Case Study — Aug. 27, 2025
Understanding Current Risks and Opportunities in Cross Border Trade
Background
Recent geopolitical events have caused regulators, both local and international, to expand the scope and quantity of sanctioned entities and individuals. Sanctioned actors now span more than just watch-list additions and now include ships, goods, and commodities.
A constant theme within regulatory advisories published in the last 18 months has been the need for organizations to remain aware of new sanctions evasion tactics and to ensure robust controls are in place to detect such risks. This means going beyond the traditional screening processes and incorporating more sophisticated tools and content sets.
A snapshot of case studies based on regulator recommendations are outlined here as examples of S&P Global Market Intelligence applications and datasets integrated successfully with client-side risk and compliance trade screening programmes.
Vessel Owners and Relationships, Not Just Ship Movements
The maritime shadow fleet servicing Russian oil shipments has become a common term in regulator advisories and enforcement actions. Tightening continues, with OFAC (Office of Foreign Assets Control) adding over 150 oil tankers from the shadow fleet to the sanctions list in early 2025.
Challenge: Identifying relationships between vessel owners and their assets was undermined due to poor data and a lack of quality sources. Checks on ship owners were the most time-consuming compliance check. As ownership changes, it can be difficult to understand which vessels fall within a regulatory watchlist or are high-risk.
Risk: As it stands, the US OFAC sanction list includes 456 liquid tankers and 18 LPG carriers. Based on the regulations, S&P Global is able to identify 2,121 “at-risk” vessels linked to sanctioned oil, of which 1,727 remain outside of the OFAC list. Many of these vessels are relatively older and operating under flags of convenience. The review indicates that though a number of vessels are not identified as sanctioned, they could be part of future actions by the regulator.
Route to Success
- Ability to quickly see relationships between vessel owners. Options to drill-down through company names and other content to view deeper relationships and networks.
- Relationships based on subsidiaries, co-location, fleet size etc should be important factors for consideration.
- Connecting fleet owners to suspicious movement activity to paint a broader picture of associated risk.
Partner organization needed to know if a ship owner was linked to Russia via a domicile address in India. The current vendor could provide no direct relationship, but S&P Global Market Intelligence was able to provide precise information on co-location with the ownership fleet entity due to Market Intelligence’s management of the IMO Corporate Network Registry for Ships.
Track Containers, Not Just Ships
The authentication of goods is crucial when attempting to understand their origin — a bill of lading covers only the ocean liner with little detail on any potential transhipment. In a period of heightened risk due to Russian trade sanctions, understanding both reexports and transshipment are vital.
Challenge: Understanding the route of the container and the ship can sometimes be two separate challenges. Transshipment of goods can occur multiple times during a single journey, from load to the ultimate discharge port. Identifying transshipment points assists in the investigation of where goods might end up, whether they transit high-risk locations and ports, and the risk profile of any secondary ship not found on the shipping document.
Risk: Transshipment of goods has become an issue in the context of Russian trade sanctions. Many locations and countries have been identified as higher-risk for the onward shipment of common high priority goods to Russia. Examples, include Turkey, Kazakhstan, Thailand, South Korea, China, Hong Kong, and others.
Route to Success
- Compliance risk scoring based on all locations and ships involved in the movement of goods.
- Excellent coverage of shipping carriers trackand-trace route schedules for understanding container movements.
- Ability to validate a shipping document in a transaction with the individual carrier — reducing the need for specialist, costly third-party services.
Partner organisation performed a perfunctory review on bill of lading documents to understand if an enhanced due diligence check was required. Previous vendor solutions did not have the carrier/shipper scope or coverage for capturing most of the trade entering the country through customs.
Common High Priority Goods, Not Just Dual-Use
Payments for goods, where the items and commodities are known, has become more difficult to manage in the context of Russian trade sanctions. These sanctioned items cover a huge high percentage of legitimately traded goods, making it difficult for compliance teams to be sure of what is potentially in scope.
Challenge: Russian trade sanctions have increased in complexity and scope in recent years with numerous additions and updates. Remaining compliant and implementing them when appropriate is a major challenge for global businesses. Economic sanctions for Russia, are often controlled and understood by regulators at the HS Code level. This poses a challenge when having to interpret this in real-life compliance situations — i.e., what are the goods?
Risk: Current processes are subject to the operators experience of strategic trade goods which may lack overall consistency and is not easily adaptable to changing regulatory trends. Lack of expertise from trade practitioners when identifying dual-use goods while relying on manual checks may lead to unidentified true positives resulting in financial and reputational damage.
Route to Success
- Sharing of partner data, covering about 80,000 goods descriptions, allowed for a full set of testing scenarios to ensure client was satisfied with results.
- Fully documented, certified, and approved model process for identifying strategic goods.
- Point-and-click solution to determine if a commodity or goods are embargoed with the added ability to multi-screen goods from an inventory portfolio.
Partner organization required clarity on the nature of goods which they were buying on behalf of customers. Many of the goods on the balance sheet were hard to identify in terms of their end-usage and the partner organization did not have the expertise across the chemical, electronic or engineering industries to always make precise judgements.
Evaluating True Value of Goods Being Financed
Price checking, beyond a commonsense check for manifestly unusual pricing, is extremely challenging for organizations to carry out when processing trade documentation. There are multiple factors to consider; the reliability of data, trade corridors that can generate a variance in prices and conversion factors.
Challenge: There are no harmonized goods descriptions for trade transactions globally, nor is there a way to enforce this. Non-standard items, where there is unlikely to be sufficient data available, means benchmark prices are hard to come by. The availability of a usable dataset which can factor in historical pricing, seasonality, and trading patterns is important
Risk: A difficulty in identifying pricing for non-commonly traded goods and ensuring data source reliability to adjudicate price mismatches. The lack of understanding of clarity in regard to standards and acceptable practices such as INCO terms and trade lanes from where goods are transacted further compounds the risks in understanding the true and accurate price of goods.
Route to Success
- Relying on regulatory information for the entire trade data rather than on marketplace information.
- Enabling trade practitioners with a reliable AI model to translate goods descriptions to HS codes.
- Partnering with a data provider who can facilitate ‘source-of-truth’ historical data sets to understand trade patterns and seasonality of goods.
- Reliance on pricing information between trade corridors and routes rather than global, one-size pricing.
Partner organization required information on pricing data from trusted sources rather than relying on marketplace data at a global level. Pricing information provided was based on the reporting system from official trade statistic sources including customs data that covers the full HS code schema: going beyond just raw commodities but also covering manufactured items.
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