Compliance with international sanctions regulations have become a “new normal” in the daily operation of any company in the shipping community.  Whether your company is based in the US, South America, Europe, Africa or Asia, the worldwide reach of sanctions regulations is undeniable.  Organizations such as the US Department of the Treasury – Office of Foreign Asset Control (“OFAC”), the United Nations, the European Union, and Her Majesty’s Treasury have each promulgated extensive sanctions regulations affecting international trade.  More alarmingly, the sanctions landscape is constantly evolving and changing on a day-to-day basis, making it increasingly difficult and complex for company executives and risk managers around the world to react and take appropriate steps to ensure that their companies’ operation does not run afoul of these regulatory regimes.  Sanctions penalties continue to escalate, ranging anywhere from one hundred thousand dollars to hundreds of millions of dollars to blacklisting a company, its vessels and/or persons, tarnishing one’s business reputation and weakening its ability to trade.  The cornerstone of any regulatory body’s review of a sanctions incident and penalty assessment is whether the company in question has an effective compliance program in place and demonstrates a genuine appreciation and philosophy to avert the potential violation of any sanctions regulations. 

 

Shipping industry publications have commented that more than half of all companies in the maritime industry lack a well-defined sanctions compliance policy (“SCP”).  Liability insurance professionals and loss prevention specialists have further noted in their publications that there is no valid excuse in the prevailing economic and political climate for any shipping company, charterer or service provider to not have a proper SCP in place.

 

On May 2, 2019, OFAC recently issued “A Framework for OFAC Compliance Commitments” to both the U.S. and the international community highlighting the need for companies to implement risk-based sanctions compliance programs, and explaining the role that OFAC’s assessment of such programs will play in enforcement and sanctions violations investigations.  OFAC’s guidance encourages the implementation of SCPs with the following five essential elements:

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                                        Management commitment;

 

   

                                         Risk assessment;

 

 

                                         Internal controls;

 

 

                                         Auditing and testing; and

 

 

                                         Training.

 

GJT Marine has decades of hands-on experience with sanctions compliance issues in the shipping and insurance industries and can assist your company with the development of a sound SCP to satisfy all five of these essential components espoused by OFAC.  We can help you establish, maintain and periodically review all aspects of your SCP, as well as develop internal procedures within each department of your company toward this end.  GJT Marine can also conduct annual or periodic audits of your systems and procedures, as well as seminars or training sessions for your team to ensure that they can identify and appreciate the potential sources of sanctions risk related exposures that they may encounter in their respective daily duties and responsibilities, thereby enabling them to properly prepare for and assist senior management with the formulation of a responsible and fully informed decision and course of action in the face of a sanctions compliance situation.

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Because the risks posed by sanctions regulations varies from company to company due to the type of trade and operation, it is essential that any SCP to be developed be tailored to fit and correspond with those potential threats. GJT Marine will take the time to sit down, meet with senior management and company department heads and discuss each aspect of the SCP development process.  It is our hope that this process of cooperation and communication will enable us to tailor an appropriate SCP to fit the needs of your company, to do so in a cost-effective manner, and to put you on the path towards sanctions compliance.