The Hormuz precedent: Maritime tolls and the future of global shipping

One can see the minister’s point: if some countries get to violate maritime rules, why shouldn’t others?

Maritime toll booths, however, would cripple global shipping. That is precisely why they were abolished generations ago.

Until 28 February, maritime traffic flowed smoothly through the Strait of Hormuz, with an average of some 140 ships transiting the chokepoint every day.

Since then, nothing has been the same. In the first days after the US–Israeli attack on Iran, Tehran allowed virtually no ships to pass. It has since started letting a select few through – but only those that obtain permission from Iranian authorities and pay a fine.

Earlier this month, the US government said it would sanction anyone who pays that fine, yet sanctions by a single country, however powerful, are unlikely to stop the payments.

Maritime tolls were commonplace for centuries. In the 1400s, Denmark began levying the so-called Sound Dues on ships passing through the Öresund; at their peak, those tolls generated two-thirds of the Danish government’s income.

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The system remained in place until 1857, when leading seafaring nations concluded that the world needed a more principled form of maritime governance.

Tolls, along with other harmful actions by coastal states, had made shipping dangerous, and if countries were to prosper, that had to change.

Efforts to establish shared rules intensified through the 20th century and culminated in the signing of the United Nations Convention on the Law of the Sea (UNCLOS) in 1982.

Since then, all but a handful of countries, including the United States and Israel, have signed and ratified UNCLOS. (Iran has signed but not ratified the convention.) UNCLOS also functions as customary international law, binding even on those who have not formally ratified it.

UNCLOS’s most important pillar is freedom of navigation. The treaty grants all vessels the right to sail on every part of every ocean, subject only to the requirement of innocent passage, that is, traversing the waters without causing harm.

It makes no difference whether coastal states are friendly with a ship’s flag state or the country where its owner is based: freedom of navigation applies universally.

Freedom of navigation, and UNCLOS more broadly, only works when countries are genuinely committed to it.

In recent years, that commitment has eroded. China has violated it, Russia has too, and so have the United States, Israel, and Iran. Imposing tolls on ships is an unambiguous violation of UNCLOS, yet Iran can do so because the convention has no enforcement body.

For years, the United States served as the de facto guardian of freedom of navigation. Now, embroiled in this war, Washington is hardly a neutral party, and has so far proved unable to reopen the Strait of Hormuz to free passage.

Iran, then, continues to control which ships transit the strait, and profit from the arrangement. That other countries sitting astride maritime chokepoints might find the model attractive is hardly surprising, and precisely that has now come to pass.

“As the president has instructed, Indonesia is not a peripheral country. We sit on a strategic global trade and energy route, yet ships pass through the Malacca Strait without being charged – I’m not sure whether that’s right or wrong,” Finance Minister Purbaya Yudhi Sadewa said in May, as Channel News Asia reported.

The outlet added that Purbaya believes a similar approach could generate significant economic value if implemented in the Malacca Strait through cooperation among the three littoral states, with Purbaya elaborating: “If we split it three ways – Indonesia, Malaysia, and Singapore – it could be quite substantial. Our stretch is the largest and the longest.”

Were the three countries to team up and levy tolls, who could stop them?

The question extends further: could France and Britain start charging in the English Channel?

Could Singapore establish a toll booth in the Singapore Strait? Panama already charges fees for passage through the Panama Canal, as does Egypt for the Suez Canal, both justified on the grounds of maintaining the waterway.

What if either country decided to turn those fees into a profit centre? The result would be chaos, and the damage to the world’s economies would be severe.

Countries negotiated UNCLOS for good reason, and it would be a tragedy if the global maritime order frayed because a handful of states chose to disregard the rules.

Ending the war in Iran may be beyond the reach of most nations – but standing collectively in defence of the maritime order is not.

Elisabeth Braw is a Swedish security expert and Senior Fellow with the Atlantic Council.