A cargo ship headed for northern Europe was seized in Philadelphia by U.S. law enforcement last month, apparently tipped off to the fact that the ship was carrying 20 tons of cocaine. JPMorgan is involved.
A PR Black Eye for JPMorgan
The owner of the ship is the Switzerland-based Mediterranean Shipping Company. Yet, in a bizarre twist on the concept of “six degrees of separation”, the Mediterranean Shipping Company is holding in a fund run by JPMorgan Chase.
Setting aside jokes about wealthy investment bankers that would have preferred a few samples prior to the cocaine seizure, J.P. Morgan Chase does not actually have any operational control over the vessel.
JPMorgan Chase had no comment on the matter.
It is still a black eye for the massive investment bank, and JPMorgan Chase really should have known better than to invest in Mediterranean Shipping Company, even though it is the second largest shipping company in the world.
Liberian-Flagged Ships Are A Recipe for Crime
Any company that permits its ships to be “flagged” in the country of Liberia should immediately raise suspicions. JPMorgan Chase was asleep at the wheel.
This is known as a “flag of convenience”, in which a ship’s owners will register a merchant ship in some country other than the country of its owners. Sure, Switzerland may be landlocked, but that doesn’t mean that a ship cannot be flagged there.
International law requires that it should be registered somewhere, and therefore be subject to the laws of that country.
Liberia has long been one of the two most common flags of convenience, the other being Panama. Liberian registry allows shipping owners to avoid the complex rules and regulations of their home country while taking advantage of the substantially deregulated situation in Liberia.