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.
|
|
Tuesday, 23 May 23
INDIA: COAL OUTPUT UP 8.9%, SUPPLY RISES 11.7% IN APRIL - FINANCIAL EXPRESS
India’s coal production jumped 8.85% to 73.14 million tonne (MT) in April 2023 and the total coal despatch during the month went up 11.66% to ...
Tuesday, 23 May 23
CHINA COAL OUTPUT UP 4.5 PCT IN APRIL - XINHUA
China’s raw coal output posted stable expansion in April, official data showed.
The country produced 380 million tonnes of raw ...
Saturday, 20 May 23
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
In 2022, non-OPEC supply is estimated to have increased by 1.9 mb/d y-o-y. Out of this, US liquids production increased by 1.2 mb/d, mainly on the ...
Saturday, 20 May 23
GLOBAL COAL TRADE HAS REALLY PICKED UP PACE IN RECENT MONTHS, NOW FULLY BACK TO PRE-COVID LEVELS - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels. In Jan-Apr 2023, total global seaborne coa ...
Saturday, 20 May 23
MARKET INSIGHT - INTERMODAL
India is one of the world's largest coal producers and one of the world's largest importers of coal. The country uses coal mainly for power ...
|
|
|
Showing 101 to 105 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Australian Coal Association
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
|
| |
| |
|
