Release of U.S. and International Maritime Industry Sanctions Compliance Guidelines and Scenarios

Key Chapter Title List

1. Core Background of Sanctions Compliance in the Shipping Industry
2. Fraudulent Shipping Practices Concealing Sanctions Affiliation
3. Identification of Specially Designated Nationals (SDNs) in Trade Documents
4. Policies and Registration Renewal for Vessels with Opaque or Complex Ownership Structures
5. Notification of Sanctions Risks During Voyage
6. Opaque Ownership Information of Potential Tanker Buyers
7. Core Insights for Stakeholders
8. Risk Prevention for Voyage Documents and Data Manipulation
9. Warning Signs of Concealed Involvement by Sanctioned Persons
10. Application Recommendations for Sanctions-Specific Clauses
11. Public Reporting Requirements for Sanctions Violations
12. Risk Alert for Vessel Opaque Ownership
13. Conclusion and Industry Compliance Action Initiative

Document Introduction

On October 31, 2024, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued a scenario-based special sanctions compliance guide for the shipping industry. This guide represents another crucial industry compliance directive following the collaborative release of relevant documents by multiple U.S. departments including the Department of Commerce, Treasury, Justice, State, and Homeland Security in January 2024. It aims to address the severe legal risks of sanctions violations faced by the shipping industry.

The U.S. and international shipping industries face serious legal consequences for violating OFAC sanctions regulations. According to relevant OFAC regulations, all U.S. persons have compliance obligations. Foreign entities subject to U.S. jurisdiction, conducting business within the United States, cooperating with U.S. persons, or using U.S.-origin goods and services may be subject to OFAC enforcement actions or secondary sanctions if they violate sanctions programs, including causing a U.S. person to violate, evading, or conspiring to violate U.S. sanctions.

Through five fictional scenarios, the guide concretely illustrates common sanctions evasion methods and associated risk consequences in the shipping industry. These include fraudulent shipping practices concealing the origin of Iranian crude oil, discovering Specially Designated National (SDN) affiliations in trade documents, insurance compliance issues for vessels with complex ownership structures, sanctions risks exposed during voyages, and opaque ownership risks of potential tanker buyers. Each scenario reveals the lack of contractual remedies, financial losses, and legal liabilities stakeholders face due to failure to timely identify sanctions risks.

Based on the above scenario analysis, OFAC has distilled core compliance insights for shipping industry stakeholders. These cover key dimensions such as risk identification for voyage documents and data manipulation, recognition of warning signs for concealed involvement by sanctioned persons, contractual embedding of sanctions-specific clauses, public reporting mechanisms for sanctions violations, and risk prevention for vessel opaque ownership.

The guide emphasizes that shipping industry stakeholders (including freight forwarders, common carriers, commodity brokers, insurance companies, ship management service providers, ship brokerage firms, and port authorities) and related financial institutions should establish and improve internal sanctions compliance control systems to ensure they and related parties do not violate OFAC sanctions regulations.

This guide provides the shipping industry with a practical and targeted compliance framework, offering authoritative guidance for the industry to address sanctions risks and avoid legal and financial losses. It serves as an important reference document for compliance management in the international shipping industry.