Five Federal Agencies Issue Joint Advisory on Safe Business Practices and Compliant Transfer of Goods

The Department of Justice, Department of Commerce’s Bureau of Industry and Security (BIS), Department of Homeland Security’s Homeland Security Investigations (HSI), Department of State’s Directorate of Defense Trade Controls (DDTC), and Department of the Treasury’s Office of Foreign Assets Control (OFAC) today issued a joint compliance note highlighting common tactics deployed by malign actors in the maritime and other transportation industries as well as recent enforcement actions taken in response to alleged violations. Today’s note marks the first collective effort by the five agencies to inform the private sector about enforcement trends and provide guidance to the business community on compliance with U.S. sanctions and export laws. The Departments of Justice, Commerce, and the Treasury have previously issued two tri-seal compliance notes.

“Cargo shipments occur in increasingly complex geopolitical environments, and companies operating in this high-risk space must adhere vigilantly to U.S. sanctions and export control laws,” said Assistant Attorney General for National Security Matthew G. Olsen. “As today’s joint alert makes clear, we will hold accountable companies that do not maintain rigorous compliance programs and violate the law.”

“Those who move cargo play a key role in helping to prevent sensitive goods and technologies from falling into the hands of proliferators, terrorists, and other malign actors,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “Across the federal government, we are united in our message – if you have a role in moving cargo, you have a responsibility to ensure your services are not being exploited by those who would do this country harm.”

“As Iran and other sanctioned actors increasingly use deceptive shipping practices to attempt sanctions evasion, those operating in the shipping sector need to be vigilant and employ risk-based compliance measures to counteract these threats,” said Director Brad Smith of OFAC. “Engaging with these actors not only risks civil penalties for U.S. companies, but also non-U.S. companies that cause U.S. persons to violate sanctions.”

“Training, outreach, and information sharing between the federal government and the transportation industry are the first lines of defense in preventing foreign adversaries from illegally obtaining sensitive U.S. technology for nefarious purposes,” said Executive Associate Director Katrina W. Berger of HSI. “It’s extremely important we remain vigilant and work collaboratively to ensure compliance remains at the forefront of what we do, as our nation depends on it.”

The compliance note describes various deceptive shipping and transportation tactics deployed by malign actors to facilitate the illicit transfer of cargo. In addition, the note advises companies doing business in these industries to implement and strengthen their compliance controls as necessary, especially when operating in high-risk areas or with counterparties who exhibit odd behavior. The note further identifies several compliance practices that may assist companies in identifying potential efforts to evade U.S. laws.

The compliance note also highlights criminal and civil enforcement authorities that the relevant agencies have taken to combat the illicit shipment of cargo as well as recent enforcement actions. These cases include the first-ever criminal resolution by the Department of Justice against a bareboat charter of a crude oil tanker carrying contraband Iranian oil and civil enforcement actions taken by BIS and OFAC imposing civil monetary penalties.

The note makes clear that companies engaged in the maritime or other transportation industries must be vigilant in their compliance efforts. Such vigilance includes assessing their risk profile for potential violations of U.S. sanctions and export laws, implementing rigorous compliance controls to mitigate those risks, and taking any other steps necessary to verify the true nature, origin, and destination of cargo they are involved in transporting.