Introduction
Israel’s recent entry into the maritime sanctions scene has added a new layer of complexity to the already challenging compliance landscape for shipping operators and service providers.
Seizure Warrants and Allegations
The National Bureau for Counter Terror Financing (NBCTF) under Israel’s Ministry of Defence has issued seizure warrants for 18 tankers, with three of those being issued in October 2023. These vessels are alleged to have facilitated Iranian oil sales benefiting Iran’s Islamic Revolutionary Guard Corps-Qods Force and Hezbollah.
Impact on Shipping Compliance
The sanctions are intended to hamper the tankers’ ability to trade and generate proceeds for these designated terrorist organizations. The NBCTF has identified prominent terrorist facilitators, including Muhammad Ja’far Qasir, a Hezbollah financier, and Syria-based Qatirji Group, which is under US sanctions. The US offers up to $10 million in rewards for information on Qasir.
While Israel’s sanctions regime may not have the same “bite” as Western sanctions implemented by nations with dominant global currencies and economies like the US, it still carries reputational risk. The underlying allegations could trigger further screening and investigations by service providers, potentially leading them to sever ties with the sanctioned tankers. This development creates additional challenges for shipowners, operators, insurers, and other service providers.
Challenges of Unilateral Sanctions
Experts argue that the proliferation of unilateral sanctions regimes, including Israel’s, increases the burden on commercial organizations to identify, understand, and manage competing legal restrictions. The lack of a single list of sanctioned individuals, entities, and vessels complicates the screening process, making it more difficult for companies to operate in a compliant manner.
The power of Western sanctions lies in their ability to block designated entities from accessing dominant financial systems, effectively cutting off their access. Israel does not have this leverage, but the reputational risk associated with dealing with vessels linked to designated terrorist organizations like Hezbollah and the IRGC could be enough to sway mainstream actors from doing business with them.
Conclusion
The Israeli sanctions campaign appears to be primarily directed at those who are concerned about negative publicity rather than targeting entities subject to Israeli jurisdiction. This approach may be similar to campaigns by groups like United Against Nuclear Iran. The NBCTF is proactively reaching out to service providers and industry stakeholders to raise awareness of these designations and encourage the inclusion of Israeli sanctions in global screening lists.
Ultimately, the proliferation of maritime sanctions regimes highlights the need for effective vessel due diligence to identify deceptive shipping practices and not solely rely on screening sanctions lists. As Eric Orsini, Head of Compliance and Regulatory Affairs at Lloyd’s List Intelligence, notes, even if Israeli sanctions lists are not ordinarily screened by a company, the underlying behavior triggering the sanctions could alert in negative news screening. This underscores the importance of conducting thorough vessel due diligence to ensure compliance with complex and evolving maritime sanctions regimes.
Original Article: Israel’s entry to sanctions game further complicates shipping’s compliance conundrum — Lloyd’s List