Five United States (US) departments have issued guidance to industry to detect possible attempts to evade US sanctions and export controls.

On December 11, 2023, 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,  was issued by the Department of Justice (DOJ), the Department of Commerce’s Bureau of Industry and Security (BIS), the Department of Homeland Security’s Homeland Security Investigations (HSI), the Department of State’s Directorate of Defense Trade Controls (DDTC), and the Department of the Treasury’s Office of Foreign Assets Control (OFAC). The compliance note highlights common tactics used by malign actors in the maritime and other transportation industries, and provides recent criminal and civil enforcement actions taken in response to alleged violations of US sanctions and export controls.  

Some points of interest from the compliance note are listed below:

When cargo becomes the subject of US enforcement actions (whether criminal or civil), the costs and reputational risks can be significant. Entities operating in maritime and other transportation industries are strongly advised to institute or confirm the existence of appropriate compliance measures that protect against the following practices, especially when doing business in high-risk areas and categories of cargo:

• Manipulating location or identification data
• Falsifying cargo and vessel documents
• Ship-to-ship transfers
• Voyage irregularities and use of abnormal shipping routes
• Frequent registration changes
• Complex ownership or management

Individuals and entities who participate in maritime and other transportation industries should implement and strengthen compliance controls as necessary. A non-exhaustive list of compliance practices that may assist in identifying potential regulatory evasion efforts includes the following:

• Institutionalizing sanctions and export control compliance programs
• Establish location monitoring best practices and contractual requirements
• Know your customer
• Exercise supply chain due diligence
• Industry information sharing

US DOJ can pursue civil and criminal actions to enforce US laws that are violated when malign actors seek to disguise the true origins of cargo or otherwise attempt to evade US sanctions and export controls.

BIS can bring administrative enforcement actions, such as actions seeking significant monetary penalties and/or the denial of a company’s ability to export items subject to the Export Administration Regulations.

The DDTC conducts civil enforcement actions against persons who violate the International Traffic in Arms Regulations (ITAR), including imposing administrative actions, levying monetary penalties, and/or debarring a company from engaging in ITAR activities.

OFAC can bring civil enforcement actions against persons who violate US sanctions regulations, including significant monetary penalties.

The full compliance note, Know Your Cargo: Reinforcing Best Practices to Ensure the Safe and Compliant Transport of Goods in Maritime and Other Forms of Transportation, can be found here.