Since 2010, considerable sanctions activity has been directed at shipping and its supporting industries, and the American Club draws operators’ attention to some of the recent deceptive practices employed by parties that breach the sanctions.
Current deceptive practices observed by the International Group (IG) and its commercial partners
While trade sanctions are applied widely by governments to promote individual foreign policy objectives, the following jurisdictions are particularly relevant in the context of controlled activities in maritime trade:
- Iran
- Syria
- Venezuela
- Democratic People’s Republic of Korea (DPRK)
- Crimea
- Cuba
- Belorussia
Some of the techniques used to break sanctions have been in use for several years, while others are newer and have become more prevalent in the last 18 months.
All aim to minimize surveillance and detection through confusion or concealment of the identities of vessels, their cargo, geographical location, and navigational activities.
These techniques include:
- Manipulating a vessel’s Automatic Identification Signal (AIS) to disguise the vessel’s location and/or to alter a vessel’s digital identity.
- Changing a vessel’s physical appearance.
- Falsifying vessel and/or cargo documentation.
- Multiple ship-to-ship cargo transfers to hide the fact that the cargo originated in a country to which a sanctions regime applies.
Consequences of sanctions breaking
According to the American Club, most sanctions legislation requires a failure to exercise due diligence on the part of a shipowner or other party before a breach occurs. However, in practice, states routinely act against shipowners found carrying a cargo that is deemed to be unlawful under its sanctions regime without necessarily considering the compliance procedures of the owner.
States may only enforce sanctions through the criminal justice system to which the sanctions breaker is subject using designation or listing where it is domiciled elsewhere. Designation can then make it unlawful for third parties such as banks, charterers, and insurers to deal with a shipowner.
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Source: American Club
