Summary of US/UN/EU Sanctions and Best Practice

Transcription

1 Summary of US/UN/EU Sanctions and Best Practice

2 SANCTIONS? Usually refers to economic sanctions encompasses the deliberate, government-inspired withdrawal, or threat of withdrawal, of customary trade or financial relations. Customary refers to the levels of trade or financial activity that would probably have occurred in the absence of sanctions. Increasingly economic sanctions to achieve political goals - to achieve foreign policy aims

3 AN OLD REMEDY 1756: Britain effects blockade of French ports 1806 after defeat at Trafalgar, French outlaw trade to Britain 1807: US embargoes all foreign trade 1809: US says ok to trade with everyone EXCEPT Britain & France 1810: lifted to allow negotiation 1811: US wants France and Britain to stop harassing American ships in return for trade. France agrees. Britain does not and on 2 March 1811 all trade with Britain is embargoed (incidentally this embargo failed as US- British war) TEEKAY 3

4 TEEKAY POLICY To comply with all US, UN and EU sanctions To comply with all other relevant sanctions programmes; i.e. Canada, Australia

5 WHO IS CAUGHT? US US citizen/green card holder Any person located in the US US Corporation/US Partnership Foreign person who falls within extended jurisdiction EU and other countries Citizen/corporation/partnership in region Any person located within region

6 MODERN SANCTIONS 1996: Iran and Libya Sanctions Act 2006: UN sanctions Iran 2008: Australia sanctions Iran 2010: Comprehensive Iran Sanctions, Accountability and Divestment Act Canada sanctions Iran 2011: EU sanctions Syria Canada sanctions Syria 2012: Iran Freedom and Counter-Proliferation Act Iran Threat Reduction & Syrian Human Rights Act EU embargo on Iranian Oil 2014: executive orders regarding Ukraine/Russia EU sanctions Ukraine/Russia Canada sanctions Ukraine/Russia Australia sanctions Ukraine/Russia

7 IRAN No business with Iranian entities connected to the Government (includes IRISL and NIOC) Oil itself is not sanctioned- but NIOC owns most of it- but you can t export refined products under US law EU: (and Australia) Prohibits the import of Iranian oil and gas NB source of cargo is important NOT location Sidi Kedir, STS UAE and Far East Bunkers 6 month suspension as of has been renewed

8 SUDAN North Sudan: business with named individuals prohibited by US business and EU and US also sanctions oil South Sudan: oil no longer sanctioned BUT: No port in South Sudan- all has to come out of Marsa el Bashayer in the North

9 SYRIA US, EU and Australia all prohibit import of Syrian oil Also freeze on assets of named individuals LNG sanctioned

10 UKRAINE Designated persons have assets frozen Designated persons denied travel rights Cannot trade with those persons or companies they control All connected to individuals who are undermining Ukrainian rule NB fast moving issue- Crimean ports now create issues with insurance as Ukraine says it has no control over them. EU ban on all cargo originating from Sevastapol

11 OTHERS OF NOTE Libya: US and EU prohibit trade and frozen assets of certain named individuals (all connected to Gaddafi regime) Burma: certain banks sanctioned (again connected to regime and human rights violations, but easing recently) Ivory Coast: prohibit trade and frozen assets of certain named individuals (linked to promotion of violence) Cuba/North Korea

12 ISRAEL Arab League Boycott US Anti Boycott Legislation (if we don t want you to sanction, we will make it unlawful to comply) Can exclude Israel due to political instability, war risks but cannot give legitimacy to the Arab League Boycott

13 PENALTIES FOR BREACH

14 US PRIMARY SANCTIONS US PERSON- fines, property seized, assets blocked Non US person Block property... of any person who knowingly provides significant financial, material, technological, or other support to, or goods or services in support of, any activity or transaction on behalf of or for the benefit of... i. a person determined to be a part of the Iranian energy, ii. iii. shipping or shipbuilding sectors a person determined to operate a port in Iran an Iranian person included on the OFAC SDN List

15 US SECONDARY SANCTIONS Regulated by the State Department prohibitions on U.S. financial institutions from making loans in excess of $10 million to sanctioned persons; denial of export/import Bank guarantees; prohibition of any transactions in foreign exchange; prohibitions of transfers of credit or payments through U.S. financial institutions; Listed on Foreign Sanctions Evader s List blocking all property of sanctioned persons that are in the U.S. or in the possession or control of U.S. persons; and prohibition of imports by a sanctioned person to the U.S.

