Sanctions The Ship Owner s Perspective. Edward Dempster Group Risk Manager

Transcription

1 Sanctions The Ship Owner s Perspective Edward Dempster Group Risk Manager

2 STAR Reefers Operates 32 modern specialised reefer vessels (youngest fleet in the industry); Long- term business relationships with blue chip customers Carriage of bananas/fruit from Southern to Northern hemisphere; Political/security issues in many of the load port countries; Experience with sanctions compliance.

3 Problems No consistency in legislation; Grey areas e.g. bunkering; Diverse lists of blacklisted individuals / companies; Banks targeting all transactions (majority legitimate); Security issues in sanctioned countries.

4 Consequences of Non Compliance Financial/criminal penalties against company, directors, officers; Arrest/detention of ship(s) and cargo; Blacklisting of ship/fleet/company; Freezing of assets/ bank transfers; Expulsion from Flag; Loss of insurance cover.

5 Ship Relationships CHARTERERS COMPULSORY THIRD PARTIES (PSC, LOCAL CUSTOMS, HARBOUR MASTER) CARGO INTERESTS BUNKER SUPPLIERS LOCAL BANKS SHIP PORT SERVICES SHIP CHANDLERY REPAIRS STEVEDORING CONTAINER MANAGEMENT LOCAL AGENTS

6 Sanctions Compliance Diet CHARTERERS COMPULSORY THIRD PARTIES SHIP DEFINED CARGO INTERESTS

7 Ship s Relationships Charterers should bear majority of risks of attendance/responsibilities; Charterers bills? Cargo Interests (1) straight non-negotiable bills (2) tackle to tackle not TT (3) No LOI agreements for non- presentation; Bunker suppliers not supplied locally/charterers warranty on origin; Stevedoring/container management Charterers contractual responsibility; Ship chandlery (charts, food, spare parts) not required; Compulsory third parties (PSC, local customs, harbour master) unavoidable - close support from P&I correspondent.

8 Charterer Core relationship ( make or break ); Long standing relationship of mutual trust and co-operation; A man of substance ; Not based in the sanctioned country; Full understanding of legal and beneficial ownership and activities of other corporate dealings/subsidiaries in-depth research report; Charterers P&I/DTH cover.

9 Charterparty Clauses Trading Areas/sanctioned counties Safe Port/Berth and Lawful cargo Loading/stowing/discharge/stevedore services Charterers BIMCO Stevedore Damage Clause 2008 Specified bills/advance disclosure of cargo interest s identity BIMCO Sanctions Clause for Time Charterparties BIMCO Stowaways Clause BIMCO Piracy Clause 2013 BIMCO VoyWar/Conwartime 2013 Clause

10 Charterparty Clauses - 2 Bunker Clause - location/origin Charterers due diligence searches (agents, cargo interests, suppliers) - e.g. BIMCO Designated Entities Clause Charterers P&I/DTH Insurance BIMCO Non Lien Provisions Law/jurisdiction clause for CP and Bills

11 Enquiry by Charterers Research/Risk analysis/legal advice Senior Management/Board s approval Timeline Charterparty Advice to all depts. on special sanctions measures Special measures in Load Port Review of bills Security measures for voyage/port War risk declarations Final sanctions search for bill holders Arrival/cargo delivery Payment of DAs

12 Risk Assessment USA, EU, UK, UN, ship s Flag and shipowner s country of domicile sanctions laws; Due diligence searches required; Cargo type, cargo interests, likelihood of cargo claims; Charterers; In-depth review of port, agents, country; Method of payments; Avoidance of breach of sanctions, money laundering and anti-bribery regulations; Vessel security transits and port (additional measures and costs) piracy, war, local disturbances.

13 Named Entities Search Charterer, cargo interests, agents, port; Do it yourself against USA, EU, UK, UN SDN lists?; Maintain copy of searches; Specialist third party e.g. Infospectrum; Much wider range of searches Bank of England, Bureau of Industry and Security, Department of State, EU Terrorism List, FBI Top Ten Most Wanted, Interpol Most Wanted, OCC Shell Bank List, Office of Foreign Assets Control (OFAC) Sanctions and SDN & Blocked Entities, Treasury PML List, SECO List, UN Consolidated List, WorldBank Debarred Parties List, CBI List, ICE List, 600+ law enforcement and courts lists, 20,000+ public-domain adverse media, and Politically Exposed Persons lists covering 240 countries.

14 Summary Must be for right reasons; Only if Charterer reliable; Transfer of responsibilities/risks/transactions to Charterer; Strong Charterparty protections; No involvement locally; Full due diligence checks on all parties; Background checks using specialist provider; Prevention of violation through the back door; Strong emphasis on preventing associated risks - money laundering, bribery, cargo claims and ensuring security and crew safety.

15 THANK YOU!