Thursday, April 29, 2021

Oil Tanker Seized by U.S. Authorities for Illegal North Korean Trade

 

https://ihsmarkit.com/research-analysis/tanker-seized-by-us-authorities-for-illegal-north-korean-trade.html 

The U.S. government has seized an oil tanker for involvement in ship-to-ship (STS) cargo transfers with a sanctioned vessel and other sanctions evading activity. The vessel Courageous (IMO: 8617524), owned and operated by a Singaporean citizen, stopped transmitting its AIS (Automatic Identification System) location signal between August and December 2019. During this period, the Courageous transferred oil cargo worth $1.5m to the North Korean flagged vessel Saebyol (IMO:8916293). Saebyol eventually discharged her cargo at the port of Nampo, North Korea.

In the period leading up to the STS cargo transfer, the movement activity of the Courageous placed it at the port of Kaohsiung throughout 2019. She idled in the anchorage of the Taiwanese port for considerable periods of time both before and after the STS with the Saebyol. After her prolonged period of not transmitting an AIS signal, the Courageous reemerged back on the radar in February 2020 at Kaohsiung and departed for Cambodia. On reaching the port of Kompong Som, in Cambodia in March, the vessel was held by Cambodian authorities and subsequently seized by the U.S.

As part of the STS operation with the Saebyol, the Courageous was also noted to have falsely identified itself as another vessel. She has previously operated under the name Sea Prima with the flag of St Kitts and Nevis.

The pattern of activity by the Courageous closely resembles that of another vessel, the Wise Honest, seized by the U.S. in 2019. The two vessels have a similar movement pattern used to evade sanctions ranging from AIS dark outages, STS cargo transfers and falsifying cargo documentation with which to transmit payments through the U.S. financial system. This latest seizure of the Courageous underlines the key sanctions evasion techniques highlighted in the Office of Foreign Assets Control (OFAC) advisory of May 2020 on 'Guidance to Address Illicit Shipping and Sanctions Evasion Practices'. The United Nations Security Council has also imposed economic sanctions on North Korea, prohibiting among other things the conduct of ship-to-ship transfers with DPRK-flagged vessels and the provision of petroleum products to North Korea.

Within the OFAC advisory a series of deceptive shipping practices were highlighted as operational recommendations for sanctions compliance teams to be aware of and to incorporate into their daily maritime screening processes. There is a strong correlation between OFAC's general practices for identifying shipping risk and the evasion of sanctions by the Courageous.

The core OFAC recommendations are:

  • Disabling or Manipulating a Ship's AIS Signal: The Courageous had minimal coverage under AIS, when its AIS was transmitting there was very little port call history, suggesting a vessel not fully engaged in normal shipping practices
  • Flag Hopping and Flag Changes: In 2019-2020, the Courageous changed flags on three separate occasions, flags of convenience were used in all cases
  • Vessel Name Changes: Between 2016 and 2019 a series of name changes to the vessel also occurred - Blue Sea, Sea Prima and finally Courageous
  • Age of the Ship: Older vessels have been identified as being more likely to be engaged with illegal maritime activity. The Courageous was built in 1987
  • Ownership and Management: Four different corporate entity changes occurred within the ownership structure of the Courageous between 2017-2020

Additionally, the vessel had no port state control inspection since 2004 and had been 'disclassed' by the Nippon Kaiji Kyokai ship classification society in 2011. While flags of convenience, vessel name or ownership changes do not always constitute red flags, when taken as a whole with a pattern of AIS outages, no hull inspection activity and prolonged periods of idling, the risk level increases for that ship.

For trade compliance teams to protect themselves, they must ensure they include in their toolbox the key lessons from the seizure of the Courageous and understand the types of activity such vessels engage in order to avoid transactional risk.

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Posted 27 April 2021 by Byron McKinney, Director - Product Management, Maritime & Trade, IHS Markit

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