Guidance for Classification Societies
Classification societies 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.
Keeping records, including photographs, of recipient vessels and/or recipients located at ports when possible, to enhance end use verification.
Adopting Know Your Customer (KYC) due diligence measures to the extent appropriate.
Sensitizing clients to potential sanctions risks related to activities involving Iranian, North Korean,
or Syrian, ports.
Providing regular case studies and updates regarding illicit activity in industry-wide circulars. This should include specific UN Security Council sanctions regarding ship-to-ship transfers with North Korean flagged vessels and AIS disablement or manipulation inconsistent with SOLAS under “Terms and Conditions” on the company’s website, particularly in relation to shipping and chartering oil and petroleum products.
Informing registrants and owners of vessels that sanctionable conduct may be cause for immediate termination of business and that the underlying due diligence/registration documents revealing information of the owners may be sent to the U.S. and any relevant UN body at the discretion of the classification society and consistent with applicable laws and regulations.
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 due diligence documents (e.g., registration documents for flag registries) include a color photocopy of the passports, names, business and residential addresses, passport numbers and country of issuance, phone numbers, and email of all individual owners of the vessel(s) and the names and IMO of all the vessels in the fleet of such ship owner, when appropriate.
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.
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 contractual language that describes AIS disablement and manipulation inconsistent with SOLAS and activity prohibited by sanctions 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.