With 90% of all world trade by volume and 70% by value transported by sea, the maritime sector is the backbone of international trade and a critical global industry, says monitoring and security software specialist Pole Star.
The increase in international regulations and sanction policy, the emergence of new conflict zones and the rise of piracy and terrorism worldwide means that financial organisations are increasingly exposed in this sector.
Trade finance drives around US$14 trillion in annual global commerce, and the exposures of global banks in relation to shipping and related cargoes is high on the agenda, the company reports. The consequences of sanctions breaches are serious, with many of the world’s largest banks having already been fined.
Pole Star is launching a service entitled PurpleTRAC, to address the challenges financial institutions (FIs) face. The company says that the service enables banks, commodity trading companies, marine financers and insurers to manage their exposure and mitigate the possibility of involvement with a vessel at risk of sanctions non-compliance, money laundering or terrorist financing.
PurpleTRAC employs advanced risk management and sanctions compliance technology, which automatically checks against global sanctions lists to screen vessels for compliance. These checks quickly reveal a ship and its associates’ current and past exposure to risk, enabling FIs to make prompt and informed investment decisions.
The company adds that of over 2,300 ships screened for compliance in the third quarter of 2014, around 60% returned warning alerts warranting closer investigation, while 21 ships and their associated companies were found to be either on a sanctions list or based in a comprehensively sanctioned country. Of all ships tracked via PurpleTRAC during the quarter, 21% made incursions into sanctions zones.
“The insight into a vessel’s exposure to risk that PurpleTRAC provides is crucial since sanctions and international regulatory policy grows by the day,” said Andrew Peters, chief executive officer (CEO) of Pole Star.
“No other industry has been impacted more than shipping. Financial organisations need to know and prove with whom and where they are trading. PurpleTRAC provides this certainty while simplifying and streamlining compliance procedures.”
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