[UKönig]

Also, the game color codes your targets. Or at least the stock version does.
Blue is the color of friendlies - friendly to the Germans that is.
Green is the color of non -hostiles (or neutral).
Red is the color of the enemy - red, like blood...
Grey is the color of an unknown. It will also show up when ships are sunk without any direct involvement from you, or if you did not actually observe the sinking.
Firing at neutrals even when sailing in convoy is frowned upon by the high command. Of course they understand that in battle, everything changes by the second, and often one of the very first casualties of any engagement is the battle plan itself!
This was one of the factors that angered the U-boat captains. The Americans took blatant advantage of their neutrality to send their own ships or destroyers with the British convoys, and there was nothing they could do about it. When Japan attacked Pearl Harbour, Germany felt then obliged to declare war against the USA, so by Dec. 11, 1941, the gloves were off and American ships were now fair game.
I've done this on occasion, that is, sail across to the eastern seaboard by December 6 .Waving the flag of neutrality, I will sail right up through the front gates of New York harbour. I will sail around, checking out the potential targets as they lie berthed at the piers. As soon as the flag drops, I will launch my attacks from inside their own refuge. True, it 'games the game' so to speak, but, these are things that I like to do...
Of course, realistically, I would be intercepted by the Navy or Coast Guard, "escorted" to the dockyards, and my captain and crew would be arrested and interned as 'enemy aliens', for the duration of the war. That's the least of what should happen.
Also, if you *do* sink a neutral, mistakenly or not, like an American, then for the next 48 hrs or so, you will be fired upon by those neutrals. At least until their hurt feelings cool off, and things go back to normal.