Navigating the Complexities of Maritime Sanctions: A July 2024 Overview

In July 2024, maritime sanctions evolved with the EU renewing measures against Russia and Iran, while OFAC sanctioned 5 new vessels and 2 companies. This contributed to a year-over-year increase of 128 vessels and 70 companies on the sanctions list, reflecting the broadening scope and complexity of global trade. The largest increases were observed in vessels flagged under Panama, Liberia, Comoros, and Swaziland, highlighting the importance of monitoring high-risk activities like AIS manipulation and STS transfers.

Renewal of Sanctions Against Russia and Iran

On July 22, 2024, the EU renewed its economic sanctions against Russia for another six months, extending them until January 31, 2025. These sanctions, initially imposed in 2014 and significantly expanded since February 2022, include a wide range of measures targeting trade, finance, technology, and more. Specific actions include bans on the import of seaborne crude oil and certain petroleum products, de-SWIFTing Russian banks, and suspending broadcasting licences for Kremlin-backed media outlets. The EU continues to maintain these measures in response to Russia’s ongoing aggression against Ukraine (Lenzu, 2024b).

On July 15, 2024, the EU extended sanctions against Iran until July 27, 2025, due to Iran's military support for Russia’s aggression against Ukraine and various armed groups in the Middle East and the Red Sea region. The Council prohibited the export of components used in the development and production of UAVs from the EU to Iran. These measures, reviewed annually, include restrictions on exporting equipment and technology that could bolster Iran's military capabilities, specifically impacting maritime transport and the provision of UAV and missile components (Lenzu, 2024a).

Analysis of Sanctioned Vessels and Companies

A year-on-year comparison reveals a substantial rise in sanctioned entities, with 128 new vessels and 70 new companies, reflecting the ongoing enforcement measures and the broader scope of sanctions implemented over the past year. The increase in the diversity of sanctioned entities by country, as illustrated in the second graph, highlights the expanding geographical focus of these sanctions risks - with the biggest increase in vessels flagged under Panama (11), Liberia (12), Comoros (11), and Swaziland (6).

The maritime industry continues to navigate a complex web of sanctions and export controls, with July 2024 witnessing developments in enforcement actions by the Office of Foreign Assets Control, while observing a quieter month from OFSI and EU without new sanctions on vessels and shipping companies.

The recent updates include notable additions to the list of sanctioned vessels and companies:

Sanctioned Vessels

• TIREX (9203772): Crude Oil Tanker, Panama-flagged, 25 years old (OFAC)
• WANJI (9215103): Chemical/Oil Products Tanker, Panama-flagged, 25 years old (OFAC)
• MIROVA DYNAMIC (9237618): Crude Oil Tanker, unknown flag, 23 years old (OFAC)
• OCEANIC II (9275995): Oil products Tanker, Hong Kong-flagged, 23 years old (OFAC)
• KASPER (9293143): Crude Oil Tanker, Panama-flagged, 21 years old (OFAC)

Sanctioned Companies

• BARCO SHIP MANAGEMENT INC (6389977): UAE-based company, commercial manager for TIREX, WANJI, and OCEANIC II (OFAC)
• SEA KNOT SHIPPING INC (6253546): Registered owner for MIROVA DYNAMIC (OFAC)

Understanding the pre-sanction behaviours of vessels such as WANJI, MIROVA DYNAMIC, and OCEANIC II provides critical insights into the complexities of maritime risk management and due diligence.

Risk & Compliance findings before the applied sanctions

The vessels WANJI, MIROVA DYNAMIC, and OCEANIC II had shown activities that raised compliance concerns before the sanctions were applied. These cases highlight the complexities in assessing risks in maritime operations, particularly with connections to sanctioned cargo, possible manipulation of the Automatic Identification System (AIS), and high-risk ship-to-ship (STS) transfers.

WANJI was linked to Iranian cargo (HSFO) as far back as 2023, with suspicions that it manipulated its AIS during a journey between Iran and the UAE during June 2023. This suggests that the vessel might have been trying to hide its true location, a common tactic used to avoid detection and evade sanctions.

MIROVA DYNAMIC was similarly involved in risky activities, connected to Iranian cargo (HSFO) in 2022 and participating in several high-risk STS transfers. These transfers, where cargo is moved between ships at sea, are often used to conceal the real origin or destination of the cargo, making it harder for regulators to track.

OCEANIC II had a more complicated risk profile, linked to Iranian cargo (HSFO) in May 2024 and Russian products (LSSRFO) from 2023. The vessel was also involved in high-risk STS transfers, further indicating its potential role in unlawful maritime operations.

These findings show that pre-existing patterns of behaviour like AIS manipulation and STS transfers are often early signs of future sanction breaches.

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