SecProbe.io

Mail Stop 3561
        August 24, 2007

Ole B. Hjertaker
Ship Finance International Limited
14 Par-la-Ville Road
Par-la-Ville Place
Hamilton, HM 08
Bermuda

Re: Ship Finance International Limited
 File No. 001-32199
 Form 20-F:  For the Year Ended December 31, 2006

Dear Mr. Hjertaker:

We have reviewed the above referenced filing and have the following comments.
Unless otherwise indicated, we believe you shoul d revise future filings in response to
these comments.  If you disagree, we will cons ider your explanation as to why a revision
is unnecessary.  Please be as detailed as necessary in your explanation.  We may also ask
you to provide us with information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

 The purpose of our review process is to assist you in your compliance with the
applicable disclosure requirements and to enhance the overall disclosure in your filings.  We look forward to working with you in thes e respects and welcome any questions.  Feel
free to call us at the telephone numbers  listed at the end of this letter.

Please file your response to our comment s via EDGAR, under the label “corresp,”
within ten business days from the date of this letter.

Ship Finance International Limited
August 24, 2007
Page 2

Form 20-F:  For the Fiscal Year Ended December 31, 2006

Item 5. Operating and Financial Review and Prospects

Overview

Revenues
1. We note that you allocate $6,500 per day from each time charter payment from
Frontline Charterers as finance lease se rvice revenue generated by your vessels.
Please tell us the reason that this amount is disaggregated and recorded as revenue
prior to allocating the charter payments (received) between fina nce lease interest
income and finance lease repayment.  Please cite any accounting literature that you believe supports your accounting treatment. As a part of your response, please describe the nature of the separate  services that you provide which result in
the recognition of finance lease service revenue.
2. We note that you have cancelled certain char ters with Frontline and agreed to pay
compensation to them as a result.  Please  tell us the type of leases you cancelled
(sales-type, direct fina ncing, or operating), whethe r your lease arrangements
provided for such compensation, how amounts were determined, and how you accounted for the compensation.

Critical Accounting Policies and Estimates

Revenue Recognition
3. We note that 48 of your company’s vessel charters were accounted for as sales-
type leases as of December 31, 2006.  We  also note that a)  the estimated un-
guaranteed residual value accruing to the benefit of the lessor and b) the implicit interest rate (of your leases), which is applied to determine the present value of
both the minimum lease payments and th e un-guaranteed residual value of your
sales-type leases, are important estim ates when determining the amount of
unearned income that should be recorded under sales-type  leases.  Due to i) the
significance of the aforementioned estimates  to the amount of income that will
ultimately be recognized under your sale s-type leases and ii) the degree of
judgment and subjectivity involved with ma king such estimates, please tell us and
expand your discussion of revenue rec ognition in the “Critical Accounting
Policies and Estimates” section of MD&A to disclose information including, but
not limited to, the following:

• The manner in which management determ ines the un-guaranteed residual value
of assets leased under sales-type leases.
• The manner in which management determines the implicit interest rate which is

Ship Finance International Limited
August 24, 2007
Page 3

applied to determine the present value of both the minimum lease payments and
the un-guaranteed residual value associated with your sales-type leases.
• How accurate your estimates of the un-guaranteed residual value of your leased
assets have been in the past.
• Whether your estimates and assumptions ha ve changed in the past and/or likely
to change in the future.
• The reason(s) there is uncertainty attach ed to your estimates and assumptions.

Refer to the “Commission Guidance Rega rding Management’s Discussion and
Analysis of Financial Condition and Resu lts of Operations” (FR-72) for further
guidance.

Results of Operations
4. We note that your reported profit-sharing re venue decreased significantly in fiscal
years 2005 and 2006, despite an increase in  the number of ve ssels that have
transitioned into operation under their charter agreements with Frontline
Charterers.  You have attributed the d ecline in profit sharing revenue to the
decrease in the average TCE revenue earned by your vessels while employed by
Frontline Charterers.  To the extent known, please tell us and expand your discussion in MD&A to discuss the underl ying factors which have resulted in the
decline in TCE revenue earned by your vessels that are employed by Frontline Charterers.

Financial Statements

Consolidated Balance Sheets
5. You state in the section of your Form 20-F titled “Risks relating to our Company”
that your loan facilities c ontain financial covenants that require you to maintain
available cash on a consolidated basis of not less than $25 million.  However, we
note that your balance sheet only refl ects a restricted cash balance of
approximately $12.9 million.  Furthermore, based upon your disclosure in Footnote 8 to your financial statements, it a ppears that the restri cted cash reflected
in your balance sheet is pr imarily comprised of deposits  held as collateral by
certain banks in connection with your  interest rate swap and bond swap
arrangements.  In this regard, please tell us why the $25 million of cash that you are required to maintain in connection w ith the financial covenants to your loan
facilities have not been incl uded in your restricted cash balance.  As a part of your
response, please specifica lly state whether you are
legally  restricted from the use
of this cash as a result of your financia l covenants or any other terms contained
within your loan facilities.

