What is KYV?
Know your vessel is a concept used to describe the process of vetting a vessel to identify the risk of sanctions. Similar to know your customer (KYC) processes that protect financial organizations from facilitating financial crimes, KYV enables organizations in the financial services, commodity trading, oil and energy, and shipping sectors to manage risk at scale.
KYV enables these users to gain insights and have a far better understanding of risk exposure as it relates to ship behavior, cargo, and ownership.
Critical KYV Factors
Here are some critical factors for gauging the risk involved with a vessel/third-party shipping partner.
- Who owns the ship? – try to identify the owners and the flag the ship flies under. This isn’t always easy, considering the number of ships that fly under a flag of convenience.
- What ties does the ship owner maintain with others? – attempt to ascertain which business and political relationships your ship owner maintains. Again, due to the anonymous nature of some shipowners and shell corporations involved in shielding ownership, identifying these relationships can be difficult.
- Is the ship available? – Establish the ship’s location based on Automatic Identification System (AIS) data
- Where has the ship traveled to? Look at the ship’s manifest to see which ports it has visited and whether any of them have been sanctioned by the different governing bodies.
- Why do you need them at this time? As part of your risk assessment, you should identify your degree of need and its interplay with the level of risk you are comfortable with assuming.
In terms of quickly evaluating your relationship with a shipping partner or vessel, a process for continuous monitoring is necessary. Even a ship that passes your initial screening still needs to be watched to ensure that it doesn’t take on additional risk that is beyond your comfort zone.
What Does the KYV Solution Include?
Windward’s Know Your Vessel™ dashboard provides stakeholders with a 360-degree view of maritime risk. The platform identifies risk activities and scores each ship based on predetermined criteria.
Stakeholders can identify the level of risk associated with any ship and determine whether they are comfortable using/engaging with it.
The dashboard lists high-risk countries that the ship is associated with. It contains registry information, revealing if the boat has been sanctioned. It is possible to see whether the boat has engaged in questionable practices designed to hide its identity, such as concealing ID and location information, as well as flag hopping.
In addition, shippers can see if the ship has engaged in suspicious behaviors, including:
- Ship-to-ship (STS) meetings
- Dark activity
- Loitering activity
- Suspicious cargo
Why is KYV Important?
Trade sanctions are increasing worldwide and knowing which ships are safe to do business with is of paramount importance.
The U.S. Office of Foreign Assets Control (OFAC), United Nations Security Council (UNSC), and the Office of Financial Sanctions Implementation (OFSI) frequently put ships on a sanction watchlist, which can lead to a ship being blacklisted, seized, grounded, or destroyed.
For shippers and financial institutions, having merchandise on a sanctioned ship can lead to frozen assets, unrecoverable assets, and reputational damage.
In today’s environment, vessel screening through KYV is of paramount importance. Due diligence must be completed with every shipment to ensure that merchandise isn’t lost, sanctions are complied with, and supply chains are reliable.
How does KYV Help?
KYV includes dynamic risk scores and full visibility for any vessel. The score considers a number of factors, including:
- Deceptive shipping practices
- Ownership structures
The risk scores offer guidance for financial services, commodity trading, oil & energy, and shipping.
Why Should Financial Services Companies Use KYV?
The know your vessel concept enables financial services companies to increase the scope of their AML and compliance operations. The solution automatically identifies all links between any client and maritime entities that are either high-risk or sanctioned.
It automatically identifies deceptive shipping practices and screens against up-to-date sanction lists. Furthermore, it provides full visibility into bills of lading (BoL).
Why Should Commodities Traders Use KYV?
Commodity traders, insurers, and organizations in other sectors can mitigate risk based on instant insight into a ship’s ownership and cargo. The solution allows for faster decision-making and enables more business without risking reputations.
Why Should Oil & Energy Traders Use KYV?
The AI-driven risk assessment tools and real-time actionable insights allow energy traders to protect their reputations and stay ahead of deceptive shipping practices.
Why Should Shippers Use KYV?
Shipping companies can proactively manage the risk of their ships through KYV. Windward uses AI to leverage multiple data sources, uncovering risks for shipping companies while eliminating false positives. With Know Your Vessel, shipowners can demonstrate that their ship is compliant, enabling them to close deals faster.
What Benefits Does KYV Deliver to Financiers, Shippers, Traders, & the Oil & Energy Sector?
KYV provides full visibility into the risks associated with any ship, allowing businesses to make informed decisions regarding shipping and financing. As a result, businesses experience these benefits:
- Instant go/no-go recommendations
- 4X fewer false positives, allowing companies to work with more ships
- Reduced time spent gathering data and using manual analysis tools
- A customizable organizational risk policy
- 360-degree view of risk, with a full audit trail
- Protected reputation