The Icelandic District Prosecutor has searched the Eimskip offices in Iceland looking for documents relating to the sale of the vessels Goðafoss and Laxfoss in 2019. The investigation is to determine whether ship scrapping regulations have been breached.

Eimskip reached an agreement on the sale of its two container vessels for USD 3.9 million (EUR 3.5 million) at the end of 2019. The container ships Goðafoss and Laxfoss were 24 years old at that time.

Parallel to the sale, Eimskip chartered the vessels back until planned delivery of two newbuilds. Due to adverse market conditions, the transportation company redelivered the vessels to their new owners in the spring of 2020, earlier than expected. Subsequently, the new owners made the decision to sell the vessels for recycling in India.

Eimskip says in a statement that it believes that it complied with laws and regulations in the sales process. In September 2020, the company did say it ‘could have made greater requirements towards the buyer in light of the age of the vessels. That could be done by including a provision in the sales contract that if the vessels should be recycled, it would be done in a recycling yard that complies with European standards. Eimskip apologises for not doing so.’

The company stresses its goal was never to profit from higher recycling prices in other parts of the world.

Financial consequences

The shipping company says it cannot estimate possible financial effects if it should be found that the company acted in breach of the Icelandic Waste Management Act, as it does not state specific sanction amounts. However, the Icelandic Environmental Agency’s authority can apply administrative fines towards legal entities amounting up to ISK 25 million (around EUR 171,000).

Picture by Eimskip.