In early February, the U.S. Navy seized a Russian tanker it suspected of smuggling contraband oil from Iraq. After chemical analysis by the United States confirmed that the tanker's oil came from Iraq, newspapers reported that the cargo could be sold. Who can confiscate contraband, who can sell it, and where does the money go?
One country can seize the goods of another if 1) a state of war exists--even low-level skirmishing counts, such as the current hostilities in the Iraq area--and the goods are considered military contraband, or 2) the shipment violates a United Nations embargo resolution, which binds all U.N. members. A U.N. embargo limiting Iraqi oil sales was imposed after it invaded Kuwait in 1990.
Both scenarios apply to the Iraqi oil, but the U.N. embargo will probably be applied because formal resolutions take precedence over the more ad hoc strictures of international law. That means the oil will be sold on the international market and the proceeds placed in escrow. That amount will be deducted from what Iraq can legally sell under the embargo.
The U.N. embargo is silent on the fate of contraband vessels, so international law will probably be invoked. The Russians could contest the seizure of their tanker in a "prize hearing," which would be held in the nearest country--Oman--allied with the seizing country. The prize hearing would determine whether the tanker was contraband, and, if so, allow the United States to auction it off. Most observers expect the United States to return the tanker as part of a political compromise. (The Iraqis have no similar legal right to contest the seizure.)
Explainer thanks Professor Yoram Dinstein of the Naval War College and Professor Alfred Rubin of Tufts University.