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What do you do when the Bank has a transaction on behalf of a vessel that stopped in a sensitive/sanctioned port?

Andreea Tampu

Let it be clear from the beginning that I am not talking about trade finance.

The international shipping scenery is characterized by the presence of numerous intermediaries that offer different services to vessels that cross international waters and stop in international ports.

Andreea Tampu is a Certified Compliance Officer with a bank in Romania

So what should the Bank do?

Many banks consider that vessel tracking is the solution.

There are several useful websites that show you the latest ports in which a vessel stopped:

https://www.vesselfinder.com/

http://www.shippingexplorer.ne...

http://www.shipspotting.com/

But, as I already stated, it is impossible to monitor all transactions of a customer and make vessel tracking for all the vessels on whose behalf it receives and makes payment orders.

After a period of vessel tracking we tried a different approach, basically starting with a sound Risk Assessment:

1. Thorough documentation on this domain, its particularities and its actors from public documents offered by the Romanian National Administration of Ports and from direct discussions with the branch staff working directly with these customers, so that I fully understood what they do, how they operate and thus what is their expected transactional profile (the results of my efforts are at the beginning of this article);

2. Looking for international guidelines. Fortunately, I found the “Guiding Principles for Sanctions Issues Related to Shipping and Financial Products” which cleared many of my questions like: can a vessel stop in a sanctioned port (yes), should this, solely, prevent a bank from processing a transaction on its behalf (no), is vessel tracking useful in the situation presented in this article (not really), etc.

3. Targeted analysis on the most active customers of the bank working in this domain, so that I could understand their activity and see if their account activity matched their expected transactional profile. The individual analysis was focused on the risks posed from the international sanctions perspective and I made in-depth checks of the vessels and ship owners involved (including vessel tracking, public information, registrations in AML and Sanctions lists).

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