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.
|
|
Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
|
|
|
Showing 21 to 25 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
|
| |
| |
|
