A merican Club Circular No . 2 0/ 20 1 MAY 15, 2020 CIRCULAR NO. 20/20 TO MEMBERS OF THE ASSOCIATION Dear Member: VESSEL MONITORING AND P&I INSURANCE Background In line with their legal and regulatory obligations, all clubs in the International Group maintain sophisticated sanctions compliance programs and procedures. The rules and procedures developed by clubs to manage sanctions risks take account of the guidance provided by bodies such as the UN Security Council (UNSC), the UK Office of Financial Sanctions Implementation (OFSI), the US State Department and the US Office of Foreign Assets Control (OFAC). Through their systems of circulars and news alerts, clubs also seek to keep their members up to date on recent developments with respect to sanctions. The ability to track vessels using their AIS (Automatic Identification System) signals has become an increasingly important part of clubs’ sanctions compliance programs. All International Group clubs have now agreed a common minimum standard of tracking. Review of vessel tracking software In order to ensure that clubs were fully aware of capabilities of the products available in this fastdeveloping area, a working group carried out in-depth discussions with service providers to better understand the technology available to monitor vessel movements in high risk areas. These products were subsequently trialed against the software currently utilized by clubs. All Group clubs have now entered into agreements with commercial providers to track the movements of their entered vessels. Introduction of a common standard for vessel tracking All clubs share the common goals of ensuring their members are aware of the sanctions framework in which they operate and that their members’ vessels are not traded in violation of applicable sanctions. The agreed common minimum standard of vessel tracking in high risk areas helps to identify activities such as port calls in sanctioned countries, abnormal navigation, manipulation and/or switching off a vessel’s AIS transmitter, and STS operations in high risk areas. P&I clubs can use the information received from the tracking provider to reach out to members to ensure that they are fully aware of the sanctions which may impact on their trading patterns and the due diligence steps that can be taken to ensure no sanctions are violated. The information can also be used to mitigate the risk of the club inadvertently providing cover to a vessel which is violating sanctions. A merican Club Circular No. 2 0 / 20 2 Limitations of AIS tracking As highlighted in Club Circular No. 03/19 of January 11, 2019, an indicator of potential evasion activity is when a vessel inexplicably diverts course or ceases to transmit its AIS signal. However, routine monitoring of a vessel’s AIS transmissions is not a complete answer when it comes to identifying potential evasion activity. A suggestion that a vessel may be “going dark”, be engaged in “dark activity” or having its AIS “turned off”, simply because no signal is received, can be misleading. This is because there are several possible reasons why no AIS signal may be received. For example: 1. The issue may not be on the vessel but with the receipt of the AIS signal, particularly in areas of high-density traffic. This is a common problem. 2. Different commercial providers use different AIS receivers and so just because one provider shows no AIS signal being received, another service may evidence an AIS signal being successfully tr