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US Shipping Advisory: Guidance for Flag Registry Managers

Guidance for Flag Registry Managers
A flag registry manager may wish to consider implementing the following diligence practices to the extent it deems such practices appropriate and helpful in assessing and mitigating sanctions risks.

Verifying the IMO number of each vessel when receiving an application for registration through the IMO’s Global Integrated Shipping Information System (GISIS) Ship and Company Particulars module. If the IMO and ship name do not clearly match, additional investigation could be conducted prior to the registration of the vessel, and the manager should contact the previous Flag State to confirm the application and its intended release from the previous registry.
Transmitting to the receiving Flag Sate administration a copy of the Continuous Synopsis Record, consistent with SOLAS regulation X1-1/5, covering the period during which the ship was under their jurisdiction, together with any Continuous Synopsis Records previously issued to the ship by other states.
Reviewing and confirming the Continuous Synopsis Record with the current Flag State before completing registration.
Conducting research on the AIS history of vessels that transport oil, refined petroleum, petrochemicals, steel, aluminum, copper, other metals, sand, and coal to determine if such vessels have a pattern of AIS disablement or manipulation inconsistent with SOLAS, which could indicate involvement in illicit activities. Any signs of AIS transponder disablement or manipulation inconsistent with SOLAS should be considered a red flag and investigated fully prior to engaging in other activities with such vessels.
Sharing with other flag registries, commercial databases, and the IMO the names and IMO numbers of vessels that have been denied registration, or deregistered related to involvement in sanctionable or illicit shipping activities, so that other flag registries can be made aware and act in a manner consistent with relevant U.S. and UN sanctions. Inform the UN DPRK Panel of Experts in the event of registration denial or deregistration for North Korea-related reasons.
Noting the reason for a vessel’s deregistration on the certificate of deletion, particularly in cases of UN-prohibited activity.
Acquiring, as appropriate, the capability to monitor AIS transmissions continuously for signs of AIS disablement or manipulation and supplement AIS tracking by using Long Range Identification and Tracking (LRIT).
Communicating to all ships and related clients that suspicious AIS disablement and manipulation inconsistent with SOLAS may be investigated and qualify them for possible deregistration.
Assessing AIS history of vessels on the registry in order to identify a pattern of AIS disablement or manipulation inconsistent with SOLAS and then cease or deny flag-registry services to those vessels.

 Requesting to join the Registry Information Sharing Compact (currently led by Liberia, Panama, and the Marshall Islands) via a memorandum of understanding.
 Organizing trainings and seminars on UN and U.S. sanctions implications for the owners and managers of vessels they have flagged that could potentially be facilitating sanctionable or illicit activities.
 Considering the adoption of a system of QR codes or barcoding of documents in order to easily check for authenticity, validity, or cancellation of registry documents using a mobile phone app or by accessing the website of the former Flag State.
 Conducting cyclical checks on vessel companies to determine if the companies are still registered. This would ensure that the companies are not dissolved.
 Cooperating with classification societies to provide a soft lock on AIS equipment that does not interfere with SOLAS requirements’ allowance for disablement in emergency situations, to ensure the integrity of vessel identification and positional data. A soft lock would not allow manual changes during voyages but would allow disablement when necessary for safety or in the event of emergency, while permitting classification societies to check the change log and report any manipulation of this data during the mandated annual equipment checks.
 Utilizing relevant bodies to report possible illicit activity to the Flag State to help mitigate risk.
 Suggesting owners train all vessel masters that may engage in ship-to-ship transfers on maritime
implications of relevant sanctions programs prior to their first voyage.
 Requiring notification within 24 hours of the LRIT being switched off or otherwise disabled and require an investigation of such incidents.
 Informing registrants and owners of vessels that sanctionable or illicit conduct would be cause for immediate removal of flags and that the underlying due diligence and registration documents revealing ownership information may be sent to the United States and relevant UN body at the discretion of the registry and consistent with applicable laws and regulations.
 Ensuring employees who reveal illegal or sanctionable behavior are protected from retaliation, and ensuring there is a confidential mechanism to report suspected or actual violations of law or sanctionable conduct.
 Incorporating data such as historical ship location, ship registry information, and ship flagging information, along with available information from the U.S. Department of the Treasury, the UN, and the U.S. Coast Guard, into due diligence practices.
 Providing that AIS disablement and manipulation inconsistent with SOLAS and illegal conduct as of the registration date are grounds for deregistration and/or denial of services, including the ability to dock at ports of the flag state. Additionally, other grounds for deregistration could include transfers of cargo to clients that are not broadcasting AIS consistent with SOLAS or have an AIS history that indicates manipulation and disablement inconsistent with SOLAS.

Categories: Advisories OFAC Updates


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