What is Maritime Fraud? State the various factors that lead to commitment of maritime frauds.

Maritime fraud refers to unjust and illegal practice of obtaining goods or money of one party by another, which have otherwise undertaken financial or trade specific obligation.

At time several parties may collectively work to defraud the other. Some the categories of maritime fraud on basis of involved parities are:

1 Fraud by a trader against bank, shipper, insurer, shipowner or another trader

2 Charter against ship owner

3 Shipowners and trader against insurer

4 Charter and shipowner against trader

5 Barratary and unlawful seizure of ships and their cargo (defined by Inter-Government Maritime Consultative Organisation Assembly).

These usually involve documentation and are committed by people inside or on the fringe of the maritime community. 

DIMENSIONS AND CAUSES

Liner shipping involves different types of cargo, collected from different shippers and from various ports. At times multimodal transport is involved as well.

These aspects together make the cargo vulnerable to risks and frauds, posing a threat to international business at large.

The notion of the apparent bargain’ is obvious. The buyer is initially attracted to the prices and terms & conditions as quoted by the seller, in which the buyer often tends to overlook the inherent risks and possibilities of frauds.

There are many factors leading to maritime frauds as outlined:

• Multiple parties are involved (buyers, sellers, shipowners, banks, insurers, agents, port authorities, custom personnel, and charterers)

• Concerned governments are not very vigilant and have an indifferent attitude.

• Instilling trust, which leads to non-verification of documents, overseeing involved risks.

• Timely detection and lack of action. 

• Liner cargo type is complex due to its non-uniform nature. Multi-modal transportation has further complicated the situation.

• Legal complexities in handling international disputes.

• Lack of expert evidence and timely surveys

• Lack of information dissemination and sharing.

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