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Concordia: Russian Seafarers Face Challenges in Receiving Pay

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Published Apr 1, 2022 8:58 PM by The Maritime Executive

Russian seafarers are encountering difficulties after the invasion of Ukraine because some shipping companies are unable to complete payment of their salaries, given the economic sanctions imposed on Russia. 

Most of the sanctions targeting Russia restrict financial transactions, and many (but not all) Russian banks have been removed from the international financial messaging system, Swift. The decision to cut Russian banks from global payment systems - coupled by moves by money transfer giants like Western Union, Paypal, Wise, Remitly, TransferGo and Zepz to suspend services in Russia - is hitting Russian seafarers hard.

Swedish product tanker operator Concordia Maritime is among the shipping companies that are having difficulties paying Russian seafarers due to the sanctions.

“About 70 of our officers on board Concordia Maritime’s ships are from Russia. Due to the existing sanctions, it is challenging to pay salaries to these hard-working sailors. Together with our technical manager, we are trying to find a solution to this,” said Erik Lewenhaupt, Concordia Maritime CEO.

Concordia Maritime has been lucky in other ways: when the war broke out, its fleet carried no Russian cargoes, nor were any of its ships on charter to any Russian company. Since the outbreak of the war, Concordia has refrained from loading in Russian ports, and it plans to continue this policy until further notice.

The payment challenge means that some Russian seafarers are personally feeling the impact of the invasion, with potential implications for maritime commerce. In February, the International Chamber of Shipping (ICS), which represents 80 percent of the world’s merchant fleet, warned of supply chain disruptions should the employment of Russian and Ukrainian seafarers be impeded.

The BIMCO / ICS Seafarer Workforce Report 2021 suggests that there are nearly 200,000 Russian seafarers, representing 10.5 percent of the global seafaring workforce. Ukraine accounts for at least 76,000 international seafarers, though Ukrainian sources suggest that the number may be higher.

“We see that seafarers are the innocent third party in this conflict, and we are therefore concerned with facilitating a good and safe working environment on board, safe travel to and from the ships, and ensuring that salary earned in service is paid,” said Harald Solberg, Norwegian Shipowners’ Association CEO.