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Maritime and Trade Talk - EP3: Sanctions Advisories for the Maritime Industry

25 February 2022 20:33 Byron McKinney

Office of Foreign Assets Control’s (OFAC) advisory on ‘Guidance to Address Illicit Shipping and Sanctions Evasion Practices’ of 2020 outlined a number of recommendations for financial institutions to manage shipping risk . The guidance relating to ‘dark’ activity and ship-to-ship transfers have been challenging to implement within existing trade finance compliance screening programmes.

ACSS, IIBLP and IHS Markit interviewed a number of banks and others to look at the actions taken by financial institutions in response to the OFAC advisory notice and offer a series of practical recommendations to best manage the new world of shipping risk.

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This paper will offer an overview of the shipping industry and how it relates directly to financial institutions in light of the Office of Foreign Assets Control (OFAC) and Office of Financial Sanctions Implementation (OFSI) advisories. We will cover the key aspects of Automatic Identification System (AIS) and discuss the main elements and steps in a typical ship-to-ship (STS) operation.

A Working Group has been convened of trade finance experts in the banking, shipping and regulatory industries in order to answer and clarify the following points for compliance officers in financial institutions:

  1. An understanding of AIS
  2. How can data transmitted by AIS be manipulated
  3. What are the items of information broadcast

This paper recommends the following as major factors for discussion and consideration:

  • AIS outages and STS operations should be examined in closer detail if they occur for lengthy time periods of 10 hours or more. This would be a calculated average time taken to potentially conduct a port call or an at-sea cargo transfer. AIS outages below the 10-hour cut-off would potentially be insignificant from a risk and compliance perspective with the caveat that some DPRK ship-to-ship operations for petroleum products have been conducted in slightly less time
  • AIS outages are only important if the vessel could engage with another vessel of the same type or perform a port call in the time it was ‘dark’. If this is not possible then a potential red flag becomes downgraded


Saskia Rietbroek - CSS, Executive Director at Association of Certified Sanctions Specialists (ACSS)
Michael Byrne - CEO at International Institute of Banking Law & Practice (IIBLP)
Byron McKinney - Director, Product Management at IHS Markit

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Speaker: Byron McKinney, Product Management Director, Maritime, Trade & Supply Chain, S&P Global Market Intelligence

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