sanctions 21 May 2020

US guidelines for shipping industry on deceptions used to evade sanctions

The United States has issued an advisory for the maritime industry that lists deceptive shipping practices used to evade US sanctions and offers guidelines that private businesses should consider to mitigate exposure to sanctions risk.

The Sanctions Guidance for the Maritime Industry, jointly issued on 14 May by the US departments of State and Treasury and the Coast Guard, concerns US sanctions on Iran, North Korea and Syria. It is primarily meant for ship owners, managers, operators, brokers, ship chandlers, flag registries, port operators, shipping companies, freight forwarders, classification service providers, commodity traders, insurance companies and financial institutions.

The guidance encourages ‘entities and individuals involved in the supply chains of trade in the energy and metals sectors, including trade in crude oil, refined petroleum, petrochemicals, steel, iron, aluminum, copper, sand, and coal, to review this advisory and take appropriate action as deemed necessary or advisable.’

The guidelines are ‘intended to provide actors that utilize the maritime industry for trade with information on and tools to counter current and emerging trends in sanctions evasion related to shipping and associated services.’ They include a set of best practices for different sectors of the maritime and energy industries ‘to assist in their due diligence and mitigation of sanctions risk.’

The advisory warns: ‘It is critical that private sector entities appropriately assess their sanctions risk and, as necessary, implement compliance controls to address any identified gaps in their compliance programs. This is especially important when operating near or in areas they determine to be high-risk, which may include areas frequently used for potentially sanctionable transportation-related activities.’