Legal

Rajah & Tann: “Black ships” of the Industry – US Sanctions and what they all mean

US sanctions have given rise to the Dark Web of Shipping and Covid-19 is likely to force shipowners to take unprecedented risks and supply to ‘black ships’, says Partner.

Published

4 years ago

September 8, 2020

Admin

Max Lim, a Partner of legal firm Rajah & Tann Singapore LLP, on Monday (7 September) provided marine fuel industry readers of Manifold Times a briefing on US sanctions of vessels, its side-effects in creating a black market, and future implications for the bunkering industry as these sanctions are expected to grow:

“Black ships” of the Industry - US Sanctions and what they all mean

In recent times, the US has paid very close attention to the shipping industry, making no secret of its intention to intensify sanction measures.

At last check, there are 389 vessels on the American “blacklist”.

This “blacklist” is none other than the notorious SDN List (Specially Designated Nationals and Blocked Persons List) maintained by the US OFAC (Office of Foreign Assets Control).

Iran, the perennial target, tops the list with 202 vessels.

47 vessels have been marked for links to Venezuela (a relatively recent entrant).

102 are connected to North Korea. The remaining are spread amongst Cuba, Libya, Syria and Ukraine.

In terms of vessel-type, besides the obvious oil tankers, they comprise bulkers and containerships.

In my view, the vessel-count on this “blacklist” is expected to grow for 2 reasons.

With strengthened surveillance and intelligence, more vessels with ties to these sanctioned nations will be identified,

But more importantly, US sanctions have given rise to a shadow economy - the Dark Web of Shipping. The adage that with great risk comes great reward rings true. But not just that. The ongoing pandemic crisis is also likely to force shipowners and the like to walk down the road less travelled, to take up opportunities that very few would.

At the same time, these sanctioned nations have huddled together - if anything, out of necessity, having been forcibly excluded from the international mainstream. A good example of that symbiosis perhaps would be Iran and Venezuela. At opposite sides of the Atlantic, but the former desperate to export, and the latter in a desperate need of gasoline.

But what does this all mean?

For bunker players and the maritime sector as a whole here and elsewhere, it means having to tread very carefully.

Companies that supply to these “black ships” or deal with blacklisted entities run the clear risk of themselves being placed on the SDN “blacklist”.

A company that finds itself on the SDN list will undoubtedly face difficulty doing business as banks and other companies are likely to steer clear, for fear of being “blacklisted” themselves. Such is the cascading effect of US sanctions, which is at the heart of its efficacy.

At a practical level, funds tainted by association with a sanctioned entity (or even suspected of this), may end up being blocked or quarantined in the banking system for an extended period of time. Apart from the cumbersome process of having the funds released, it may also have an adverse impact on cash-flow.

The “long-arm” of US sanctions has a far-reaching effect, far beyond US soil.. The US however has seen fit to lay down the rules - its rules. Those who abide by the rules, may stay and continue playing. But for those who don’t, they are confined to the lowest division, with no chance of promotion.

Photo credit: Pixabay
Published: 9 September, 2020

Bunker Fuel

SIBCON 2024: Bunker players sign SCMA pledge to drive progress within Maritime Singapore

Bunker players involved include Consort Bunkers, Equatorial Marine Fuel, Golden Island, Hong Lam Marine, Kenoil Marine Services, Marubeni International Petroleum and Sinopec Fuel Oil.

Published

2 days ago

October 11, 2024

Admin

SIBCON 2024: Bunker players sign SCMA pledge to drive progress within Maritime Singapore

Some 10 bunker players on Tuesday (8 October) signed a pledge with Singapore Chamber of Maritime Arbitration (SCMA) at the 23rd Singapore International Bunkering Conference and Exhibition (SIBCON).

The bunker players involved are Consort Bunkers Pte Ltd, Equatorial Marine Fuel Management Services Pte Ltd, Fratelli Cosulich Bunkers (S) Pte Ltd, Global Energy Trading Pte Ltd, Golden Island Pte Ltd, Hong Lam Marine Pte Ltd, Kenoil Marine Services Pte Ltd, Marubeni International Petroleum (S) Pte Ltd, Sinopec Fuel Oil (Singapore) Pte ltd and Victory Pte Ltd.

SCMA and the pledgees will work together to promote and enhance the capabilities and opportunities within the Maritime Singapore community and ecosystem.

Among the aspirational goals embodied by the SCMA Pledge is that the pledgees give preferential consideration, where appropriate, for the use of the SCMA Arbitration Rules for the resolution of their maritime or international trade disputes.

The bunker players may also use its best endeavours to support the Maritime Singapore community and ecosystem, including contributing to the development and dissemination of best practices as well as providing support and opportunity to young maritime legal and dispute resolution professionals in the form of internships, mentorships, and educational seminars aimed at fostering the next generation of maritime leaders.

SCMA, a specialist arbitration institution, is the only arbitration institution in Singapore focused on maritime and international trade disputes.

It offers the maritime and international trade sectors a set of arbitration rules and guidelines which are flexible and cost effective.

Users of SCMA arbitration include maritime companies, international traders and commodity companies for the resolution of their disputes such as those involving charterparty, bunker, commercial sales, cargo, oil and gas, shipbuilding and ship repair.

Photo credit: Singapore Chamber of Maritime Arbitration
Published: 11 October, 2024

Vessel Arrest

Singapore: Liberia-flagged tanker “Fair Star” placed under Sheriff’s arrest

Vessel was arrested at 9.05pm and is currently held at Eastern Petroleum Anchorage A; arresting solicitor listed was law firm Rajah & Tann Singapore LLP.

Published

4 days ago

October 9, 2024

Admin

An Liberia-flagged oil tanker, Fair Star, was arrested in Singapore waters on Saturday (5 October).

The vessel was added to the list of vessels under Sheriff’s arrest in Singapore’s court system.

According to the list, the vessel was arrested at 9.05pm and the arresting solicitor listed was law firm Rajah & Tann Singapore LLP. The ship is currently held at Eastern Petroleum Anchorage A.

No details regarding the reason behind the arrest were provided in the list.

Photo credit: MarineTraffic / Flare
Published: 9 October, 2024

Winding up

Singapore: Final meeting scheduled for K3 Shipping Pte Ltd

Meeting will be held on 4 November at 9am to hear any explanation that may be given by liquidators, according to Government Gazette notice.

Published

6 days ago

October 7, 2024

Admin

The final meeting of K3 Shipping Pte Ltd, has been scheduled to take place on 4 November, according to the company’s liquidator on a notice posted on Friday (4 October) on the Government Gazette.

The meeting will be held at 9am at 600 North Bridge Road, #05-01 Parkview Square, Singapore 188778.

It is being held for the purpose of having an account laid before the members showing the manner in which the winding up has been conducted and the property of the company disposed of and of hearing any explanation that may be given by the Liquidators.

The details of the liquidator are as follows:

Victor Goh
Khor Boon Hong
Marie Lee
Joint Liquidators
c/o Baker Tilly
600 North Bridge Road
#05-01 Parkview Square
Singapore 188778

According to Singapore-based B2B Sales Intelligence platform The Grid, the company’s main activity was in shipping, including chartering of ships and boats with crew.

Photo credit: Benjamin-child
Published: 7 October, 2024