This Economic Sanctions - Compliance Guidance document provides guidance on certain sanctions related resources which can be utilized by the American Club’s Membership to not only foster and encourage general awareness of sanctions issues, but also to enable operators to develop their own internal compliance policies and procedures and to appreciate the interplay between such sanctions laws and their potential effect on a operator’s P&I and/or FD&D coverage. The American Club has issued and disseminated considerable information in the form of Circulars, Alerts and seminars on sanctions related issues and the Membership is encouraged to not only consult these existing resources and to seek legal advice from counsel, but also to reach out to the Managers of the American Club (“the Managers”) to obtain preliminary information on the existing sanctions regimes. When used in conjunction with an operator’s internal compliance program and, as discussed below, this guidance would minimize risks and exposures to potential sanctions violations which may carry serious civil or criminal penalties, entail loss of business privileges and cause reputational harm.
Operators are urged to consult legal counsel when their compliance program and due diligence investigation into a particular transaction or contemplated voyage raises any sanctions related concern. Then, after completing such due diligence, with respect to whether cover is available from the American Club for the transaction or voyage in question, operators should contact the Managers to confirm whether the performance of the contemplated transaction or voyage may or may not prejudice their P&I cover.
Sanctions prohibitions may be implicated based on the main elements of information related to maritime transportation and a particular cargo shipment transaction. These elements traditionally include the following:The country involved in the trade of vessels/origin and destination of cargo
- The nature of or type of cargo being transported
- The identity and domicile of the cargo shippers and receivers (end-user)
- The identity and domicile of the charterer and/or any subcharterers
- The identity and domicile of other parties involved in the transportation;
- The load port(s) and/or the discharge ports, involved, including the identities of terminal operators there
- The identity and domicile of any banks involved in connection with any relevant bank guaranties, letters of credit for the cargo in question, etc. and
- The purpose for which the cargo will be used once delivered.
As part of their internal sanctions compliance program, operators should investigate all of these elements when considering or contemplating a proposed transaction or voyage to better assess any
potential sanctions issues.
It is hoped that, through such internal compliance and due diligence investigation, when combined with its consulting legal counsel and maintaining close communication with the American Club to address any issues regarding cover, this resource will assist the American Club’s Membership to better navigate these complex issues and reduce overall exposure to sanctions related problems and risks.
Further details may be found by reading the guidance below
Source: American P&I Club