Triton 2025 - Magazine - Page 43
LEGAL
Sanctions Due Diligence:
Are Your Charterparties
and Bills of Lading
a Liability?
In today’s world of rapidly evolving
sanctions and global volatility, all
shipping contracts require continuous
review and constant update to ensure
protection of the interested parties and
compliance with the applicable laws
and regulations. Charterparties and bills
of lading can quickly shift from routine
paperwork to serious liabilities. If your
sanctions due diligence and compliance
framework has not been recently
updated, your business may already be
exposed to signi昀椀cant risks.
The Sanctions Mine昀椀eld:
A Rapidly Changing
Landscape
As unrest in Ukraine persists, the
European Union, United Nations, United
Kingdom, and United States, continue
to deploy sanctions with increasing
frequency and precision, particularly
with respect to Russia. Other politically
targeted countries such as Iran,
Venezuela, North Korea, and Syria
remain in sharp focus, and enforcement
actions are becoming more aggressive.
The rise of secondary sanctions, where
parties can be penalised for indirect
dealings with sanctioned entities, has
made third-party risk management a
critical issue. Even if your immediate
Article written by
Lucie Ryan, Senior
Claims Executive at
The Swedish Club
counterparties appear compliant, the
real danger often lies deeper within the
transactional chain.
Charterparties and bills of lading are
critical instruments in the allocation
of commercial responsibilities,
determining not only the parties
involved in the shipment and payment
for the transportation of goods, but also
shaping the legal exposure to potential
sanctions violations.
Charterparties: Hidden
Landmines in Plain Sight
Charterparties no longer just set out
freight rates and laytime, they now play a
pivotal role in sanctions compliance.
One major risk is the absence of
strong sanctions clauses. Many
contracts still incorporate and rely
on outdated or generic clauses,
which fail to provide adequate
protection for either charterer or
owner. It is vital that charterparties
include speci昀椀c clauses addressing
sanctions compliance warranties
from all parties, granting the owner
the right to refuse orders that could
breach sanctions, and establishing
clear mechanisms for suspension or
termination if sanctions issues arise.
Another key vulnerability is the
昀椀xture itself. Counterparties may
have ownership links to sanctioned
parties that are not immediately
apparent. Whereas owners, in
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