The Maritime Lexicon

The maritime domain is a highly technical space and it can be difficult to master the subtleties of the field. With this in mind, we’ve created this maritime lexicon to help you get acquainted with the ins and outs of maritime risk and decipher some important terms and vocabulary.

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AIS Gaps

AIS gaps is a term referring to a period of time when signals from an AIS transponder are not received and the vessel’s movements and position are unknown.

Automatic Identification Systems (AIS)

Automatic identification system (AIS) transponders transmit a ship’s position, identification number, and accompanying details about the ship.

BOL (Bill of Lading)

A legally binding document between a shipper and carrier that details all the information needed to process a freight shipment. In trade finance, banks need to verify and confirm if the BOL is legitimate.

Complex Ship Ownership or Management

OFAC Definition (Guidance to Address Illicit Shipping and Sanctions Evasion Practices); Global shipping is inherently complex and involves multiple interactions with both government and private sector entities. Bad actors attempt to take advantage of this complexity through the use of complex business structures, including those involving shell companies and/or multiple levels of ownership and management,…

Counterparty Risk

Counterparty risk is a term that refers to the probability of the other party involved in a financial transaction such as a derivative trade may not fulfill its part of the deal default on contractual obligations. The risk applies to all sided involved in the transaction. It is set according to factors such as prevailing…

Dark Activity

This term refers to the situation in which a vessel’s AIS transmission signals are no longer being broadcasted or detected.

Deceptive Shipping Practices

Deceptive shipping practices are usually used to evade sanctions.

Deep Dark Activity

This term, coined by Windward, refers to vessels that conduct long periods of dark activity in correlation with vessel behavior.

ETA Prediction

The estimated time of arrival (ETA) is the time when a ship, vehicle, aircraft, cargo, emergency service, or person is expected to arrive at a certain place. ETA Prediction refers to the ability to forecast the time of arrival based on different prediction models. Windward had developed an ETA prediction model that enables to accurately…

Enhanced Due Diligence (EDD)

Enhanced due diligence is a process where deep stringent investigative and analytical measures are adopted in comparison to CDD. This usually takes place when the individuals or organizations involved in the business are perceived to present a higher than normal risk level. It is a way of enhancing protections by pursuing additional checks and widening…

Financial Crime Risk

Fraud, corruption, money laundering, and sanctions violations are all examples of risks that have the potential to cause financial and reputational damage to organizations.

Flag of Convenience

This term refers to flags other than the one belonging to a ship owner’s flag state. Owners will often register with a flag of convenience to take advantage of lower taxes, reduced regulation, or administrative fees.

Flag Hopping

Flag hopping was defined by OFAC as “repeatedly registering with new flag states to avoid detection.” But registration changes are also commonly used as a financial tactic, meaning that malicious flag hopping is well-concealed in a sea of legitimate flag hopping. 

GNSS (Global Navigation Satellite Systems)

GNSS (Global Navigation Satellite Systems) is a term refers to a group of satellites that transmit positioning and timing data to GNSS receivers.

Insolvency Risk

The likelihood that a company will be unable to meet its debt obligations and therefore bankrupts. Insolvency risk is a measurement representing the probability of a company becoming insolvent as a result of its inability to service its debt. Investors often consider a firm’s insolvency risk prior to making equity or bond investment decisions. Firms…

Just In Time (JIT)

In transportation and freight, JIT refers to an inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered just in time. Developed by the auto…

KYV™ (Know Your Vessel)

KYV is a term coined by Windward to describe the process of vetting vessels for sanctions risk.

List Screening

Organizations use list screening tools to vet customers against sanctions, watchlists, politically exposed persons (PEPs) and adverse media lists.

Maritime Artificial Intelligence (AI)

Maritime AI is a term for machine learning models uniquely attuned to maritime nuances and data.

OFAC (Office of Foreign Assets Control) Advisories

The OFAC (Office of Foreign Assets Control) advisories aim to help enforce economic and trade sanctions against certain regimes, sectors, entities, or individuals.

Oil Smuggling

Oil smuggling is a tactic that sanction evaders use to turn a profit from oil exports that U.S. sanctions designate as illicit.

Physical Alteration of Vessel Identification

According to the OFAC Definition (Guidance to Address Illicit Shipping and Sanctions Evasion Practices): Passenger ships of 100 Gross Tonnage (GT) and upwards and cargo ships of 300 GT and upwards are required to display their name and IMO number in a visible location on the vessel’s hull or superstructure. A vessel’s IMO number is…

SDN List

The SDN (Specially Designated Nationals And Blocked Persons) list is OFAC’s list of individuals and companies whose assets are blocked and U.S. persons are generally prohibited from dealing with.

Ship-to-Ship (STS) Meetings

When two ships meet at sea. The encounter might be for fueling, transshipments of cargo such as oil or fish, to change crew, let a pilot on board, and more.

Three Lines of Defense

Three Lines of Defense is an effective internal auditing model designed to offer a framework for improved control across an organization by developing a greater understanding of the risks and controls. This identifies and articulates the collection of risks and controls, and appropriately allocates the ownership and performance to these across various ‘lines of defense’,…

UBO (Ultimate Beneficial Owner)

UBO (Ultimate Beneficial Owner) is a term referring to the entity or entities that ultimately have financial gain from a given transaction.

UN Panel of Experts

The Panel was established in 2009 to conduct sanctions assessments and recommendations for the Security Council.

Voyage Irregularities

The OFAC Definition (Guidance to Address Illicit Shipping and Sanctions Evasion Practices) Malign actors may attempt to disguise the ultimate destination or origin of cargo or recipients by using indirect routing, unscheduled detours, or transit or transshipment of cargo through third countries. Although transit and transshipment are common in the global movement of goods, private…

Zombie Vessels

Zombie vessels are vessels that were scrapped yet ‘reappear’ somewhere later on.