Russian sanctions are here to stay says maritime industry expert

Sanctions against Russia are here to stay for the foreseeable future, even if a ceasefire agreement were to be reached in the Ukraine war, according to global head of maritime trade technologies & ESG at Pole Star, Simon Ring.

In an article for Seatrade Maritime News, he says Russia now faces the highest number of sanctions in the world, with at least 7,750 individuals facing sanctions along with 1,452 entities, 91 vessels and six aircraft.

New normal

“Even if a ceasefire in the current Ukraine war were agreed tomorrow, the sanctions would continue since it would take so long for Russia to be accepted as a normal trading partner by the G7 countries and their allies,” Ring argues.

He also reckons due diligence should entail screening all vessels and trade transactions to pick up suspicious activity by shell companies or front organisations that link back to Russia, which is capable of highly sophisticated workarounds when it comes to sanctions.

Red flags

With a focus on the maritime industry – Pole Star is one of the world’s leading providers of vessel-tracking, sanctions screening and regulatory solutions – Ring is most concerned with the vessels used in a trade.

Due diligence should seek to identify complex or changed ownership structures in companies supplying vessels for transactions and avoid using vessels or carriers with records of infringement or “going dark” by switching off AIS (automatic identification system) beacons he says.

Supply chain diligence

Ring also makes the point that it is no longer sufficient for parties to a transaction to understand only their part in it. Those in the maritime industry must go beyond due diligence regarding vessels and understand which banks are financing transactions and who the parties and beneficiaries are. “Just looking at vessels listed is not enough,” he concludes.

The same may also be said of banks that may increasingly need to more closely scrutinise entire supply chains in their due diligence processes.

Simon Ring’s article, Everyone must adapt to Russian sanctions as the new normal – here’s how, published by Seatrade Maritime News can be found here.

 



Categories: Trade Based Financial crimes News

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