Today, the US Department of the Treasury's Office of Foreign Assets Control ("OFAC") issued an OFAC Compliance Communiqué: Sanctions Compliance Guidance for the Maritime Shipping Industry designed to aid maritime sector stakeholders in (1) identifying certain new or common fact patterns that may be indicative of sanctions evasion, (2) addressing common counterparty due diligence issues, and (3) implementing best practices to promote sanctions compliance.
As the maritime industry continues its upward growth trend and becomes more heavily focused on automation and emerging technologies, maritime stakeholders should be keenly aware of potential sanctions implications and consider the following, among other things, when implementing their compliance strategies:
- Conducting additional transaction due diligence to ensure shipping documentation accurately reflects the origin and destination of cargo, including monitoring AIS abnormalities, vessel or class of trade misclassifications, abnormal traffic or voyage patterns, or other forms of data manipulation.
- Adopting robust internal sanctions compliance controls including pre-transaction due diligence, ongoing screening, and internal audit and reporting mechanisms.
- Requiring contractual terms with sufficient sanctions exclusion clauses to exit or terminate agreements that would otherwise be prohibited by US sanctions regulations.
- Requiring counterparty compliance with US sanctions regulations through contractual terms.
- Reviewing insurance policies to confirm that internal sanctions compliance mechanisms are sufficient to ensure no sanctions violations that would preclude coverage on future claims.
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