Dimitris Ampatzidis, Risk & Compliance Analyst, Kpler, states that the UK’s new regulations emphasise transparency in the shipping industry, targeting deceptive practices like AIS spoofing and illicit transfers.
Data shows a notable rise in spoofing incidents and high-risk ship-to-ship transfers, increasing from about 200 in early 2022 to nearly 1,500 by mid-2024, underscoring the growing complexity of compliance challenges, Dimitris Ampatzidis notes. Maintaining comprehensive data and leveraging advanced analytics are essential for mitigating these risks, with real-time monitoring crucial for identifying suspicious activities amidst evolving regulatory demands.
Understanding the OFSI’s New Regulation
On 12 September 2024, the UK’s Office of Financial Sanctions Implementation (OFSI) issued new guidance poised to significantly impact the shipping industry. This regulation seeks to curtail unlawful activities at sea, including illicit ship-to-ship (STS) transfers, lapses in Automatic Identification System (AIS) signals, and the manipulation of AIS data. Industry stakeholders are now required to closely monitor their vessels, report any suspicious actions, and maintain meticulous records of their cargo and voyages. Failure to comply may result in substantial fines and irreparable reputational damage. For those involved in maritime trade, understanding and adhering to these new measures is not merely advisable—it is vital to ensuring the continued smooth operation of business in an increasingly regulated environment.
Challenges in Achieving Compliance
Monitoring global cargo movements presents a complex array of challenges, with concealed obstacles that can thwart even the most vigilant of operators. Ship-to-ship (STS) transfers exemplify this difficulty, often taking place in remote maritime zones, enabling the obscuring of a cargo’s true origin or destination, and complicating efforts to trace shipments accurately. Compounding the issue are gaps in AIS signals and instances of AIS spoofing, where vessels either vanish from tracking systems or transmit misleading location data. Such practices can be exploited to facilitate illicit activities, posing a significant threat to the transparency and accountability of maritime operations.
In recent months, the shipping industry has experienced a sharp rise in spoofing incidents and high-risk STS transfers, indicating a growing attempt to evade sanctions. Beginning in early 2022, with approximately 200 reported events, the frequency of these illicit activities steadily increased, surpassing 800 by mid-2022. Although there were occasional fluctuations, the overall trend remained upward, culminating in nearly 1,500 detected cases by mid-2024. This marked rise underscores the increasing sophistication of deceptive practices, particularly in regions where vessels engage in suspicious transfers or manipulate AIS data to obscure their true movements.
The Importance of Comprehensive Cargo and Trade Data
Under the new OFSI regulation, maintaining comprehensive cargo and trade data is now more critical than ever for ensuring compliance within the shipping industry. The guidance emphasises that companies must rigorously verify the legitimacy of their trade activities and undertake robust due diligence to avoid inadvertently breaching sanctions. Monitoring STS operations is pivotal in this regard. By closely scrutinising these transfers, businesses can identify unusual patterns that may signal potential violations of the new regulations. Equally important is detecting AIS gaps and spoofing. The guidance highlights that these deceptive tactics can be used to mask illegal activities, and companies are expected to safeguard the integrity of vessel tracking to prevent sanctions evasion.
Leveraging Data Solutions for Regulatory Compliance
To address the challenges posed by the new OFSI regulation, companies are increasingly adopting advanced data and analytics solutions to strengthen their compliance efforts. Real-time cargo tracking systems allow businesses to monitor shipments as they move across global supply chains, ensuring transparency and legitimacy at every stage. Enhanced monitoring of STS activities is also proving invaluable, enabling the detection of unusual patterns—such as unexpected transfers in high-risk areas or dealings involving sanctioned cargo—which could indicate sanctions violations. Equally critical is identifying anomalies in AIS signals. By detecting gaps or instances of AIS spoofing, companies can expose attempts to obscure illicit activities. By the third quarter of 2024, the incidence of spoofing events and high-risk STS transfers had surged fourfold compared to the quarterly average at the start of 2022.
Above article has been initially published in the MarineTraffic website and is reproduced here with author’s kind permission.
The views presented are only those of the authors and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.
