Following over a year of consultations with a broad swathe of the maritime industry, the U.S. Department of State, U.S. Department of Treasury, and the U.S. Coast Guard have issued the long-awaited sanctions advisory for the maritime industry. The advisory reflects the U.S. government’s commitment to work with the private sector to prevent illicit shipping and sanctions evasion.
This new guidance comprehensively expands the regulatory focus, placing firmly in the sights of the U.S. and international regulators, all maritime industry stakeholders including; ship owners, operators, managers, charterers, brokers, flags, ports, shippers, freight forwarders, commodity traders, insurers, and financial institutions. Whilst the advisory guidance is non-binding, the message is very clear that all entities across the maritime sector and related supply chains must significantly improve their compliance programmes to avoid breaching U.S. sanctions.
As an industry leader in the provision of maritime KYC and sanctions compliance, Pole Star was an active participant in these consultations and have ensured that our PurpleTRAC and MDA solutions help enable clients to quickly and efficiently comply with the issued guidance. Our experts have reviewed the advisory, with the key points summarised below. Over the coming days, we will be providing further analysis on sector-specific guidance within the maritime industry. In the meantime, if you wish to discuss how we can help you ensure that you have the appropriate systems in place to ensure compliance, contact us at sales@polestarglobal.com.
Who is the advisory aimed at?
Earlier this year, David Peyman, Deputy Assistant Secretary of State for Counter Threat Finance and Sanctions, stated that “the maritime industry is the key artery for sanctions evasion globally”.
The advisory aims to provide all those involved in the maritime industry with the necessary tools to counter current sanctions threats and alert the industry to common deceptive shipping practices, used in relation to countries such as Syria, North Korea, and Iran.
It includes best practice advice for different sectors within the maritime and energy industries, providing extensive guidance specifically for:
Deceptive Shipping Practices
The advisory begins by emphasising the key deceptive shipping practices used to facilitate sanctionable and illicit maritime trade linked to Iran, North Korea, and Syria:
Going forwards, the above practices, save for physically altering vessel information, constitute the essential focal points that need to underpin the due diligence processes undertaken by ship owners, maritime insurance companies, and all those now under the regulatory microscope.
There has never been a greater emphasis on monitoring both historic and current AIS transmissions. As such, it should now be basic due diligence to ensure the continuous transmission of AIS, alongside the monitoring of potential manipulation and route deviations. Moreover, the importance of focussing on IMO numbers, as the sole unique identifier of vessels, over vessel names is finally being reinforced. Prior to engaging in STS transfers, which are also now under scrutiny due to their repeated use by sanctioned countries, AIS transmissions, vessel names, and IMO numbers are key elements that should be thoroughly and repeatedly reviewed and inspected.
In conjunction, the paper-based nature of the maritime industry has long been a weak point - opening the industry up to a heightened risk of fraud. Consequently, OFAC is now calling for the stringent review and investigation of all relevant documentation, particularly for those involved in transshipments.
General Practices for Effective Identification of Sanctions Evasion
OFAC stresses the importance of having appropriate due diligence and compliance programs that are continuously adapting to the current sanctions landscape. The advisory highlights general practices for the effective identification of potential sanctions evasion.
What can you be doing right now?
This advisory is one of the most holistic regulatory documents to come out regarding the maritime industry. It has raised well known weaknesses that have long been used by those seeking to flout sanctions programs. Here at Pole Star, we have a suite of solutions to assist you in ensuring full sanctions compliance across all aspects of the maritime supply chain.
PurpleTRAC is our award-winning revolutionary regulatory technology system for institutions with sanctions and risk management exposures in maritime trade, enabling users to screen and track vessels and their associated ownership and management in seconds, by entering only the vessels name or IMO number. Within 30 seconds, PurpleTRAC screens for the following:
Further in line with this advisory, PurpleTRAC now has a new extension: Bill of Lading Verification (BLV), which will allow customers to significantly extend their sanctions risk and compliance investigations by verifying bills of lading in real time.
PurpleTRAC is also used by flags, and can be operated alongside our Maritime Domain Awareness solution for full visibility of your maritime domain.
Get in touch with us now at sales@polestarglobal.com to learn more about how we can assist you in staying on the right side of regulators in light of this new advisory.