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, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
Monday, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
Monday, 08 January 24
SEABORNE TRADE REACHES 12.4BN TONNES - CLARKSONS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Monday, 08 January 24
CAPESIZES START THE NEW YEAR ON POSITIVE NOTE - BALTIC EXCHANGE
Capesize
This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and N ...
Friday, 05 January 24
MORGAN STANLEY SEES LOWER OIL PRICES IN 2024 ON OVERSUPPLY CONCERNS - REUTERS
Morgan Stanley sees Brent crude prices anchored near $80 per barrel in the first half in 2024 before declining towards the end of the year as it ex ...
|
|
|
Showing 31 to 35 news of total 6846 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- The University of Queensland
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Economic Council, Georgia
|
| |
| |
|