16 EU/UN/OTHER COUNTRIES FINES SANCTIONED YOURSELF (so no one can trade with you) LOSS OF INSURANCE COVER ASSETS SEIZED

17 CASE STUDY Demitris Cambis President of Impire Shipping Bought 8 tankers in late 2013 Investigation showed these were in fact owned/operated by his company as front for National Iranian Tanker Company (NITC) Cambis, ships and shipcos placed on SDN list Ships seized (just been scrapped) US Persons Potentially Impacted Ship Registry Service Corp, Classification Society, US Law Firm, Foreign Persons Potentially Impacted P&I Insurer, Singapore & Greek Banks, Telecommunications

18 Sanctions Policies

19 MONITORING spreadsheet of various risks - includes sanctions and steps to be taken for each region. Updated monthly with input from insurance and legal Legal signed up to direct government notification and law firm notices and reports whenever changes are made on sanctions Risk management team run 1/4ly checks of our address book against SDN list

20 PERSONS/COMPANIES List of individuals suspected of having terrorist connections or involved with various governments and regimes. No transactions with anyone on list NITC, IRISL- cannot charter to or from Guvnor- escaped sanctions Rosneft: cannot loan them money.their CFO is on the SDN list but owns less than 1% of shares and so it is not controlled by him for sanctions purposes

21 CHARTERING All charters must contain a sanctions clause: Charterer warrants that this charter and the cargo to be loaded under it shall at all times conform with any U.N./U.S./EU resolutions, directives, sanctions or recommendations regarding any countries within the trading area as specified in (insert trading range), irrespective of where loaded. All time, direct cost and direct consequences of breach of the above to be for Charterer's account. Charterers warrant they have an active sanctions compliance programme in force and nothing they order the vessel to do during the course of this charter will cause Owners to breach US and/or UN and/or EU sanctions Check who you are doing business with against SDN list

22 CHARTERING POLICY Exclude Iranian and Syrian ports No in/out charter from/to or STS to/from any entity on SDN lists (IRISL and/or NIOC) and their vessels Caution when loading Sidi Kedir or any STS in UAE or Far East. Turkey has also been used by Iranians who are increasingly desperate to sell their oil. Do not follow orders to call any port in sanctioned countries

23 CHARTERING POLICY: SOUTH SUDAN Must be recognised Charterer (oil major or trader we have confidence in) Sanctions clause is imperative - NO charter if not agreed Charterer warrants they have an active sanctions compliance policy in force. Charterer further warrants that the cargo originates solely from South Sudan and does not breach any US and/or EU sanctions currently in force Due to increasing unrest monitor and consider following: In the event that any sanction issue arises in relation to a voyage the vessel is performing, the Owners shall be entitled to refuse further performance and the Charterers shall be obliged to provide alternative voyage orders.

24 UKRAINE/RUSSIA Extreme caution Sanctions clause is imperative Charterer warrants they have an active sanctions compliance programme in force and nothing they order the vessel to do during the course of this charter will cause Owners to breach US and/or UN and/or EU sanctions Charterers warrant the cargo does no originate in the Crimea or from Sevastapot Fast moving situation, ports and Kerch Straits could be impacted: In the event that any sanctions issue arises in relation to a voyage the vessel is performing, the Owners shall be entitled to refuse further performance and the Charterers shall be obliged to provide alternative voyage orders.

25 COMPLIANCE / POST FIXTURE Need to track our compliance and show the policies are followed, not just written down: If no sanctions clause in a charter (and not trade where imperative) then make note of why When Bills of Lading received: shipper/consignee use the SDN search facility - record as a note in IMOS For agents we don t choose in certain regions (UAE/Far East): run names through the SDN search facility and make note in IMOS If requested to perform STS, run other vessel through search engine

26 IN-CHARTERING POLICY Run vessel name through search engine Run Owner (and possibly manager) through search engine Run receiving bank through search engine Sanctions clause: Both parties warrant to the other that they have an active sanctions compliance programme in force and neither party will do anything to breach US/UN and/or EU sanctions

27 BUNKERS AND PROCUREMENT All supply/bunker contracts should contain a clause: Supplier warrants they have an active sanctions compliance programme in force and nothing supplied under this contract will breach US and/or UN and/or EU sanctions Run all suppliers (and names of bunker barges) through SDN search engine.

28 SALE AND PURCHASE Counterparty to be run through search engine Vessel (if not ours) to be run through search engine If we are buying - run receiving bank through search engine Try to get a clause in: Both parties warrant they have an active sanctions compliance programme in force and nothing under this contract will breach any US/UN and/or EU sanctions

29 YARD CONTRACT Run yard through search engine Run receiving bank through search engine Run any bank giving a guarantee through search engine Try to get clause: Both parties warrant they have an active sanctions compliance programme in force and nothing under this contract will breach any US/UN and/or EU sanctions

30 SDN SEARCH ENGINE List/Pages/fuzzy_logic.aspx If any hits come up refer to legal Canada, EU: no searchable database. Most are on SDN list but for Ukraine, there are several on the list that are not on SDN. Most relevant to finance and we will circulate updates

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