Ship Finance International Limited
August 24, 2007
Page 4

Consolidated Statements of Cash Flows
6. We note that the operating activities secti on of your consolidated statement of
cash flows for the fiscal year ended De cember 31, 2006 includes an adjustment
for the gain on sale of assets of a pproximately $26.5 million.  However, we note
that your consolidated statement of operat ions for the fiscal year ended December
31, 2006 only reflects a “Profit / (loss) on sale of assets” of approximately $9.8
million.  Please reconcile between the am ounts disclosed in your statement of
cash flows and your statement of operations .  Alternatively, if the aforementioned
amounts are unrelated, please disclose the caption in the statement of operations
that includes the gain on the sale of assets.  In addition, please expand the
footnotes to your financial statements to include all other disclosures outlined in
paragraph 47 of SFAS No. 144.
7. We note that the cash outflows associated with deemed dividends paid have been
reported in the financing activities sections  of your consolidated statements of
cash flows.  However, we are unclear as  to where you have reported i) the cash
inflows related to revenues generated unde r third-party charter agreements, which
are ultimately paid back out to Frontline as the deemed  dividend payments or ii)
the cash inflows from deemed equity c ontributions received, which relate to
charter revenues received from Frontline Charterers prior to their charter
agreements becoming effective for accounting purposes.  As such, please tell us where the aforementioned cash flows have been classified in your statement of cash flows and your rationale behind such classification.  Please cite any accounting literature which you believe s upports your conclusions.  Furthermore,
to the extent that neither of the aforementioned items have been classified as cash
flows from financing activit ies, please tell us why you believe financing activities
is the appropriate section of the cash flow  statement to classify deemed dividends
paid, which reflect the pa ss-through of revenues genera ted under the third-party
charter agreements.

Notes to the Consolidated Financial Statements

2. Accounting Policies

Leases
8. We note that you classify vessel leases for which you are the lessor as either
finance leases or operating leases base d on an assessment of the terms of each
lease.  We also note from Footnote 11 to  your financial statem ents that 48 of your
company’s vessel charters were accounted fo r as sales type leases as of December
31, 2006.  As your leases to Frontline Charte rers range in length from six to 20
years, please describe in detail how you determined the appropriate accounting treatment for your shorter leases to Frontline  Charterers.  We note that the criteria
outlined in paragraphs 7(c) and 7(d) of SFAS No. 13 should not be used to

Ship Finance International Limited
August 24, 2007
Page 5

determine the appropriate lease classificat ion if the beginning of the lease term
falls within the last 25 percent of the total estimate life of the leased property,
including earlier years of use.
9. We note that the majority of your vessels  have been acquired from Frontline Ltd.
and chartered back to subsidiaries of Frontline Ltd. (the “Frontline Charterers”) under charter arrangements that became economically effective January 1, 2004
(the approximate timing of acquisition).  In this regard, tell us whether you
believe that the vessels acquired from Frontline Ltd., and subsequently chartered
back to Frontline Charterers, qualify for sale-leaseback accounting treatment.  Please cite any accounting literature wh ich you have relied upon to reach your
conclusion.  To the extent that you belie ve the acquisitions of vessels from
Frontline Ltd. and subsequent charters of the same vessels back to Frontline Charterers qualify as sale-leaseback transactions, please tell us why the
subsequent charters have been classified as sales-type leases, as opposed to, direct
financing leases.  Please refer to pa ragraph 34 of SFAS No. 13 for further
guidance.
10. Assuming sufficient response to the comme nts above regarding your treatment of
your leases to the Frontline Charterers as  sales-type leases, please tell us how your
policies regarding revenue and expense r ecognition comply with paragraph 17(c)
of SFAS No. 13.  In this regard, please te ll us i) how you have determined the
sales prices and costs of your vessels which have b een leased to Frontline
Charterers and ii) where th e sales prices and costs of your vessels have been
reflected in your financial statements.

11. Investments in Finance Leases
11. Please disclose the minimum lease payments  to be received from your sales-type
leases for each of the five succeeding fis cal years as of the date of your latest
balance sheet that has been presented.  Refer to the requirements of paragraph
23(a)(ii) of SFAS No. 13.

20. Subsequent Events
12. We note that certain of your vessels that  are being acquired and chartered back on
a bareboat charter basis include fixed pr ice purchase options throughout the term
of the charter agreement.  Please tell us how the purchas e options contained in the
charter agreements are expected to impact the carrying value of the related assets
(i.e. investment in finance leases ba lance or plant, pr operty, and equipment
balance, depending upon the type of lease) .  In this regard, please tell us i)
whether the fixed purchase prices of the vessels are expected to be exceed, be
equal to, or be below the carrying valu e of the respective vessels when the
purchase options become exercisable and ii) your intended accounting treatment,

Ship Finance International Limited
August 24, 2007
Page 6

to the extent that the carrying value of  the respective assets will exceed the
respective vessels’ purchase prices, when the purchase options become
exercisable.

********

  We urge all persons who are responsi ble for the accuracy an d adequacy of the
disclosure in your filings to be certain that  the filings include all information required
under the Securities Exchange Act of 1934 and that they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

‚ the company is responsible for the adequacy  and accuracy of the disclosure in its
filings;

‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

 You may contact Jeffrey Sears at 202-551-3302 or Lyn Shenk at 202-551-3380
with any questions.  You may also contact me at 202-551-3812.

Sincerely,

Michael Fay
Branch Chief