The Tigris is owned by Oaktree, an American private equity fund, and has been leased long-term to the Danish company Maersk Line; its daily operations are conducted by Rickmers Shipmanagement, a company with offices in Germany and Singapore. The Tigris crew is Asians and Europeans. It is registered as a Marshall Islands ship, as a “flag of convenience.” (Similar to Liberia for ships, and Delaware for corporations.) Iran claims that is seizure and detention of the ship and crew is lawful, based on a $3.6 million Iranian court judgment against Maersk, arising from a 2005 cargo delivery dispute. Even if Iran’s seizure of the ship were lawful (which is questionable), I am not aware of any legal authority for Iran to continue to detain the crew.
The Marshall Islands lie near the Equator and the International Date Line. They were colonized by Germany (1886), and then Japan (1914). Following Japan’s defeat in its war of aggression against the United States, the Marshalls passed to the United States as a trust territory. The Marshalls were granted self-government in 1979, and independence in 1986. Their relationship with the United States is presently governed by the Compact of Free Association between the Republic of the Marshall Islands and the United States of America. The relevant portion of the Compact provides:
“Section 311 (a) The Government of the United States has full authority and responsibility for security and defense matters in or relating to the Republic of the Marshall Islands. (b) This authority and responsibility includes: (1) the obligation to defend the Federated States of Micronesia and its people from attack or threats thereof as the United States and its citizens are defended;… (c) The Government of the United States confirms that it shall act in accordance with the principles of international law and the Charter of the United Nations in the exercise of this authority and responsibility.”
So, as applied to the Maersk Tigris, what are duties of the U.S. government “as the United States and its citizens are defended”?
Under traditional international law, a ship bearing a nation’s flag was the equivalent to the soil of that nation. Illegally seizing a flagged ship was legally equivalent to illegally seizing part of nation’s land.
The United States and the Republic of the Marshall Islands have different policies for which commercial ships may fly their nation’s flag. The Marshalls essentially sells flags of convenience. Neither the ship nor its crew need any genuine connection with the Republic of the Marshall Islands. But for a ship to fly a United States flag, the ship must be owned by a U.S. citizen or corporation. If the latter, the majority of the corporation’s board of directors must be U.S. citizens. When the ship departs a United States port, the ship’s crew must be 75% Americans. The ship must have a U.S. master. Vessel Documentation Act (1980),94 Stat. 3453, 46 U.S. Code sects. 8103, 12103, 12131.
So the Pentagon lawyers had a plausible argument that the Compact’s obligation that the U.S. defend the Marshalls “as the United States and its citizens are defended” does not encompass the Tigris Maersk. The kind of relationship that the Tigris Maersk has with the Republic of the Marshall Islands is not the kind of relationship that could create a flag relationship with the United States. The Tigris does not have Marshall Islands owners, nor is it under the command of a Marshall Island master, nor does it have a mostly-Marhsalls Island crew when departing that nation’s ports.
On the other hand, the U.S. statute about flagging does not mean very much in practice. In 1987, eleven Kuwaiti oil tankers in the Persian Gulf were re-flagged as U.S. ships, and given U.S. Navy protection. To comply with the U.S. statute, the Kuwaiti owners set up a pure shell corporation in the United States, with American directors. The requirement for the 75% U.S. crew was irrelevant, since the Kuwaiti ships were not departing U.S. ports. Thus, like the Maersk Tigris, the Kuwaiti ships were not really owned by Americans, nor did they have American crews.
Thus, the existence of a shell corporation in the U.S. for ships that were actually owned by a Kuwaiti business (and in turn owned by the Kuwaiti government) could be considered a distinction without a difference. Thus, the U.S. would have an obligation to defend the Maersk Tigris just as it defended the Kuwaiti tankers.
The simplest position is that a flag is a flag, and if a ship lawfully bears a Marshalls Island or a United States flag, the U.S. defense obligations are identical. This appears to the position of the U.S. State Department, which said that the Compact of Free Association does apply to the Maersk Tigris; the Pentagon now says that it accepts the State Department’s position.
On May 1, Secretary of State Kerry issued a statement of “warmest congratulations” to the Republic of the Marshall Islands on the anniversary of its independence. He said that President Obama and he “look forward to continuing to work together” on issues such as “improving disaster preparedness and response,” and offered his “best wishes for continued progress, prosperity, and peace in the coming year.” He did not mention the Compact of Free Association, nor did he refer to the U.S. defense duty to the Republic.
Not every seizure of a nation’s ship requires an immediate military rescue. I do not know what the Obama administration is saying in private to the Iranian hostage-takers. But as far as I know, even if everything the Iranian government claims is true, and Iran’s seizure of the ship is valid under intentional law, the continuing detention of the crew is unlawful.
The Tigris Maersk crew are not the only persons currently being held hostage by Iran. Among other hostages is Washington Post reporter Jason Rezaian. As in the Jimmy Carter administration, feeble and feckless responses to Iranian hostage-taking emboldens totalitarian aggression everywhere.
Further reading: Department of the Navy, The Commander’s Handbook of the Law of Naval Operations, sections 3.10, 3.10.1 (July 2007); Michael R. Snipes, Re-flagged Kuwait Tankers: The Ultimate Flag of Convenience for an Overall Policy of Neutrality (graduate thesis, Judge Advocate General’s School, April 1988), pages 24-27. Thanks to my intern Noah Rauscher for outstanding research assistance.