Collective Advisory from DOJ, Commerce, Homeland Security, State, and Treasury for the Maritime and Transportation Sectors on Know-Your-Cargo Policy

The Departments of Justice, Commerce (through its Bureau of Industry and Security - BIS), Homeland Security (via Homeland Security Investigations - HSI), State (specifically, the Directorate of Defense Trade Controls - DDTC), and the Treasury (comprising the Office of Foreign Assets Control - OFAC) have jointly released a compliance note. This note highlights tactics employed by malicious entities in the maritime and transportation industries, alongside recent enforcement actions taken against suspected violations. This collective endeavor represents the inaugural collaboration among these five agencies, aiming to inform the private sector about enforcement patterns while offering guidance on adhering to U.S. sanctions and export laws. It's worth noting that the Departments of Justice, Commerce, and the Treasury have previously issued two tri-seal compliance notes.

“Cargo shipments occur in increasingly complex geopolitical environments, and companies operating in this high-risk space must adhere vigilantly to U.S. sanctions and export control laws,” said Assistant Attorney General for National Security Matthew G. Olsen. “As today’s joint alert makes clear, we will hold accountable companies that do not maintain rigorous compliance programs and violate the law.”

Deceptive shipping practices are increasingly being employed by Iran and other sanctioned actors in attempting sanctions evasion, as noted by Director Brad Smith of OFAC. It is emphasized that vigilance and the utilization of risk-based compliance measures are required by those operating in the shipping sector to counteract these threats. It is highlighted that engaging with these actors poses risks not only for U.S. companies in terms of civil penalties but also for non-U.S. companies that cause U.S. persons to violate sanctions.

The significance of training, outreach, and information sharing between the federal government and the transportation industry as the primary lines of defense in preventing foreign adversaries from illegally obtaining sensitive U.S. technology for nefarious purposes was stressed by Executive Associate Director Katrina W. Berger of HSI. It is underscored that it is of utmost importance to remain vigilant and work collaboratively to ensure that compliance remains at the forefront of actions, given its critical importance for the nation.

The compliance note outlines diverse deceptive strategies employed by malicious entities in shipping and transportation to enable the unlawful movement of cargo. Moreover, it offers guidance to companies operating within these sectors to establish and reinforce their compliance measures as needed, particularly in high-risk zones or when dealing with partners displaying suspicious conduct. Additionally, the note highlights various compliance practices that could aid companies in detecting potential attempts to circumvent U.S. laws.

The compliance note additionally focuses on the criminal and civil enforcement measures pursued by the pertinent agencies to counter illegal cargo shipments, detailing recent enforcement actions. These instances encompass the Department of Justice's landmark criminal resolution targeting a bareboat charter of a crude oil tanker transporting illicit Iranian oil, alongside civil enforcement actions carried out by BIS and OFAC, imposing civil monetary penalties.

The note emphasizes that companies operating within the maritime or other transportation sectors need to be highly attentive to their compliance endeavors. This attentiveness involves evaluating their risk exposure concerning potential breaches of U.S. sanctions and export laws. Furthermore, it entails establishing robust compliance protocols to minimize these risks and undertaking any essential measures to authenticate the precise nature, source, and destination of the cargo they are responsible for transporting.