Industry Circular No. 6 of 2018 - Sanctions Risks Related to North Korea's Shipping Practices (2018)

Summary

This circular from the BVI Financial Services Commission draws attention to a US Treasury (OFAC), State Department and Coast Guard advisory on North Korea's deceptive shipping practices used to evade UN sanctions under UNSCR 1718. It is issued as a courtesy notice, not a binding rule, to raise awareness among entities exposed to sanctions risk through shipping-related business.

• Prohibited activities under UNSCR 1718: Most imports and exports to or from North Korea (DPRK), ship-to-ship transfers involving DPRK-flagged, owned, controlled or operated vessels, sanctions evasion, and port entry of UN-designated vessels.
• US advisory referenced: OFAC, US State Department and US Coast Guard advisory titled Sanctions Risks Related to North Korea's Shipping Practices, which explains deceptive shipping tactics and risk mitigation measures.
• Who should take note: Entities and persons in the Virgin Islands shipping industry and financial services industry, particularly those servicing shipping industry clients.

The Commission states the circular does not shift responsibility for sanctions awareness onto itself; the onus remains on relevant entities and persons to keep abreast of sanctions developments and comply with applicable obligations.

Key obligations

• Relevant entities and persons in the shipping and financial services industries must keep abreast of sanctions matters and comply with applicable sanctions obligations, including considering the guidance in the referenced US advisory when dealing with shipping industry clients.

Applies to

shipping industry entities and persons, financial services industry entities, particularly those providing services to persons within the shipping industry