Guidance for Ship Owners, Operators, and Charterers
Ship owners, operators, and charterers may wish to consider implementing the following due diligence practices to the extent they deem such practices appropriate and helpful in assessing and mitigating sanctions risks.
As appropriate, continuously monitoring ships, including ships leased to third parties, and ensuring that the AIS is continuously operated consistent with SOLAS and not manipulated. Parties could also consider using LRIT in addition to AIS and receiving LRIT signals every 3 hours.
Monitoring AIS transmissions of vessels, especially in the case of vessels capable of transporting cargoes and that are susceptible to ship-to-ship transfers that are known to be used in the evasion of sanctions (e.g., coal, petroleum and petroleum products, and petrochemical products).
Emphasizing to clients that all ships will be monitored for AIS manipulation, and instances of AIS disablement inconsistent with SOLAS will be investigated and reported.
Identifying the vessels which, in the past two years, have a pattern of AIS manipulation not consistent with SOLAS and terminate business relationships with clients that continue to use those vessels.
Assessing the AIS history of all new clients and refusing to conduct business with vessels that have a history of AIS manipulation not consistent with SOLAS.
Adopting contractual language with clients, in the form of an “AIS switch-off” clause, allowing ship owners, charterers and operators to terminate work with any clients that demonstrate a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS.
Keeping and analyzing records, including, where possible, photographs, of delivery and recipient vessels and/or recipients located at ports when possible, to enhance end-use verification.
Providing regular case studies and updates regarding illicit activity in industry-wide circulars, particularly in relation to shipping and chartering oil and petroleum products. This should include the specific North Korea-related UN Security Council resolutions provisions regarding ship-to-ship transfers (UNSCR 2375, OP 11), as well as UNSCR 2397 (OP 13), which express concern that North Korea-associated vessels intentionally disregard requirements to operate AIS to evade UNSCR sanctions monitoring.
Communicating to counterparts as necessary and appropriate (e.g., ship owners, managers, charterers, operators) an expectation that they have adequate and appropriate compliance policies, which could include: 1) conducting their activities in a manner consistent with U.S. and UN sanctions, as applicable; 2) having sufficient resources in place to ensure execution of and compliance with their own sanctions policies by their personnel, e.g., direct hires, contractors, and staff; 3) to the extent applicable, ensuring subsidiaries and affiliates comply with the relevant policies; 4) having relevant controls in place to monitor AIS; 5) having controls in place to screen and assess onboarding or offloading cargo in areas they determine to present a high risk; 6) having
controls to assess authenticity of bills of lading, as necessary; and 7) having controls in place consistent with this guidance.
Ensuring employees who reveal illegal or sanctionable behavior are protected from retaliation, and ensure there is a confidential mechanism to report suspected or actual sanctionable conduct.
As shipping business arrangements may involve parties subject to the laws of different
jurisdictions, communicating relevant restrictions under U.S. and UN sanctions regimes to parties involved in a transaction can facilitate more effective compliance. The United States encourages all parties involved in the shipping industry to share this advisory with those in your supply chain.
Incorporating data into due diligence practices from several organizations that provide commercial shipping data, such as 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.
Requiring explicit contractual language that describes AIS disablement and manipulation inconsistent with SOLAS and sanctionable activity as of the contract date as grounds for termination of the contract and removal and denial of services. Additionally, parties could incorporate contractual language that prohibits transfers of cargo to clients that are not broadcasting AIS or have an AIS history that indicates manipulation inconsistent with SOLAS.
Circulating information about an award offered through the Rewards for Justice (RFJ) program that offers rewards of up to $5 million for information that leads to the disruption of financial mechanisms of persons engaged in certain activities that support North Korea, including illicit shipping activities, money laundering, sanctions evasion, cyber-crime, or weapons of mass destruction (WMD) proliferation. For more information, or to submit a tip, visit http://www.rewardsforjustice.net or e-mail firstname.lastname@example.org.
Circulating information about an award offered from the RFJ Program of up to $15 million for information leading to the disruption of the financial mechanisms of Iran’s Islamic Revolutionary Guard Corps (IRGC) and its branches, including the IRGC-Qods Force (IRGC-QF). For more information, or to submit a tip, visit https://rewardsforjustice.net/english/irgc.html.