Microkhan by Brendan I. Koerner

The Flag Racket

July 21st, 2009 · No Comments

SisterPingOnce again, we’re gonna use our platform here to highly recommend The Snakehead, Patrick Radden Keefe’s non-fiction account of the 1993 Golden Venture disaster. The book would be awesome enough if it just told the tale of Sister Ping‘s rise and fall as the tsarina of human smuggling in New York’s Chinatown. But The Snakehead offers a whole lot more—it’s chock full of knowledge-expanding goodness, touching on everything from FBI informant policies to the Kenyan restaurant scene. And then there’s this excellent explainer on the origins of the flags-of-convenience scam, by which substandard boats are permitted to roam the oceans under the aegis of Panama, Liberia, or landlocked Mongolia:

Until the early twentieth century, there was generally some correlation between the home port or ownership of an oceangoing vessel and the nationality of the flag that it flew. But during Prohibition the American owners of two cruise ships, frustrated that they could not serve alcohol on board, were permitted to reregister their ships in Panama, despite the fact that neither the companies nor their ships, nor the routes that those ships took, had any special relationship with the Central American country. When, on December 5, 1922, the ships lowered their U.S. flags and raised the red, white, and blue flag of Panama, they ushered in a phenomenon that would become known as “flags of convenience.”

The Golden Venture was a perfect case in point: an aging, rust-corroded freighter that was doing nothing more than shuttling goods between Vietnam and Cambodia when it was called upon to take 300-plus Fujianese immigrants across the Atlantic Ocean. And it made that long, perilous journey under the flag of Honduras.

Check out a great backgrounder on the numerous downsides of flags-of-convenience here (PDF). Panama is still the world leader, by a country mile.


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