Earlier this week we wrote on the U.S. seizure of MT SKIPPER and the questions it raised. Today we take a closer look at what this action may mean for sanctioned vessels and the legal implications it has left.
Following the SKIPPER seizure maritime operators are prone to ask, does every vessel on OFAC’s sanctions list face potential boarding and confiscation? The answer comes from the underlying legal authority for nearly all sanctions enforcement, particularly the International Emergency Economic Powers Act (IEEPA). While IEEPA does authorize blocking transactions, freezing bank accounts, and prohibiting U.S. persons from dealing with sanctioned entities, it does not contain a generally applicable seizure and forfeiture provision like those under which the SKIPPER warrant was issued. While these are impactful measures, they do not transfer title in property.
The absence of a seizure and forfeiture provision actually distinguishes IEEPA from its predecessor, the Trading with the Enemy Act (TWEA), which did include “vesting” authority for permanent seizure during wartime. Congress deliberately omitted these powers from IEEPA when enacting it in 1977 because IEEPA was designed for peacetime emergencies. With no seizure or “vesting” authority, sanctioned vessels are not subject to the type of seizure carried out on SKIPPER.
However, IEEPA operates through blocking and freezing mechanisms, not seizure authority. The statute does not contain a provision authorizing the government to physically seize and confiscate property. Blocking freezes property in place and prohibits transactions, while seizure involves taking physical custody and control. This distinction is crucial: violations of IEEPA sanctions programs alone cannot give rise to seizure like that of the SKIPPER. A vessel that violates sanctions by carrying prohibited cargo or conducting transactions with sanctioned entities may be subject to penalties, fines, and blocking designations, but IEEPA itself provides no mechanism for the government to board and seize the vessel on the high seas.
The seizure of MT SKIPPER underscores how our understanding of what the law allows can be shaped by ordinary practice rather than the law itself. It is a compelling reminder that legal authorities exercised day in and day out by maritime states can be applied more creatively to accomplish what at first blush appears to be outside law’s reach. The U.S. leveraged three key legal elements: the Coast Guard’s broad boarding authority under 14 U.S.C. § 522, the vessel’s stateless status under international maritime law, and terrorism-related asset forfeiture statutes that reach beyond typical IEEPA sanctions enforcement and act against the threat perceived in the “shadow fleet.”
While the operation demonstrates sophisticated use of existing legal authorities, it also highlights unresolved tensions in international maritime law. The step from establishing statelessness and boarding rights to full seizure and confiscation occurs in what scholars describe as a “jurisdictional grey zone”—an area where domestic law claims authority but international law principles remain unsettled. The precedent set by the SKIPPER seizure suggests that shadow fleet vessels operating with falsified registrations face not merely financial penalties but physical interdiction and asset forfeiture, fundamentally altering the risk calculus for sanctions evasion. Yet this enforcement model depends critically on the combination of statelessness, terrorism connections, and domestic judicial process—a formula that may not apply uniformly to all sanctioned vessels.
For more information on sanctioned vessels and/or seizures, please contact us at: info@chaloslaw.com
