Most companies are already screening their clients against OFAC lists as part of their standard KYC (know your customer) programmes, but when it comes to shipping, more is needed to ensure you do not fall foul of the regulations.
1. Don't rely on the ship's name
Are you screening vessels by comparing their names against lists of designated entities in order to determine whether they are subject to sanctions? This is no longer sufficient. Because vessels involved in proliferation-related, high risk, clandestine or illegal activities frequently change name and flag State in order to evade controls.
Instead, screen ships against their International Maritime Organization (IMO) number - the only unique and permanent identifier of a ship. By doing so you can ensure that you are screening the correct ship.
2. Check who owns, controls and operates the ship
In shipping, ownership and operational relationships are often complex. Make sure you know whether ships are controlled or operated by, as well as owned by, a designated person or entity.
3. Determine which flag the ship sails under
Check whether the ship is owned in or sails under the flag of a State that has a government programme that is subject to sanctions.
4. Determine the ship's beneficial owner
Financial organisations need to delve deeper than simply looking at the registered owner of a ship. Screening a ship's registered owner should only be the beginning of your checks.
A ship may be owned by several companies which could include PEPs, SDNS or other sanctioned entities.
5. Check the ship's history
Look at the ship's history, including whether it has previously been involved in activities that could indicate non-compliance with sanctions such as port calls in comprehensively sanctioned countries or high risk areas.
6. Monitor the ship and its benefactors
Looking at the past can only tell us so much, financial institutions should demonstrate proactive efforts to remain compliant by tracking the real-time location of ships and monitoring the regulatory status of a vessel’s owners & benefactors including their Countries of Origin , domicile & control.
7. Proactively identify and respond to suspicious activity
Tracking a ship's movements is just the beginning. With new services like PurpleTRAC from Pole Star, financial organisations now have the ability to proactively monitor a ship's movements to identify suspicious activity that could indicate illicit operations by receiving real-time email alerts.
8. Keep thorough records
Last (but certainly not least) is record keeping. All of these efforts are of little value without thorough and comprehensive records that you can use to demonstrate your compliance procedures. PurpleTRAC automatically record and archive all of your screening and monitoring activities ensuring they’re available at the click of a button.
Disclaimer: This guide is intended to provide a summary of the key issues addressed in the sources to which it refers and from the perspective of the audience for which it is intended. The contents of this guide are intended to be purely educational in nature, and are not intended to be used as legal advice. None of the above should be considered a substitute for you consulting your own legal representatives on how to manage your sanctions compliance programme or policies. Pole Star Space Applications Limited has made reasonable effort to ensure the accuracy of the contents provided in this guide. However, due to the complexity of the subject matter and since it is subject to interpretation, Pole Star Space Applications Limited reserves the right to change at any time without notice, information contained in this document and makes no warranties or representations as to its accuracy.