According to the report, offshore oil rigs are treated as ships and routinely register overseas, a move that can elude safety laws and inspection standards in the United States.
In the case of Deepwater Horizon, the newspaper reports, the oil rig was built in South Korea, operated by a Swiss company contracted by BP and registered with the Marshall Islands.
The international loophole is now emerging as a central factor that led to the worst environmental disaster in U.S. history. Lawmakers are taking notice.
"Today, these oil rigs can operate under different, very minimal standards of inspection established by international maritime treaties," said Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation Committee.
The convoluted hodgepodge of responsibility, drilling experts say, fostered a confusing chain of command on Deepwater Horizon, which may have contributed to the disaster, according to the newspaper.
According to the L.A. Times, the Marshall Islands assigned the Deepwater Horizon to a category that allowed lower staffing levels. At least one survivor of the Deepwater blast said that understaffing jeopardized the safety of the oil rig.
"Over the years, the manning dwindled down and down," said Douglas Harold Brown, who was the oil rig's chief mechanic. "I believe that safety was compromised by this."
More on the Disaster in the Gulf:
Water on Fire: Controlled Burns of Spilled Oil
BP's "Burn Box" Ignites Oil Collecting on Gulf
Oil Drowning Small Businesses
11-Year-Old Draws for Gulf Relief
Oil Spill Underwater Sensors to Gauge Flow
BP Speeds up Containment Plan for Gulf Oil Spill
Govs: Media Over-Hyping Extent of Spill Damage
Allen: Oversight Needed of BP's Claim Payments