The Icelandic district prosecutor has been granted permission to raid the offices of shipping company Eimskip in order to conduct an inquiry into possible legal irregularities involving the sale of two scrapped ships to India in a case that will likely cause concern for many other shipowners across Europe.

The prosecutor has requested specific documents relating to the sale of the 1，465 TEU pair Goðafoss and Laxfoss in 2019， which the Environment Agency of Iceland reported to the district prosecutor in 2020. Eimskip said through Nasdaq Iceland that no individuals have legal status in the matter.

The case revolves around the scrapping of the 1995-built ships，which were sold to cash buyer GMS and then offloaded to the Malwi Ship Breaking and Gohilwad Ship Breaking yards on India’s west coast.

The investigation relates to whether the country’s Act. No. 55/2003 on the treatment of waste and subsequent regulations have been infringed. Since 2018， European legislation has outright banned the demolition of ships over 500 gross tons anywhere except for licensed recycling sites， and similar restrictions have been in effect in Iceland since a mere year ago.

“It is impossible for the company to estimate possible financial effects as the Act contains sanctions provisions without stating any specific amounts. The only amount referenced in the Act relates to the Icelandic Environmental Agency’s authority to apply administrative fines towards legal entities amounting up to ISK 25m ($192，435).”

Eimskip said earlier that it believes that it complied with laws and regulations in the sales process. “Eimskip takes the matter seriously as the company， its management， and employees place great emphasis on social responsibility in their work and have long paid attention to environmental issues in their operations.”