Over the past couple of years, it has become increasingly clear that those involved in maritime trade must aim for greater transparency when identifying who and what they are working with. The vulnerabilities within global supply chains have become ever more apparent, with regulators specifically targeting the wider maritime industry to reduce illicit shipping practices and sanctions evasion techniques. These issues no longer concern only banks and financial institutions, they affect ship owners, operators, managers, charterers, brokers, flags, ports, shippers, freight forwarders, commodity traders, insurers, and every other player within the supply chain too.
Pole Star’s regulatory technology, PurpleTRAC, was designed with and for those with exposure to maritime trade and, as that group and the regulatory focus on it has grown significantly, so have the functions of the platform.
When it comes to performing thorough due diligence, global regulators such as OFAC have provided comprehensive guidance on how to mitigate the risk of breaching sanctions or facilitating criminal or terrorist activity. For those operating within the maritime industry, screening your supply chain is key.
PurpleTRAC incorporates best-in-class data to enable the in-depth screening of those whose services are being utilised, in order to streamline compliance processes. Within the system users can configure their own unique risk parameters based on internal compliance requirements, as well as global regulations.
The solution enables a vessel, and its associated ownership and management, to be screened against more than 1,600 country and sanctions lists using data from our alliance partners, Dow Jones Risk & Compliance. This includes detailing the vessel’s registered owner, operator, group beneficial owner, and ship manager, and screening them against lists of global sanctions, denied parties, and enforcement action lists, alongside sanctioned or high-risk flags, countries, and ports.
Additional Entity Screening
The Company Global Sanction List check performed during vessel screening can also be extended to specific entities linked to the transaction that have not already been listed as owners, managers, or operators of the vessel. The severity indicator of any sanctioned entities is then available next to each sanction list type, which are combined to provide the overall risk status of the transaction, rated from CRITICAL, to WARNING, to OK.
Bill of Lading Verification (BLV)
The need to tackle trade-based money laundering (TBML) and documentary fraud has also compounded in recent years. Due to the outdated and paper-based processes of the maritime industry, false documentation is relatively easy to produce, costing financial institutions millions of dollars of lost revenue due to documentary fraud. Now, with the digitisation of Bills of Lading (BLs), PurpleTRAC users can extend their compliance investigations to cover the delivery of a specific BL.
Simply by entering the BL number, the system will confirm whether it is a recognised asset within the carrier line and produce a list of all vessels involved in the delivery of the BL, all ports visited, and all carriers involved in the transaction.
The global commodities sector contributes 50% of global greenhouse gas emissions and 70% of commodity traders’ carbon emissions relate to shipping. As such, it is now recognised that companies must incorporate their GHG emissions measurements into financial reporting and sustainable trade finance programs. To address this, CarbonChain’s best-in-class emissions calculation tool has been incorporated into PurpleTRAC, allowing users to screen vessels to ensure they meet their carbon footprint targets.
By incorporating CarbonChain’s emissions calculations on over 76,000 vessels into the solution, companies can now calculate their environmental impact and that of the vessels in their supply chain too, making compliance with environmental regulations and driving down emissions much simpler. To do this, enter the vessel IMO number or name to screen it against the CarbonChain database, then generate a compliance and emissions report containing the vessel’s overall carbon score.
When it comes to remaining compliant, screening alone is not sufficient. A full investigation of a vessel requires continuous tracking, as well as regular screening to comprehensively monitor its journey and be notified of any suspicious vessel activity on route.
At Pole Star, our patented persistent tracking technology is incorporated into our systems, allowing users of PurpleTRAC to monitor a vessel seamlessly in real-time. The hybrid track combines a vessel’s satellite and terrestrial AIS, with Inmarsat positional data, providing accurate ship location data to be determined even when its AIS is unavailable. The solution therefore provides tracking redundancy and allows for the elimination of what can be a significant level of dark ship false-positives if AIS is used alone.
