What is sanctions screening?
Sanctions screening in the maritime world is essentially the process of ensuring that the goods and parties involved in a trade transaction are checked against regulations, sanctions, enforcement actions, and other official watchlists. Verifying a transaction as compliant requires complete supply chain transparency to comprehensively screen a ship’s movement history, registered flag administration, ownership, and management.
Sanctions screening should be part of the due diligence carried out by every player within the maritime trade supply chain to prevent the criminal, reputational, and commercial damage caused by noncompliance and the association with illicit trade activities, money laundering, terrorist financing etc.
The importance of sanctions screening
While financial institutions such as banks, traders, and insurance companies have always had to adhere to sanctions, other members of the maritime industry may find the subject of sanctions more difficult. Financial institutions have long-standing compliance programmes, but now the focus has shifted to include others in the global trade ecosystem.
The 2019 OFAC advisory also included guidance for secondary parties i.e. ship owners, operators, managers, charterers, brokers, flags, ports, shippers, and freight forwarders, as well as commodity traders, insurers, and financial institutions, instructing them to adapt and improve their compliance programmes to avoid breaching US sanctions.
Violations & Noncompliance
OFAC, UN, UK (OFSI), EU and Australia are a few of the many international bodies which issue sanctions. The regulatory landscape has never been more complex and is evolving rapidly in conjunction with the state of global affairs. As a result, it is not only those that are engaging in illicit activity that are affected, any member of the supply chain that is associated with that player, from the financing bank to the vessel operator, can be hit with significant fines for violating and being noncompliant with sanctions. Furthermore, flags are now also deregistering ships when high-risk or noncompliant activity is identified, often as a result of neglecting due diligence.
How can you protect your business?
Pole Star’s sanctions screening and compliance solution, PurpleTRAC, enables the automation, streamlining, and recording of your regulatory processes, mitigating the risk of the criminal, reputational, and commercial damage that would occur as a result of non-compliance.
Within the easy-to-use, single-point solution, you can:
Get in touch with us now at firstname.lastname@example.org for a free Demo.