US compliance notice: Know Your Cargo

Several Group Clubs reported on Friday that on December 11th 2023 five US agencies – the Department of Justice, the Commerce Department’s Bureau of Industry and Security, the Department of Homeland Security’s Homeland Security Investigations, the State Department’s Directorate of Défense Trade Controls, and the Treasury Department’s Office of Foreign Assets Control (OFAC) – released a joint compliance note entitled Know Your Cargo: Reinforcing Best Practices to Ensure the Safe and Compliant Transport of Goods in Maritime and Other Forms of Transportation, which highlighted tactics commonly deployed by “malign actors” in the transportation sector, as well as pointing out best practices for the maritime and other transportation industries.

The Compliance Note provides guidance for all companies in the maritime sector – vessel owners, charterers, exporters, managers, brokers, shipping companies, freight forwarders, commodities traders and financial institutions, including (re)insurers.

The Clubs said that entities and individuals – both US and non-US – that were involved in global transportation industries should “carefully consider their exposure to US sanctions”.

Recent enforcement actions demonstrated that non-US persons could face potential civil or criminal liability when their transactions involved a US nexus, under the theory that they would be “causing” US persons to violate sanctions.

Furthermore, even where their transaction had no US nexus whatsoever, non-US companies transacting directly or indirectly with sanctions targets could be exposed to the risk of designation pursuant to executive orders that authorized sanctions for providing material support to blocked persons.

The notice concluded that “the Compliance Note provides a reminder that the maritime industry is not just responsible for adhering to the price cap on Russian oil, but also detecting and preventing deceptive maritime practices relating to Iran, North Korea, and other sanctions programmes.”