Ship Movement History
In addition to this, a ship’s historical movements are also critical to determining its level of risk. To identify the likelihood of a vessel engaging in illicit activity, one of the simplest things to look at is whether it has a pattern of suspicious behaviour. For instance, if a vessel has completed an illegal transshipment before, it’s highly likely to occur again, but this time it could affect your supply chain and therefore your business. Within PurpleTRAC’s tracking tab, every port of call will appear alongside a risk indicator, with activities that could be cause for alarm, such as ‘sanction zone entry’ or entering a high-risk port, receiving an amber or red alert.
Periods of Non-Reporting
Easy access to clear, detailed vessel information has never been more important and now, with a direct link from PurpleTRAC to our Maritime Domain Awareness (MDA) solution, performing further analysis on dark ships has never been easier.
The reality of AIS is that equipment can fail, be switched off from onboard a ship, and be deliberately spoofed and falsified from onboard or ashore. As a result, when a ship does go dark, two points must be examined: where the vessel was when it last transmitted its position, and how long it has been dark for. If a vessel is not transmitting in or around a known high-risk zone and if it has been dark for a substantial amount of time, this will indicate a higher risk potential and should be avoided or managed according to internal risk management processes.
In PurpleTRAC, dark periods are clearly detailed with the date and time that the AIS stopped and then resumed reporting, alongside the full duration and specific location.
For each period of non-reporting, a red or amber warning symbol will be shown, to indicate a medium to high-risk for that gap. For an overall indication of risk, based on all the dark activity listed for the vessel, the Gap Severity will be listed as CRITICAL, WARNING, or OK in the ‘Periods of Non-Reporting’ window.
In conjunction with periods of non-reporting, users are now also informed of changes in draught between when the vessel stopped and resumed reporting. Draught refers to the vertical distance between the surface of the water and the lowest point of a vessel, which when altered, may suggest that cargo may have been loaded onto or offloaded from the vessel.
The PurpleTRAC platform shows draught details for all periods of non-reporting, providing users with the tools needed to protect themselves from sanctions violations relating to the illegal import and export of goods.
Dark Activity / STS Risk
To complement the Draught Change function, PurpleTRAC includes an STS risk indicator to provide users with even greater transparency regarding a vessel’s journey. Using an accumulation of a vessel’s movement history, periods of non-reporting, and draught change data, PurpleTRAC determines the level of risk of a potential transshipment. The Dark Activity/STS Risk symbol (↔) will be displayed when such risk is identified.
STS Pairings ~ coming soon!
Ensuring that a ship is where it’s supposed to be and only engaging with actors that it is legally allowed to, is essential to any sanctions compliance programme. As such, to extend the STS investigations possible using PurpleTRAC, users will soon be able to examine the risk of STS transfer activity for specified vessels.
This feature allows users to look for any historic STS pairings. PurpleTRAC will display the estimated start and end time of any pairings, as well as the plotted movements of the vessels during that time.
Global regulatory bodies, including OFAC, have made it clear that feigning ignorance is no longer an excuse. However, by demonstrating that you have a sanctions compliance programme in place using an audit trail of your best efforts, you will be favourably considered should you find yourself up against regulators. As such, PurpleTRAC allows users to generate incorruptible automated reports for audit and verification of their compliance process.
After screening a vessel against PurpleTRAC’s sanctions watchlists and its movement history, users can download a PDF screening report. The document includes all the vessel details, from its IMO number, to its physical details, registered flag, ownership, and management, as well as the results of its movement history check and the overall risk status, as determined by the system.
Similarly, the BL verification report shows evidence that a BL check was carried out and what the results were. The details include the BL number, the date it was screened, its overall risk status, as well as the risk status for each individual entity, vessel, port, and carrier involved in the delivery of that BL.
Positive results from first movers on the combined CarbonChain and PurpleTRAC solution have highlighted that a green price premium does exist, when companies can confirm that their goods are actually delivered through a green supply chain. Consequently, the need for ESG-based evidence exists too, which is met by PurpleTRAC with the ability to download a PDF greenhouse gas emissions report. The report provides the total carbon score and breaks it down, detailing the intensity, the cost to offset, and the vessel’s environmental performance in relation to others in its group type.
Contact firstname.lastname@example.org to learn more about PurpleTRAC or request a demo.