Legal documents filed in the District Court of the Virgin Islands state that on multiple occasions between March 2, 2016 and September 5, 2018 the vessel was knowingly operated with fuel that exceeded the emissions control area (ECA) sulfur cap for bunkers of 0.10% that has been in place since 2015.

The tanker was not fitted with a scrubber or other approved equivalent method of compliance, the court documents note, which may have otherwise allowed the vessel to legally operate with high-sulfur fuel.

But not only did the bunkers exceed the permitted sulfur spec, the parties stand accused of transferring cargo into the vessel's bunker tanks on numerous occasions, and creating corresponding false entires in the Oil Record Book as well as producing false bunker delivery notes in an effort to cover up their actions.

On July 11, 2018 in particular, the defendants are also accused of obstructing an investigation by the US Coast Guard and Department of Homeland Security to determine compliance wth sulfur regs, including falsely stating that the vessel routinely lifted ULSD in Galisbay, St Martin, and instructing lower-level crew members to lie to US Coast Guard Inspectors.