Sanctions Evasion Reference

Flag of convenience

Registration of a ship in a state with which its owners have no genuine connection, chosen for cost, tax or regulatory reasons.

also known as

FOC

reviewed

2026-08-20

Open registration is lawful and accounts for a large share of world tonnage. The phrase describes a commercial choice, and by itself it says nothing about a vessel’s conduct.

It becomes relevant where the registry’s supervision is nominal and the transfer between registries is rapid. A vessel that changes flag several times in a short period, particularly to registries with limited oversight, is described in the 2020 advisory as displaying a deceptive practice rather than a commercial preference.

Where this term is used

  • What is flag hopping? — Re-registering a ship repeatedly between flag states, often to registries with limited oversight, so that its regulatory history is broken and its documented identity keeps changing.
  • What is opaque marine insurance? — Presenting protection and indemnity or hull cover from a provider that cannot be identified, or whose ability to meet a claim cannot be established, in order to satisfy a requirement to be insured.
  • What is a ship-to-ship transfer? — Transferring cargo directly between two vessels at sea, rather than through a port, so that the cargo changes hands where there is no port authority, no customs entry and no independent record.

Related terms

  • Flag state — The country in which a ship is registered, whose law governs the vessel and which is responsible for inspecting and certifying it.
  • Open registry — A ship registry that accepts vessels owned by foreign nationals without requiring a national ownership or crewing link.
  • Zombie registry — A ship registry that continues to issue documentation in a state's name after that state has withdrawn authorisation, or that never had it.

Sources

  1. Guidance to Address Illicit Shipping and Sanctions Evasion Practices. U.S. Department of State, U.S. Department of the Treasury and U.S. Coast Guard, 2020. Global maritime advisory, 14 May 2020.

All glossary terms