Diverging sanctions raise shipping costs and spur calls for shared checks

Differences between US and EU sanctions requirements are increasing compliance risks for shipping businesses, according to Trade Finance Global, which argues that shared industry verification could help reduce duplicated work. Companies must assess which rules apply to each transaction rather than assume that satisfying one jurisdiction’s requirements will meet another’s.

The publication cites Russian-origin crude oil as an example, reporting an EU price ceiling of $44.10 a barrel against a US cap of $60. A cargo could therefore meet the US threshold while exceeding the EU limit. The broadly aligned approach taken by the US, UK and EU against Russia in 2022 no longer provides compliance teams with the same assurance of common requirements, the report says.

The challenge also extends beyond checking whether a direct customer or supplier appears on a sanctions list. Trade Finance Global says regulators increasingly expect businesses to examine ownership, control and connections to sanctioned vessels or trades. That can require scrutiny of managers, charterers, beneficial owners, banks and other intermediaries, alongside changes in vessel flags, routes or management. Existing commercial relationships need repeated review, rather than checks confined to the start of a relationship.

Those demands carry substantial costs. A Marcura report cited by the outlet estimates that onboarding and know your customer checks cost between $1,500 and $3,500 for each counterparty. Shipowners, charterers, traders, insurers and suppliers frequently repeat similar checks using separate tools and policies. Conflicting results can leave compliance staff reconciling information instead of assessing risk, while intelligence gathered by one business often remains unavailable to others.

The proposed response is a common foundation for due diligence, not a replacement for individual companies’ risk policies. Trade Finance Global suggests that verified counterparty information could accompany commercial relationships and be recognised across multiple workflows. Shared data standards and information from different participants could reduce ambiguity and improve detection of emerging risks. Each organisation would retain its own decision-making criteria, but would no longer need to recreate every verification step independently.