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C O N F I D E N T I A L SECTION 01 OF 02 SUVA 000169 
 
SIPDIS 
 
SIPDIS 
 
SINGAPORE ALSO FOR COAST GUARD (KIM) 
 
E.O. 12958: DECL: 03/15/2017 
TAGS: EWWT PHSA KR SN
SUBJECT: KIRIBATI NEW FLAG OF CONVENIENCE SHIP REGISTRY; 
FOLLOWING TUVALU EXAMPLE 
 
REF: 06 SUVA 319 
 
Classified By: Amb. Larry Dinger, Reasons 1.5 (b) and (d). 
 
Summary 
------- 
 
¶1. (C) Ship owners looking for a flag of convenience can now 
hoist the colors of the tiny Pacific island nation of 
Kiribati, which amended its maritime shipping act in June 
2006 to allow creation of a foreign ship registry. 
Singapore-based Sovereign Ventures Limited is the agent, as 
it is for Tuvalu and, reportedly a host of other nations. 
Sovereign is also involved in oil and gas exploration in 
North Korea.  Kiribati officials first mentioned the new 
ship-registration law to us last summer in the context of 
news accounts reporting a collision earlier in the year 
between U.S. and Kiribati-flagged ships in the Persian Gulf. 
Kiribati was certain none of its ships could be in the Gulf 
because the previous law allowed very limited registration. 
At the time we noted how false-flagging and other concerns 
would surely increase with an off-shore registry.  When 
embassy Poloff recently visited Kiribati, the Solicitor 
General acknowledged awareness of international concerns, but 
he claimed a need to generate foreign exchange had outweighed 
his and others' opposition.  End summary. 
 
Joining the crowd 
----------------- 
 
¶2. (C) The Kiribati parliament amended the country's 1983 
"Merchant Shipping Act" in June 2006 to allow creation of an 
open registry of foreign vessels.  Under the prior law, only 
Kiribati citizens or domestic companies could register 
vessels in Kiribati, and according to government officials 
all Kiribati-flagged vessels previously operated only within 
Kiribati waters or, at most, sailed between Kiribati and 
Pacific neighbors such as Fiji.  The creation of the new 
registry was driven solely by the desire to tap a new source 
of foreign cash, according to Kiribati Solicitor General 
David Lambourne.  Currently, three other Pacific Island 
nations have open registries: Tuvalu, Vanuatu and the Cook 
Islands.  Tuvalu claims to have earned more than 300,000 
dollars Australian (USD 235,000) in 2006 from its ship 
registry, run by Sovereign Ventures of Singapore.  Worldwide, 
more than fifty countries are said to operate open registries. 
 
¶3. (C) In August 2006, prior to the actual creation of its 
open registry, the Government of Kiribati asked the USG for 
information about an apparent case of false flagging. 
Following a collision with the USS McCampbell in the Persian 
Gulf in March 2006, a vessel named the Rokya I claimed to be 
registered in Kiribati.  According to Lambourne, there was no 
such vessel registered in Kiribati, nor was it possible, in 
his view, that any vessel registered in Kiribati at that 
time, under the 1983 Merchant Shipping Act, could be in the 
Persian Gulf.  The Kiribati government expressed its grave 
concern.  In that context, Kiribati officials informed 
Embassy Suva of the new open-registration law.  We sought 
guidance from Washington and then conveyed USG views about 
the difficulties open-registration could create.  During a 
recent visit to Kiribati, PolOff supplemented the 
conversation, relaying to Lambourne and the Foreign Ministry 
advice received from the U.S. Navy on how Kiribati could 
avoid accusations of false flagging, only to be informed that 
Kiribati had gone ahead and implemented the off-shore 
registry. 
 
In Questionable Company 
----------------------- 
 
¶4. (C) Lambourne said his government has handed over 
operation of the new registry to the same Singapore company, 
Sovereign Ventures, that Tuvalu uses.  An Internet search of 
Sovereign Ventures shows the company has close and 
long-standing ties to North Korea. According to Sovereign's 
www.maritimechain.com website, the company also manages 
 
SUVA 00000169  002 OF 002 
 
 
registries for Tuvalu, Kiribati, Mongolia, Panama, Belize, 
Dominica, Honduras and "many more worldwide."  Sovereign is 
part of the Korasia group of companies, which administered 
the Cambodia shipping register until an incident in 2002 in 
which the French Navy seized a Cambodian-flagged vessel 
smuggling cocaine. 
 
¶5. (C)   Captain John Hogan, head of the Suva-based Regional 
Maritime Program of the Secretariat of the Pacific Community, 
said the SPC tried to warn the Kiribati government away from 
the deal with Sovereign Ventures, whose owners he described 
as "pretty cunning."  Hogan said Lambourne and others had 
also tried to block the deal, but the Kiribati Transportation 
Minister pushed it through.  Hogan accused the minister of 
having accepted around the world airline tickets and other 
gratuities from Sovereign during negotiations.  Hogan said 
similar inducements were made to Tuvalu.  The Tuvalu 
Transport Minister recently returned from an all-expense-paid 
visit to Singapore, funded by Sovereign, and announced that 
the company has agreed to fund a Tuvaluan registrar and a 
clerk assistant at the Sovereign office in Singapore as well 
as Tuvalu's attendance at the biannual meetings of the 
International Maritime Organization.  (Note: The clerk is 
reportedly a former politician's niece.) 
 
Comment 
------- 
 
¶6. (C) Kiribati and Tuvalu have sidled into the clutches of a 
company and an industry that appear unlikely to benefit the 
Pacific region or the world.  The two countries' addition to 
the roll of those proffering flags of convenience, including 
potentially to terrorists, will not be a plus in U.S. 
relations.  The Embassy will keep the subject on its 
bilateral agendas.  It may be useful for the U.S. Coast Guard 
and other U.S. law enforcement and military authorities weigh 
in with their Kiribati and Tuvalu counterparts as well 
whenever the opportunity arises.  The April visit of a Coast 
Guard cutter to the Kiribati capital Tarawa could be an ideal 
moment to reiterate USG concerns.  End comment. 
DINGER