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From the News Desk: US ‘stick-and-carrot’ approach to sanctions reaps dividends

Since the US Treasury’s Office of Foreign Assets Control intensified the pressure on global shipping to comply with sanctions policies on Venezuela, shipowners and operators have adopted a more risk-based approach to business

The relatively swift removals of the vessels from the Ofac blacklist will have underlined the upside to co-operating fully with US sanctions, according to observers

THE US administration issued guidance in mid-May for marine service providers to use vessel-tracking and other technologies to detect deceptive shipping practices to identify sanctions evasion.

The firm approach taken to enforcement has seen many shipowners now avoiding charters that involve Venezuelan calls, while marine insurers and flag registries have severed ties with Venezuelan ships. There is no sign that Ofac will be backing off any time soon, either.

Attorneys Bruce Paulsen and Andrew Jacobson told Lloyd’s List last week that there was “every reason to believe” US governmental agencies will continue a “full-court press on the shipping industry” in Washington’s effort to further pressure the Maduro regime.

But that is not to say that companies that change their operations as a result of US action will be permanently affected. Four Greek-linked tankers blacklisted by Ofac in the past month for ‘operating in the oil sector of the Venezuelan economy’ have now been removed and given parole after co-operating with US authorities on the issue.

Two of the vessels, the Thenamaris-managed very large crude carrier Seahero and the NGM Energy-linked Voyager I, were among four tankers sanctioned at the start of last month in a move widely interpreted as a warning shot to shipowners continuing to lift Venezuelan oil cargoes.

Removed along with them are the Chemnav-managed aframax Delos Voyager and the Eurotankers-managed aframax Euroforce, both of which were blacklisted just two weeks ago.

Thenamaris was first to acknowledge the development, saying that its VLCC had been removed from the list after “full co-operation” with the US authorities. The vessel’s registered owning company had also been removed.

Similar steps, notably declaring a halt to any further trading with Venezuela, have been taken by other owners to have their vessels wiped off the blacklist.

The relatively swift removals of the vessels from the blacklist will have underlined the upside to co-operating fully with US sanctions, according to observers.

“It certainly could be viewed as a stick-and-carrot approach. The US government will view these companies more favourably if they demonstrate a commitment to establishing a comprehensive compliance programme and implement internal controls to prevent them from doing business in jurisdictions that the US has targeted for sanctions,” said experts at US law firm Seward & Kissel.

Elsewhere, Lloyd’s Register said it has withdrawn class for eight sanctioned vessels linked to shipping Venezuelan cargoes in a further sign that US pressure on marine service providers has extended beyond insurers, flag registries and shipowners.

The classification society, along with Bureau Veritas, comprised the remaining members of the International Association of Classification Societies providing services for vessels connected to sanctions on Venezuela’s oil, energy and shipping sectors, according to the Lloyd’s List Intelligence database.

“Lloyd’s Register does not, as part of its function, monitor vessel movements or the switching on or off of Automatic Identification Systems,” Lloyd’s Register said in an emailed response to questions.

“We survey the physical condition of the vessel almost exclusively in port, or anchorage, against the statutory safety requirements in the classification rules and international conventions.

“However, in accordance with our programme for complying with sanctions’ laws, where we become aware of vessels operating in breach of relevant sanctions’ laws, LR classification has been withdrawn.”

Tanker owner’s ‘dismay’

Meanwhile, the owner of four tankers alleged to be carrying Iranian gasoline for Venezuela has spoken of his dismay at his group’s vessels becoming embroiled in US sanctions.

Speaking to Lloyd’s List, Capt George Gialozoglou, the founder of Greece-based International Marine Services (IMS), was reacting after US lawyers obtained a warrant from a judge in the District of Columbia federal court to seize the gasoil cargoes being carried by the group’s tankers.

The tankers, which are carrying a combined total of about 1.2m barrels of gasoline from the Middle East, have been named as Bella (IMO 9208124), Bering (IMO 9149225), Pandi (IMO 9105073) and Luna (IMO 9208100).

According to Lloyd’s List Intelligence vessel tracking data, the tankers have not switched on their vessel identification systems since May.

Documents filed in the court on July 2 alleged “a scheme involving multiple parties affiliated with Iran’s Islamic Revolutionary Guard Corps to covertly ship Iranian gasoil” to Venezuela. Washington has designated the IRGC a foreign terrorist organisation.

Capt Gialozoglou told Lloyd’s List the vessels were no longer heading for Venezuela. He denied the US allegations.

“We are not party to any conspiracy. We have nothing to do with the IRGC. It’s a nightmare,” Capt Gialozoglou told Lloyd’s List. “In shipping we are small players — taxi drivers carrying cargo from one port to another, that’s all.

“The vessels are all turning back. We are not going to break sanctions and we will obey the law. I always want to have a lawful cargo and a lawful destination and that is what I thought we had.”

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