11 FEB 2025
“President Trump is very focused on the maritime industry,” were the words of Dan Tadros, COO of the American Club, moderating a session touching on Sanctions, at last week’s 2025 HACC NACC event, in New York.
Delegates at conference in New York were warned of strong sanctions enforcement by the US Department of Justice and extensive civil penalties.
Explaining further, Tadros said, that the new Administration is setting up three maritime desks at the White House, at OFAC – the Office of Foreign Asset Control, which is part of the US Department of the Treasury, and at the State Department.
In his introduction, Tadros also raised the possibility of conflicts between the US sanctions regime, handled through OFAC, and sanctions regimes in the United Kingdom and the European Union, “Where does that leave us?” he asked. Concluding his introduction, he said: “I feel that the Department of Justice is going to be extremely bullish under this Administration- you’re going to see many more enforcement actions across the maritime and shipping world.”
Panelist George Tsimis, previously with the American Club where he spearheaded its sanctions-related work streams and now offering his expertise through GCT Consulting, commented that: “Under Trump 1.0 [his first term] his Administration issued so many advisories, and set forth standards for due diligence…all these advisories put the shipping industry on notice – this is what we expect of you and this is how we expect you to comply…it’s no longer an excuse to say that we were not aware about how this applies to our business…it had to become your business to be aware of it.”
Tsimis cited extensive civil penalties from OFAC issued during Trump’s term vastly exceeding those issued in subsequent years, under President Biden.
Panel member David Tannenbaum, who had worked with OFAC previously, from Blackstone Compliance Services, said, “What keeps me up at night is the Department of Justice (DOJ) in Civil Liability suits, adding that the DOJ is taking 10 x or 20x the number of actions taken by OFAC. “If you think that a subpoena from OFAC is bad, wait until you get one from the FBI [Federal Bureau of Investigation],” he warned.
Citing a hypothetical tanker carrying Iranian crude oil that may be seized and then ordered to discharge its cargo, in Houston, in this example, Tannenbaum said that “these could be much more breaking to an organisation than an OFAC penalty.” OFAC can assess penalties for doing business with sanctioned entities. On the panel, Tsimis reiterated that industry participants need to have Sanctions Compliance Programs (SCP) in place, so that they can catch potential violations in advance, before being subjected to OFAC penalties.
A different aspect of sanctions, discussed in an after-lunch HACC NACC panel, concerns the interaction between the P&I Clubs, and governments – primarily the US but also the UK and EU. In this session, moderated by Washington, D.C. based Matt Thomas, a Partner at law firm Blank, Rome, top lawyers from a group of leading P&I Clubs opined on “The Interplay of Sanctions Regimes between the US, EU, and UK under the Trump Administration”.
Thomas explained that P&I Clubs have been drawn into the morass, remarking that: “Some say that the authorities have sought to “deputise” the Clubs – very much against their will.”
Panelist Gina Venezia, from the NorthStandard Club, but offering her own opinions and not those of the Club, pointed to the US move to “secondary sanctions” circa 2010- 2011, and legislation in 2012 which brought insurance companies into the list of entities that could be sanctioned, in connection with measures taken targeting trade with Iran.
She said that, around this time, “The US authorities…expected the Clubs to have an eye towards sanctions compliance of their members….and expected have provisions in their rules saying that we are not covering sanctionable activities.” Following the evolving relationship between the State Department/ OFAC, and the Clubs, she said: “They had an expectation that the Clubs would monitor…to see what the ships were doing.”
The situation became further complicated, Venezia explained, as the EU and UK developed primary sanctions regimes against Russia- initially involving pipeline deliveries, but post February 2022, when the Ukraine hostilities commenced, then targeting tankers hauling Russian oil.
“Those governments expect the P& I Clubs to be policing [their members],” with the Clubs potentially breaching sanctions if they do not enforce, “if they see their members doing something.” Matt Thomas, in his moderation, described situations where the Clubs are getting pinged from ship tracking / monitoring services and being alerted that the vessels have possibly loaded Iranian cargoes. “The Clubs clearly have to be watching 24 x 7”, he said.
Resource: Search the OFAC lists of sanctioned entities and persons