We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
 Key Points
-
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the maritime industry regarding common deceptive shipping practices used to subvert U.S. and United Nations sanctions programs targeting Iran, North Korea and Syria.
-
The guidance highlights certain deceptive practices employed in maritime activity that could signal sanctions evasion.
-
The guidance also contains specific measures that the maritime industry and energy and metals sectors can take to tailor their sanctions compliance programs to avoid sanctions violations or otherwise supporting illicit shipping activities.
-
This Guidance is part of a sustained focus on the international shipping industry, including the U.S. Government’s latest enforcement actions in the shipping sector on June 2, 2020.
The Guidance
On May 14, 2020, the Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Department of State and the U.S. Coast Guard jointly released guidance (the “Guidance”) regarding common deceptive shipping practices in order to aid persons involved in the maritime industry, and energy and metals sectors, in tailoring their due diligence and sanctions compliance policies and procedures. The Guidance is particularly targeted towards 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 shipping industry continues to present particularly challenging issues associated with U.S. sanctions compliance, including the involvement of numerous parties in particular voyages all with different, yet overlapping risks.
The Guidance continues a further and concerted effort by OFAC to focus in particular on the shipping industry and builds on prior advisories that it has issued directed at the shipping industry, including one issued on September 4, 2019, entitled “Sanctions Risks Related to Shipping Petroleum and Petroleum Products from Iran” that also identified specific deceptive shipping practices and risk mitigation measures for the industry. As the U.S. Government’s latest enforcement actions on June 2, 2020 demonstrate, OFAC sanctions enforcement attention is squarely focused on the international shipping industry.
The Guidance also provides important insights for companies operating in the maritime sector regarding the criteria that OFAC applies when evaluating an effective sanctions compliance program for such companies.
Below we summarize key points from the Guidance that are relevant for the shipping sector, including a summary of deceptive practices highlighted in the Guidance, a summary of general practices for effective identification of potential sanctions evasion and summaries of guidance for certain actors in the maritime industry and country-specific guidance.
Deceptive Shipping Practices
The Guidance provides a summary of common tactics utilized to facilitate sanctionable or illicit maritime trade linked to Iran, North Korea and Syria, including:
-
Disabling or manipulating the Automatic Identification System (AIS) on vessels to conceal a vessel’s port of call or other information regarding its voyage.
-
Physically altering vessel identification to obscure the identities of sanctioned vessels or vessels engaging in sanctionable activities.
-
Falsifying cargo and vessel documents, particularly with respect to shipments involving petrochemicals, petroleum, petroleum products, metals (steel, iron) or sand to disguise their origin.
-
Ship-to-Ship (STS) Transfers used to conceal origin/destination of products.
-
Voyage irregularities to disguise the ultimate destination or origin of cargo, including indirect routing, unscheduled detours or transit or transshipment of cargo through third countries.
-
False flags and flag hopping (i.e., repeatedly registering vessels with new flag states).
-
Use of complex ownership or management to disguise the ultimate beneficial owner of cargo or commodities in order to avoid sanctions or other enforcement actions.
General Practices for Effective Identification of Sanctions Evasion
The Guidance also highlights, and provides details regarding, the following practices for effective identification of potential sanctions evasion:
-
Institutionalizing a sanctions compliance program, including through the implementation of written standardized operational compliance policies, procedures, standards of conduct and safeguards.
-
Establishing AIS best practices and contractual requirements that make disabling/manipulating AIS for illegitimate reasons grounds for termination of contracts or investigations.
-
Monitoring ships throughout the entire transaction lifecycle, including through supplementing AIS with Long Range Identification and Tracking (LRIT) and receiving periodic LRIT signals on a frequency informed by the entity’s risk assessment.
-
Conducting “Know Your Customer” due diligence on customers and counterparties, which could include “maintaining the names, passport ID numbers, address(es), phone number(s), email address(es), and copies of photo identification of each customer’s beneficial owner(s).”
-
Exercising supply chain due diligence, including, as appropriate, conducting due diligence to ensure that recipients and counterparties to a transaction are not sending or receiving commodities that may trigger sanctions, such as Iranian petroleum or North Korea-origin coal, and implementing controls that allow for verification-of-origin and recipient checks for ships that conduct STS transfers.
-
Incorporating the above “best practices” into contracts.
-
Sharing information about sanctions evasion techniques and threats amongst industry groups.
