US sanctions framework in dark fleet context

1. OFAC: Office of Foreign Assets Control. A U.S. Treasury department that administers and enforces economic and trade sanctions. Compliance is mandatory for U.S. persons and companies, and often de facto for international businesses using the U.S. financial system.
2. SDN List: Specially Designated Nationals and Blocked Persons List. OFAC’s main list of individuals and companies owned or controlled by, or acting for, targeted countries or groups. Their assets are blocked, and U.S. persons are generally prohibited from dealing with them.
3. SSI List: Sectoral Sanctions Identifications List. An OFAC list for specific sanctions targeting key sectors of the Russian economy (e.g., financial, energy, defense). Unlike the SDN List, entities are not fully “blocked,” but certain types of transactions and dealings with them are prohibited.
4. SDN/SSI Screening: The process of checking business counterparts (vessel owners, charterers, suppliers, etc.) against OFAC’s SDN and SSI lists to ensure no prohibited dealings occur. A core compliance requirement.
5. 50% Rule: An OFAC rule stating that any entity owned 50% or more in the aggregate by one or more SDNs is itself considered an SDN, even if not explicitly listed on the SDN List. This requires “piercing the corporate veil” to identify beneficial ownership.

ISM-Code: Two certificates are mandatory under the ISM-Code

• Document of Compliance (DoC): The DoC is a certificate issued to a shipping company which complies with the requirements of the ISM-Code.
• Safety Management Certificate (SMC): The SMC is issued for an individual ship to confirm that the company and its shipboard personnel operate that ship in accordance with the approved safety management system (SMS).

Deceptive Shipping Practices

A set of methods used to obscure the origin, destination, or nature of cargo and vessels to evade sanctions. OFAC and others have published advisories highlighting these. Key practices include:

1. Flagging/Re-flagging: Frequently changing a vessel’s flag state to obscure its identity or benefit from lax oversight.
2. Falsified Documentation: Using forged documents for cargo, insurance, or vessel registration.
3. AIS Manipulation: Automatic Identification System (AIS) is a vessel tracking system. Manipulation includes:
   • AIS Spoofing: Broadcasting false location data.
   • AIS Disabling: Turning off the transponder to create a “dark” vessel.
4. STS Transfers: Ship-to-Ship transfers. The transfer of cargo between ships at sea. While often legitimate, they are used in sanctions evasion to obfuscate the origin of cargo by transferring it from a sanctioned to a non-sanctioned vessel in a remote location.
5. Voyage Anomalies: Illogical routing or unexplained port calls designed to hide the true destination of cargo.