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As the Russian war effort directed against Ukraine continues, the latest round of sanctions forces shippers, cargo operators, corporates, banks and insurers to reevaluate their compliance programs to align with global regulation.

To date, the European Union has imposed seven packages of sanctions against Russia and Belarus, including targeted restrictive measures, economic sanctions and diplomatic actions. Regulators across North America, parts of Asia and the United Kingdom have implemented similar sanctions, all in an attempt to hinder Russia's war effort.

The gradual rollout of stringent sanctions targeted at Russia has led to an increase in illicit trade behaviours, including dark shipping activity, vessel flag falsification and illicit goods' movements.

Our August update white paper will provide insight on the most recent coverage, including:

• Vessel activity in high-risk areas and illicit shipping practices
• Suspected theft of Ukrainian grain by Russian and Syrian bulk carriers
• Russian oil movements
• Russian supply chain activity and trends
• Dual-use goods and commodities of concern.

Key Takeaways

• As of 25 July there are 414 vessels in the Crimea Joint War Committee (JWC) high-risk zone, an increase from the 373 vessels seen on 11 April
• Of the 414 vessels, 109 vessels have been 'dark' for 7 days or more
• From March to June there has been an increase of over 2,000 vessels going dark globally, with the associated average dark time decreasing. During the same time period, there was an approximately 25% increase in vessels engaging in a potential port call whilst dark
• Multiple Russian and Syrian bulkers have been dark in areas close to Kerch and Sevastopol in Crimea, after being identified by the U.S. and Ukrainian governments as vessels illicitly carrying stolen grain to Turkey, Syria and parts of Africa
• As of 25 July, there are 100 tankers that have loaded crude oil from Russian ports with 77.5M barrels of oil on the water. This is an increase from the previously reported 94 vessels loaded with 75.4M barrels of oil on 10 May
• Although India and China remain key importers of Russian oil, the remaining countries making up the top five importers are Italy, Turkey and Netherlands
• In the last 3 months, Italy has been the third largest importer of Russian oil behind China and India, receiving on average 700,000 barrels a day
• As of 25 July, 22 bulker vessels registered to Greece are in transit from Russia to China, India, Italy, Turkey and Netherlands. In the last 5 months there has been a 150% increase in the number of Greek, Maltese and Cypriot vessel operators carrying Russian oil
• Customs data for trade with Russia in May 2022, shows that China remains a key trading partner. There has been an increase in the value of goods traded month on month for the previous two quarters. Mineral Fuels and oils (HS Chapter 27) accounted for over 77% of total value of traded goods in May 2022. There were large notable increases in the month-to-month changes in value of goods being exported from Russia to Switzerland, Ivory Coast, Panama, South Africa and Argentina
• The U.S. Bureau of Industry and Security (BIS) and Financial Crime Enforcement Network (FinCEN) released a joint advisory on 28 June, reiterating the need for vigilance in regard to the shipment of certain 'commodities of concern'. Many of the commodities listed in the BIS and FinCEN document are being exported directly to Russia from countries such as China, India, Turkey, Vietnam, South Korea and Japan

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Click here to download the first paper published in May 2022.

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Posted 11 August 2022 by Ravi Amin, Trade Compliance Subject Matter Expert, Maritime, Trade & Supply Chain, S&P Global Market Intelligence

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.