Cross-border maritime logistics is an important part of the global trade system. In recent years, the United States, India, Canada, Singapore, the Middle East and other countries have issued trade compliance guidelines to update the rules of cross-border logistics shipping. The recently released circular points out the deceptive shipping practices that violate the control regulations, including forging vessels and cargo documents to hide the destination of oil shipments; hiding the origin or destination of goods by means of ship-to-ship (STS) cargo transfer; closing the automatic identification system (AIS) of ships to hide the destination of goods shipped to Syria, Iran and other countries.
Foreign trade enterprises can take the following three steps to better prevent cross-border maritime logistics trade compliance risks.
The United States, the United Nations and the European Union have all blacklisted international logistics vessels that are subject to varying degrees of additional scrutiny. In addition to scrutiny of both sides of the transaction, it is prudent to review the relevant vessels used to transport such cargo (including sanctioned commercial aircraft), which may also expose companies to regulatory consequences.
The identification of controlled cargoes is extremely difficult; they are highly technical, specifically classified (e.g., minimum diameter of the designated orifice), and overly general. In addition, most countries do not require that the goods must be described in SWIFT (Bank Settlement System) messages or by way of bills of lading. Coupled with the system code is not specific enough to minimize the false alarm rate and other circumstances, the identification of controlled goods is very difficult. At the same time, dual-use goods are also the focus of compliance review, and some of them are at high risk of exporting dual-use goods. Enterprises can review all historical shipping documents documents to determine which goods are dual-use or military goods, and include such goods in the cargo screening system. Commercially available cargo databases can also be sought to help with screening, using commercial trade names (manufacturer/product names) to identify controlled goods and obtain information on sanctioned vessels, cities and ports.
The ports of call of corporate vessels may affect international trade compliance. Even if its port of call is a temporary stopping point limited to bunkering services, the presence of a cargo ship in a sanctioned port can have serious consequences. To ensure that loading vessels do not call at sanctioned ports, companies need to have a database of ports (including standard port codes as defined by the UN Trade and Transport Location Code), plan their proposed shipping routes (including all ports of call) and guarantee the ability of vessels to track their actual routes (traceable to the AIS transponder signal from the vessel).
"The shipping trade rules of various countries are in constant change, and Chinese enterprises going abroad should not only learn from the experience of their predecessors, but also be skilled in the latest shipping rules of exporting countries." Chen Fang said that it is necessary to actively build a trade compliance system, identify the risks of their own trade violations and take countermeasures, so as to ensure that they can continuously and predictably make compliant export plans and thus reduce the risk of cross-border maritime logistics trade compliance.
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