More than 500 died when torpedoes struck the two ships in October 1943.
St John Ambulance Brigade recovered the bodies of the 21 men washed up on Guernsey’s shores
The Germans gave them full military funerals and they were buried in Le Foulon Cemetery.
The first memorial service was held at the cemetery in 1947 and has taken place there every year since.
This year’s was attended by about 500 people, including veterans of the Royal Navy and Royal Marines, as well as family and friends of those lost in the war.
Captain Ian Brouard, vice-president of the Guernsey Association of Royal Navy and Royal Marines, who joined the Merchant Navy in 1964, said it was important to remember the men who lost their lives.
‘These guys sacrificed their lives for us. It’s all about remembering old friends and shipmates.
‘It is a day of reflection,’ he said.
Last year was the first year since the sinking that family and friends of the survivors could not attend, due to the pandemic.
A parade of brass band musicians and flag-bearers marched from Ladies’ College down to Le Foulon before a short period of reflection before the service began.
A reading of a naval prayer opened the service, followed by the laying of wreaths.
St John Ambulance community operations manager Phil Ozanne said: ‘St John has always had a role in today, we have always laid a wreath.
‘The people that we are here for gave their lives so that we can be here.
‘Even though it was a long time ago it shouldn’t be forgotten, it’s important to carry on the legacy.’