Dubai-based ship recycling company GMS has received approval from U.S. authorities to dismantle four container vessels that were previously subject to Iran-related sanctions, a development that could support efforts to reduce the number of non-compliant vessels operating in global shipping routes, according to the company’s chief executive.
Industry concerns have grown over a growing “shadow fleet” of vessels operating outside standard insurance, regulatory, and environmental compliance systems. Many of these ships are linked to sanctioned trade networks and are also considered a risk to maritime safety due to their lack of maintenance standards, raising concerns about potential oil spills, fuel leaks, and other environmental hazards in busy sea lanes.
GMS, which purchases vessels for recycling and processes them through regulated shipbreaking yards, primarily in Asia, said it had been in discussions with U.S. authorities for several months regarding the handling of sanctioned ships. The company confirmed that it acquired the four vessels from a seller not itself subject to sanctions, following authorization from the U.S. Treasury Department. This marks one of the company’s first transactions involving privately sold vessels of this type.
According to GMS founder and CEO Anil Sharma, the arrangement reflects efforts to transition certain ships out of unregulated trading activity and into controlled recycling channels. He noted that vessels operating outside standard regulatory frameworks present broader challenges for maritime oversight and global trade compliance.
The approval process does not include broad licensing arrangements, and U.S. authorities reportedly require detailed oversight of financial flows and reporting mechanisms to ensure that proceeds do not benefit restricted entities. The U.S. Treasury Department has not publicly commented on the transaction.
The scrap value of large container vessels can reach tens of millions of dollars depending on size, condition, and market demand. GMS reported that two of the four ships currently have crews on board and valid insurance for transit, and are expected to be sent to India for dismantling and recycling.
The company also indicated interest in expanding into tanker recycling involving sanctioned vessels, though it said market conditions remain a limiting factor due to strong demand in the global shipping sector, which reduces incentives for vessel retirement.
GMS noted that global shipping conditions continue to influence recycling activity, with higher freight demand keeping many vessels in operation longer than usual. As a result, only a limited number of ships are currently being withdrawn from service for dismantling.
The company added that structured recycling arrangements supported by regulatory approval could play a role in improving environmental outcomes and strengthening compliance in the maritime sector by reducing the number of high-risk vessels operating outside established standards.
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