U.S. agencies issue a compliance note for transportation industry

On December 11^th 2023, the Department of Justice (DOJ), Department of Commerce’s Bureau of Industry and Security (BIS), Department of Homeland Security’s Homeland Security Investigations (HSI), Department of State’s Directorate of Defense Trade Controls (DDTC), and Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a joint compliance note highlighting common sanctions elusion tactics deployed in the maritime and other transportation industries, as well as recent criminal and civil enforcement actions taken in response to alleged violations of U.S. sanctions and export controls. The note “Know Your Cargo: Reinforcing Best Practices to Ensure the Safe and Compliant Transport of Goods in Maritime and Other Forms of Transportation” also describes steps that the maritime and other transportation industries can take to ensure compliance with U.S. sanctions and export controls.

Overview

The highly integrated global economy that characterizes the current era involves the establishment of increasingly complex, multinational supply chains, involving the movement of cargo by sea, freight, and air. Yet such features also present opportunities to evade U.S. sanctions and export control laws, including by disguising the true origin, destination, or nature of their cargo, to facilitate illicit transit of cargo connected to proscribed actors in places like Russia, Iran, and North Korea, which are subject to broad U.S. sanctions and export controls, as well as China, which remains a major transshipment point for those seeking to engage in export controls evasion.

To avoid potentially illicit conduct, individuals and entities directly participating in and enabling the global transport of goods — like vessel owners, charterers, exporters, managers, brokers, shipping companies, freight forwarders, commodities traders, and financial institutions — must be responsible for assessing their risk profile and implementing rigorous, risk-based internal compliance programs. The adherence to appropriate compliance policies and procedures will reduce the risk of sanctions and export controls violations and evasion and will help ensure secure and transparent shipping practices.