On May 14, 2020, the U.S. Departments of State and Treasury and the U.S. Coast Guard issued a global advisory to alert the maritime industry and those active in the energy and metals sectors to deceptive shipping practices used to evade U.S. economic sanctions. It is intended to provide exporters, shippers and others utilizing the maritime industry for trade with information and tools “to counter current and emerging trends in sanctions evasion related to shipping and associated services.” The advisory includes “best practices” to assist in mitigating any exposure to sanctions risks and highlights common deceptive shipping practices used with countries like Iran, North Korea and Syria.
According to the advisory, 90 percent of global trade involves maritime transportation and “malign actors” are always seeking illicit ways to exploit this global supply chain. The advisory is intended primarily to provide guidance to 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 advisory is also recommended for entities and persons 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 ensure that necessary appropriate actions can be taken.
The advisory provides brief descriptions of common deceptive shipping practices, including but not limited to physically altering vessel identification, falsifying cargo and vessel documents, false flags, and establishing complex ownership or management structures. General practices for identifying efforts at sanctions evasion are also discussed, including the implementation of an effective corporate sanctions compliance program. The advisory also provides detailed annexes offering guidance to the various sectors involved in the maritime trade cargo supply chain.