Maritime Sanctions Enforcement Trends Emerge
Pole Star Global, in collaboration with Blackstone Compliance Services, has released a whitepaper titled “The Emerging Trends In Maritime Sanctions Enforcement”. The report highlights the increasing focus on sanctions enforcement by the Office of Foreign Assets Control (OFAC) and its international counterparts.
Since 2016, OFAC and the Coalition have prioritized maritime sanctions, with advisory after advisory focused on Iranian oil sales and enforcing the price cap on Russian oil. The current U.S. administration has set up a dedicated maritime desk within the U.S. Treasury and State Departments to enforce these sanctions.
Shift Towards Criminal Prosecution
The report notes that while OFAC civil penalties are still being levied, the U.S. government’s approach to enforcing maritime sanctions is shifting towards criminal prosecution. This shift has led to a significant increase in law enforcement actions against shipping companies dealing with Iranian crude.
In recent years, it has become routine for U.S. law enforcement to seize Iranian cargo, including high-profile matters such as the seizure of Iranian cargo from reputable companies and more routine seizures like Iranian oil passing through multiple vessels.
Real-Time Designations and Litigation Trends
OFAC‘s current strategy is to designate vessels, port operators, and other maritime parties in real-time after they interact with Iranian cargo. This approach has led to a significant increase in the number of designations, as OFAC seeks to sanction companies and their vessels for materially supporting sanctioned persons.
The report highlights the increasing trend towards litigation in the maritime sanctions space. Counterparties are challenging the use of sanctions clauses in foreign courts, while private companies are seeking damages to offset cargo seizures or losses from economic sanctions.
The vulnerability of maritime companies to sanctions is evident, as they face a higher risk of having their cargo blocked on the water and being mired in expensive litigation. In many cases, this means everyone loses – traders take a loss for the value of the cargo, shipowners are unable to charter their vessels, and middlemen who failed to exercise due diligence can be left on the hook for millions in damages as all parties try to claw back their losses.
The Pole Star Global whitepaper provides valuable insights into the emerging trends in maritime sanctions enforcement. As the global shipping industry continues to evolve, it is essential that companies understand the risks and consequences of non-compliance with these sanctions.
Original Article: – Cyprus Shipping News — Cyprusshippingnews