Gard applauded Pottengal (Muku) Mukundan, Director of the ICC International Maritime Bureau (IMB) and Director/CEO of its holding body ICC Commercial Crime Services, for the information he provided concerning the incidence of fraudulent bills of lading.
According to IMB's data, the Non Vessel Owning Common Carriers (NVOCCs) are those who often issue more than 90% of all suspect bills of lading.
Suspect bills of lading are those which have false content including the wrong vessel, dates, description of cargoes, container numbers, quantities or parties. They are presented to banks in order to commit fraud, money laundering, illegal capital flight and sanctions breaches.
There is a great number of NVOCC operating to a very high standard, but there are a large number of NVOCCs who operate unregulated with no meaningful standards of trade knowledge or care. Those operating illegally, issue bills of lading financed by banks, but they pose fraud and money laundering risk for the banks and other stakeholders in a trade transaction.
On the contrary, the aim of the Register is to encourage a greater degree of accountability upon the NVOCCs, raise awareness of the critical role played by the bill of lading in the trading chain and how it relies upon by other stakeholders such as cargo owners, shipowners, banks and customs authorities.
The key characteristics of the IMB NVOCC Register are:
- The Register will be open to all NVOCCs around the world.
- Signing up to the Register requires the NVOCC to adopt the Code of Conduct set out in the Register.
- NVOCCs are required to provide their full contact details including physical addresses and the names of two Directors (Designated Persons) who assume responsibility for the NVOCCfollowing the Code of Conduct and to respond to queries from the IMB regarding bills of lading issued by them.
- The Code of Conduct sets out a minimum standard of practice by the NVOCC in the issue and processing of bills of lading. The Code of Conduct will also require the NVOCC to promptly answer questions from the IMB regarding the bill of lading.
- The NVOCC seeking registration with the Register will be required to sign this Code of Conduct, valid for a year.
- The NVOCC is required to maintain key documents relating to the NVOCC bill of lading issued by them for a period of three years.
- The identity of all registered NVOCCs will be displayed on a dedicated website set up by the IMB available to the banks. This website will not have information on the Designated Persons.
Gard highlights that
If the NVOCC is unable to satisfactorily explain a query regarding a bill of lading issued by them or there is evidence a bill of lading issued by them contains false information, it will be recorded as a “strike” in the IMB database against them. Two such “strikes” within a year will risk them being removed from the Register unless they can show that key staff have successfully gone through the on-line NVOCC Training course available at the ICC Academy and they have put practices in place within their organisation to ensure these errors are not repeated.