Uhh, I was playing Op Monsun the other day and sunk a neutral ship in 1941 in the Western Approaches to England, it was actually the 5th ship I made go keel up in a convoy I was attacking.
Sadly, when I got back to port the text stuff said I had horribly embarassed Germany and the Kriegsmarine, that I'd also been stripped of my command, and that the secret police took me away in the night never to be heard from again.
That was my experience, but the boat was a tanker @ over 10k tons, so that might of had something to do with it.
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