Maritime Trade Compliance

‍BITE is a tool suite that assists companies in multiple domains to reduce risk in their supply chain. Our AI technology assists companies to remain on the right side of compliance through cost-effective, easy-to-use tools.

This document covers information and processes to assist companies with maritime trade compliance.

What is maritime trade compliance: The maritime trade’s due diligence and screening requirements include sanctions enforcement, strategic trade controls, contraband smuggling, forced labor laws and other trade protections as well as counterparty risk assessments and illicit vessel activities. Maritime trade risk-management operators have perhaps the broadest compliance responsibilities because almost all global trade (90%) travels via ocean carriers - Vessel Operating Common Carrier (VOCC) or Non-Vessel Operating Common Carrier (NVOCC).

Common carriers such as VOCCs are generally exempt from seizure and forfeiture while conducting transactions as a business of a common carrier BUT they can be held liable if grossly negligent or failing to exercise the highest degree of care and diligence. Throughout the global supply chain, many statutes and regulations will apply directly to the importer and/or exporter, referred to as the principal parties of interest, who are distinct from the common carrier though common carriers and freight forwarders can share legal responsibility for violations.

As a best practice, the entire maritime trade community - whether they are VOCCs, NVOCCs, manufacturers, shippers, consignees, freight forwarders, insurers or other entities involved in the global trade supply chain - should employ at a minimum “reasonable care” in screening/vetting their transactions to avoid compliance problems.

In the case of drug smuggling, Customs requires carriers to exercise the “highest degree of care and diligence” and will review the totality of the facts and circumstances of each case, looking for evidence that a carrier took affirmative measures to discover narcotics on board its vessel, vehicle, or aircraft. Proactive screening of entities and commodities are a critical component of due diligence and necessary for the maritime trade community to receive relief from severe penalties, fines and forfeitures.

In summary, an effective maritime risk management program should perform due diligence for sanctions, government watchlists (including vessels), politically exposed persons, and commodity checks.

Why is Maritime Compliance Important:

1. National Security: Preventing transactions with denied parties or watch listed entities that pose a threat to national and global security. Sanctions programs such as OFAC deny malign state actors and non-state actors such as Transnational Criminal Organizations from exploiting trade and finance systems for their financial benefit.
2. Economic Security: Protecting national trade competitiveness and supporting foreign policy objectives while maintaining competitiveness in the global trade markets.
3. Global Security: Implementing effective sanction controls supports national contributions to global security – a safe international supply chain is only as effective as its weakest link and malign actors exploit those weak leaks.
4. Avoid corporate reputational damage. Companies that ignore compliance obligations are subject to criminal and severe civil penalties (see matrix below).

Regulations apply based on two core areas:

1. The entity/person, organization or destination that is involved in the commodity trade.
2. The type of commodity being traded.

What are the rules you need to adhere to: There are several compliance control rules and regulations, including the following examples:

Export Control Reform Act 2018 - 50 USC 4801-4852, Arms Export Control Act - 22 USC 2778 / International Traffic in Arms Regulations (ITAR) - 22 CFR 120-130, 18 USC 545, 18 USC 554 and more.

For a full list of regulations and statutes relevant to Maritime Trade companies, please log into our app to get access to the full Playbook.

How does BITE Help:

The BITE Playbook, available in the BITE app, helps you navigate these regulatory requirements and quickly understand which agencies enforce what regulations associated with your specific transaction as well as a mapping for how each BITE module helps you remain compliant with specific regulations.

BITE Data: our BITE Playbook maps directly to watchlists, Harmonized Schedule codes and commodity screening lists, allowing you to quickly check a commodity or person against the extensive filters in our platform.

BITE includes extensive, in-depth training modules to help users get set up for success and walk you through how to stay on the right side of compliance.

Sign up for the app here: https://app.bitedata.io/ or send us an email to set up a demo: bite@nuborders.com