“The shipping industry is under a magnifying glass like never before,” says Greg Pinn, Windward’s Director of Data Strategy and Partnerships. “The Russian economy is heavily based on shipping out raw commodities – such as oil, grain, and metals – so there is pressure to constantly move large amounts of cargo:
But with sanctions and trade restrictions in place following Russia’s invasion of Ukraine, maritime organizations caught collaborating with sanctioned entities risk severe reputational damage, loss of revenue, and regulatory enforcement actions.”
As global trade risk has evolved, understanding and appraising risk has moved beyond evaluating vessels and their ownership, and now includes counterparties: shipping organizations, companies that manufacture the physical containers, port operators, rail or trucking companies, the truck drivers, and ship crews.
There is a great deal of complexity involved in counterparty due diligence for the huge network of individuals and entities involved in maritime trade. But in the current climate, even inadvertently working with a third-party involved in trade-based sanctions evasion or money laundering could have massive consequences.
The shipping industry is a key player in the fight against money laundering and financial crime. Over the last decade, there have been numerous cases of humans trafficked across oceans in shipping containers as part of both human smuggling operations and kidnapping for sexual slavery. Movements of counterfeit goods and medicine have caused countless deaths across the world, from goods ranging from tea to medicine. Beyond being essential for meeting legal and regulatory requirements, proper maritime due diligence can have a huge impact on the lives of the victims of these crimes.
Current Counterparty Due Diligence Technology
Many maritime organizations are using a separate capability or tool for counterparty due diligence. This can be costly: there’s the capital expense in purchasing such a tool, as well as operational costs in training analysts on multiple applications for due diligence. Many current counterparty due diligence capabilities are not continuously updated – which is critical due to the Russian invasion and constantly evolving sanctions and trade restrictions – and many do not offer the depth of information that is required to obtain a complete picture.
These issues can cause maritime organizations to switch from tool to tool, increasing costs and risk in training, testing, and supporting new tools. Additionally, a lack of integration between the counterparty due diligence technology and digital maritime platform can lead to data disparities, false positives, a failure to receive updates on time and other problems.
Integrated Counterparty Due Diligence Capability
Windward launched its Non-Maritime Counterparty Due Diligence (CDD) capability to enable customers to complete their due-diligence process with full third-party screenings, based on LexisNexis Risk Solutions’ Firco Compliance Link solution. This partnership enables smarter business decisions, reduces overall costs, and simplifies investigation workflows.
“LexisNexis Risk Solutions’ (LNRS) rich sanctions data adds tremendous value to Windward’s tracking and intuitive API,” says Siar Khoreishi, LNRS’ Business Development Manager for the EMEA region. “By offering a single-point, one-stop-shop for counterparty due diligence, Windward will better serve its customers, especially during this difficult period. Additionally, LNRS will expose maritime organizations to the depth of our data.”
Users can now screen both maritime and non-maritime individuals and entities directly from the Windward platform for:
- Global sanctions
- Watchlists
- Politically Exposed Persons (PEPs)
- Adverse media
Investigations will always run against the most up-to-date data provided by LNRS. “This partnership will enable customers to better manage risk by centralizing screening, which will improve the speed of investigations and lower their costs,” according to Siar.
The Future
“Risk mitigation and the need for due diligence never moves backwards,” notes Greg. “Regardless of what happens with the Russian invasion, the global regulatory community will continue to demand that vendors avoid engaging with terrorists, corrupt oligarchs and despots, as well as checking to see if vendors are performing due diligence even on seemingly innocuous third parties.”
“Windward employees are great, they are always active and supportive,” says Siar. “We’ve had great discussions and we are looking forward to discussing future opportunities.”
For more information on this partnership and technology, please contact us.
