The most common and most likely answer to this crossword clue is the 10 plus 3 letter word PORTUGUESE MAN
I've seen this crossword clue in The Times
P
O
R
T
U
G
U
E
S
E
M
A
N
Buddy explains!
The straight part
We know that "Swimmers should avoid this/Iberian armed ship" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case swimmers should avoid this/iberian armed ship = portuguese man.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.