An article published recently by Associated Press, recounts the story of how an oil tanker attempted to conceal its true location whilst loading crude oil in Venezuela in contravention of US sanctions. The article recounted how the vessel spoofed the location transmitted by its Automatic Identification Systems (AIS) so that it appeared to be at sea in waters near Dominica.

The attempt to conceal the location was unsuccessful as a number of other factors considered by the authorities (and by companies offering maritime intelligence services) contradicted the location data transmitted by AIS. 

For example:

  • The AIS data at one point showed the vessel stopping and turning 180 degrees in 2 minutes but the size of the ship requires around 20 minutes to complete that type of manoeuvre;
  • The ship was physically spotted loading oil in Venezuela at the time AIS signals suggested it was at sea near Dominica; and
  • Subsequently, when the ship was back at sea after the Venezuela stop, the AIS data showed that the vessels draught (the distance from keel to waterline) increased significantly, indicating that it was now carrying a load, despite not having reported any port calls.

The article also pointed out that there are increasing examples of AIS being tampered with to help avoid detection of sanction violations. 

However, this is not a new threat. While examining the effectiveness of sanctions in relation to North Korea,  the UN Security Council Panel of Experts reporting pursuant to paragraph 2 of resolution 2407 (2018), highlighted the fact that false AIS transmissions were not being taken into account by global and regional commodity traders, banks and insurers. The report specifically criticised due diligence efforts in these areas.

In light of this, it's worth recalling the guidance  that OFAC published in 2020 which set out a number of recommendations to help manage the risk of illicit shipping and sanctions evasion practices, including:

  • Implementing a risk-based sanctions compliance program;
  • Knowing your customer and counterparty - aimed at flag registry administrations, insurers, financial institutions, managers, and charterers; and 
  • Exercising supply chain due diligence - aimed at  exporters and entities across the maritime supply chain.

There is no doubt that deceptive shipping practices designed to evade sanctions are high on the agenda of enforcement authorities globally. Participants in the maritime and trading sectors, should be mindful of the part that they are expected to play in managing this risk.

If you would like some help to implement a risk-based sanctions compliance program or would like to review your due diligence processes, please  contact Neal Ysart, Lead Regulatory & Investigations Advisor  at   /  Tel: +971 55 138 9250  or your usual Clyde & Co point of contact.