An Emerging Threat: Vessel Identity Laundering

Researchers warn that illegal export operations are becoming "significantly more sophisticated" and that criminals fraudulently obtain ship registration numbers to evade maritime sanctions.


C4ADS, a non-profit organization focused on national security issues, has identified several cases where the International Maritime Organization (IMO) was deceived into giving "clean" identification numbers to sanctioned ships.


It makes blacklisted ships appear legitimate, along with the practice of so-called anti-identity laundering. In a detailed report, C4ADS says this results in "unprecedented challenges for maritime regulators and risks undermining global shipping practices."


Researchers have long warned that some ship operators are finding ways to manipulate automatic identification system (AIS) signals by temporarily disguising their true identity or location. In addition, it is known that the physical appearance of ships can also be changed by repainting and structural studies, sometimes in order to mislead the detection technology that uses satellite images of criminals.


However, a ship's IMO number is unique and cannot be changed throughout its service, even if its ownership, flag registration, name, or other details change. Registration with the IMO, therefore, "provides a level of legitimacy that allows the ship to access the regulatory and financial services it needs to operate and operate commercially safely," says C4ADS.


His research reveals that sanctions avoidance operations have found a way to trick IMO into giving a seemingly new and legitimate identity to a ship where no such new ship actually exists. It refers to this new record as the "shell id."


Techniques such as physical identity tampering, such as painting over a ship's original IMO number, and the submission of misleading documents are used to make an application for registration appear legitimate. In some cases, multiple existing ships are included as part of the spoofing process.


Risk for Maritime Trade

The studies carried out cause the relevant authorities, especially the US Office of Foreign Assets Control (OFAC), to pay more attention to maritime trade.


In last year, OFAC published a detailed advisory with industry-specific guidance for insurers, financial institutions, shipping companies, and others involved in the seaborne goods trade. Other regulatory bodies have followed suit since then.


This increase in activity has led to warnings that financial institutions that fail to detect illegal activity may be on the receiving end of enforcement action. However, in the case of identity laundering, C4ADS says the direct risk to institutions is not simple.


The regulations call for periodic resubmission of ship photos and other information as a precaution and improvements to the organization's due diligence protocols, including the threat of deregistration for operators who do not comply.


Vessel Screening | Vessel Sanctions Screening Software

The content and types of sanctions are very different. Sanctions can be imposed on countries, individuals, organizations, vessels, and aircraft. As the maritime industry is international, the risks and regulations are higher. According to local and international AML regulators, parties with a commercial business relationship with the vessel must follow due diligence procedures. 


Sanction Scanner Vessel Screening enables parties to carry out due diligence procedures. The purpose of Vessel Screening is to avoid and detect business relationships with the sanctioned vessels. Failures in due diligence processes result in businesses losing their reputation and being penalized by regulators.


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