Annex A: Actor-specific Guidance
In Annex A, the Guidance provides bulleted lists of guidance and information for particular actors within the maritime industry, including: maritime insurance companies, flag registry managers, port state control authorities, shipping industry associations, regional and global commodity trading, supplier, and brokering companies, financial institutions, ship owners, operators, and charterers, classification societies, vessel captains and crewing companies.
Below we summarize the guidance with respect to ship owners, operators and charterers, vessel captains and crewing companies.
Ship Owners, Operators, and Charterers:
-
Identify vessels that, in the past two years, have a pattern of AIS manipulation not consistent with the International Convention for the Safety of Life at Sea and terminating business relationships with clients that continue to use those vessels.
-
Keep and analyze records, including, where possible, photographs, of delivery and recipient vessels and/or recipients located at ports when possible, to enhance end-use verification.
-
Protect employees who reveal illegal or sanctionable behavior from retaliation.
-
Incorporate data into due diligence practices from organizations that provide commercial shipping data.
-
Communicate to counterparts as necessary and appropriate (e.g., ship owners, managers, charterers, operators) an expectation that they have adequate and appropriate compliance policies.
Vessel Captains:
-
Ensure deck officers are aware of the International Maritime Organization’s (IMO) AIS regulations, including the requirement to consistently broadcast AIS transmissions.
-
Communicate to ship owners and charterers that vessels are monitored for AIS disablement and that any occurrences of AIS disablement will be investigated.
-
Understand vessels’ AIS history to determine whether they may have been involved in illicit activities.
-
Before engaging in ship-to-ship transfers, verify the other vessel’s name, IMO number and flag, and ensure there is a legitimate business purpose for the transfer.
Crewing Companies:
-
Ensure crewmembers are aware of IMO guidance in relation to illicit shipping and the reasons why certain practices are unsafe.
-
Communicate to clients that crews are monitored for AIS disablement and that any occurrences of AIS disablement will be investigated.
-
Understand vessels’ AIS history to determine whether it may have been involved in illicit activities.
-
Ensure that crewmembers who reveal illegal or sanctionable activity are protected from retaliation and providing a confidential mechanism for reporting sanctionable conduct.
Annex B: Country Guidance
In Annex B, the Guidance summarizes relevant provisions of U.S. and U.N. sanctions programs concerning North Korea, Iran and Syria and actions prohibited under said programs relevant to the maritime industry. It also highlights a few points with respect to recent deceptive practices to facilitate illicit shipping to North Korea, Syria, and Iran which are summarized below.
North Korea:
North Korea reportedly exported 3.7 million metric tons of coal between January and August 2019, in violation of U.N. sanctions. Further, while under United Nations Security Council Resolution 2397, North Korea is limited to importing a maximum of 500,000 barrels of petroleum per year, from January to October 2019. North Korea ports received 221 tanker deliveries, which, if fully laden, would result in approximately 3.89 million barrels of imports. According to the Guidance, these illicit exports and imports are primarily effectuated via ship-to-ship transfers in Chinese territorial seas. Image 1 below depicts the most common areas in which such ship-to-ship transfers take place.
|
|
Common Locations of Ship-to-Ship Transfers subverting North Korean Sanctions1 |
North Korea is also reportedly acquiring vessels destined for scrapping and non-ocean-going barges that do not transmit AIS signals to engage in illicit import/export operations.
Syria:
The Guidance notes that “the supply chain and petroleum-related shipments [to Syria] create significant sanctions risk for those in the maritime industry.” As an example, it highlights the September 2019 OFAC action against Maritime Assistance LLC for facilitating the sale and delivery of jet fuel to Russian military forces operating in Syria. It also highlights the OFAC action in the November 2018 scheme in which Iranian and Russian entities engaged in a payment offsetting arrangement in which the sale and shipment of Iranian oil to Syria provided funding to Iran and proxy groups such as Hizballah, the Islamic Resistance Movement (HAMAS) and the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF).
Iran:
The Guidance did not provide specific guidance with respect to deceptive shipping practices used to subvert Iran-related sanctions—rather, it noted that the IRGC-QF continues to try to evade U.S. sanctions “by obfuscating the origin, destination, and recipient of oil shipments,” stating that “the use of such deceptive tactics is unique neither to Iran nor to Iran’s petroleum industry.”
Companies in the shipping industry or whose businesses intersect the shipping sector should assess their sanctions risk in light of this latest U.S. government guidance and make necessary modifications or enhancements to their compliance programs to mitigate this risk.
Source: Akin Gump, Strauss Hauer & Feld LLP
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
|
|
|
Showing 1 to 5 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- PTC India Limited - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
|
| |
| |
|
1 