An Analytical Look at How Sanctions Quietly Enter the Bridge
To seafarers in general, OFAC does not exist. No rating will ever come into contact with it, and few senior officers expect to deal with it on any direct basis. Sanctions exposure reaches the vessel through one person only, the Master, because his signature anchors the operational record. Sanctions enforcement properly sits with owners, charterers, brokers, and financial intermediaries, yet OFAC’s engagement reaches down to the vessel precisely because the Master’s confirmation carries operational and documentary weight. Any serious discussion on sanctions exposure at sea has to start here.
For a more in-depth look at how sanction-sensitive trades “go grey” and how crews absorb the impact of those changes, see the companion DeepDraft analysis, When Shipping Turns Grey: Life and Law Inside the Shadow Fleet:
https://thedeepdraft.com/2025/10/12/when-shipping-turns-grey-life-and-law-inside-the-shadow-fleet/
What OFAC Actually Is and How It Functions
The Office of Foreign Assets Control, commonly referred to as OFAC, is an agency within the United States Department of the Treasury. Its mandate lies in financial enforcement, shaped by U.S. foreign policy and national security objectives.
In shipping terminology, OFAC is a financial gatekeeper. It has an impact on the access to the U.S. financial system by means of such mechanisms as U.S. dollar settlements, correspondent banking, and insurance arrangements that come under U.S. jurisdiction.
Ships fall within OFAC’s purview, not because of where they sail, but because the cargoes they carry are moved through chains of payment, insurance, and services linked with that system.
This separation of physical movement and financial viability explains why OFAC has become a decisive force in modern maritime trade.
Why OFAC Applies Even Though the Ship Is Not American
A common assumption onboard is that OFAC only relates to U.S. flag vessels or to ships trading to the U.S. ports. In modern shipping, sanctions exposure follows the transactions rather than geography.
OFAC engagement arises when a voyage intersects with the U.S. financial system. This most often occurs through U.S. dollar settlements, correspondent banking, insurance or reinsurance arrangements, or commercial counterparties subject to U.S. jurisdiction. These links exist across a wide range of trades, including voyages which never approach U.S. waters.
Accordingly, a vessel may be non-U.S. flagged, non-U.S. owned, and trading entirely outside the United States and yet be within OFAC’s reach for enforcement purposes. In such cases, from OFAC’s perspective, the ship acts as one instrumentality in a financial transaction, rather than standing on its own as an object separately identified by its flag.
This transactional reach explains why grey or shadow fleet trades are still exposed, even when vessels appear compliant under flag and class.
The OFAC Lists, Their Use, and Their Limits
The most referenced OFAC tool in shipping is the SDN List – the Specially Designated Nationals and Blocked Persons List.
This list includes:
• Individuals
• Companies
• Vessels (identified by name and IMO number)
If the vessel is on the SDN list:
• Payments linked with it may be frozen
• Insurance support may collapse
• Ports can refuse services
• The commercial counterparties will exit quietly
The larger point is simpler: many sanction-risk vessels are never listed. The SDN list is a designation tool, not a safety check. Absence from the list does not reduce exposure in grey or shadow fleet trades where patterns and transaction links drive scrutiny.
OFAC Enforces Patterns, Not Paper
OFAC enforcement is less document-driven but more pattern-driven over time. Scrutiny builds when operational behavior, commercial structures, and transaction flows begin to align in ways associated with sanctions exposure.
Examples of recurring indicators include clustered AIS interruptions, repeated ship-to-ship transfers in high-risk areas, and ownership or management churn.
This approach also explains why enforcement pressure might emerge without any formal designation or listing. OFAC interest often develops retroactively once behavior across multiple voyages is considered in its entirety, rather than in isolation.
Recent enforcement actions, including the boarding of MT Clipper by U.S. authorities, illustrate this approach. Notice did not come from any one operational action but rather from cumulative indicators derived from trading behavior and service dependencies. For Masters, therefore, the importance is not in the outcome of any given case but how routine operations gain significance when patterns develop.
How Sanctions Responsibility Was Pushed to the Master
Sanctions compliance was never supposed to rest with the Master. It rests ashore with the people who structure the transactions and who have control of money and services. In practice, that responsibility has migrated down.
Today, it is the Master who is increasingly asked to sign sanctions or OFAC declarations, confirm non-association with sanctioned entities, and provide narrative assurance to shore stakeholders. The Master’s signature is operationally credible and anchors the ship’s narrative in writing.
That boundary matters: A Master can reasonably confirm the vessel’s identity, flag, and IMO number, the observable operational facts of a voyage, and the conduct of navigation and shipboard operations as instructed by the company. He can confirm that the vessel is not knowingly listed on publicly available sanctions databases at the time of checking. What he cannot reliably ascertain is whether past voyages were sanctions compliant, whether a cargo was ultimately sanctioned, or whether a transaction later fell within OFAC enforcement scope once financing routes, payment mechanisms or counterparties are examined ashore.
In practice, outright refusal to sign sanctions declarations is rarely neutral. The fixtures can be delayed, cargo windows can be lost, and commercial pressure follows shortly. That reality shapes how sanctions risk is handled onboard.
My approach is qualification, not refusal. I limit verification to shipboard records and information provided by the company and do not verify the sanctions compliance of cargo, counterparties, financing, ownership, or previous voyages. This keeps responsibility aligned with authority.
Signed by the Master based upon shipboard records and information provided by the Company.
This allows the voyage to continue while aligning responsibility with authority.
OFAC and the Shadow or Grey Fleet Connection
In practice, OFAC exposure rarely arises in isolation but most often intersects with what is described as the shadow or grey fleet. This is not a separate category of ships but a trading environment created when sanctions, banking restrictions, and insurance withdrawals disrupt the normal commercial structures that support maritime trade.
As discussed in When Shipping Turns Grey, ships do not disappear when they “go grey.” They continue operating in systems where ownership becomes opaque, documentation fragments, and verification becomes harder.
What OFAC is interested in is patterns, not appearances. It is not interested in flag, hull age, or non-Western insurance. It is interested in behaviour indicative of concealment or evasion. And those patterns often intersect with grey fleet operations, such as multiple ship-to-ship transfers, routing changes, fragmented documentation, frequent ownership or management changes.
To the Master, this means something very practical: ship-to-ship transfers, AIS handling under SOLAS, and reflagging all perfectly legitimate acts in a sanctions perspective become collectively a reason for attention. What looks from land as policy on enforcement is felt onboard as requests for clarifications and statements addressed to the Master.
The shadow or grey fleet is thus more than a political label; it is the operational context in which OFAC scrutiny most often reaches the bridge, not through overt illegality, but as a result of routine decisions within an increasingly fragmented commercial landscape.
When Operators Are Evasive
Evasiveness rather than instruction is another recurring feature in sanction-risk trades. Some operators are inefficient, others deliberately opaque.
When the company avoids direct answers or relies on generic reassurances, pushes confirmations down towards the bottom, substitutes Master declarations for internal compliance, or labels legitimate questions as commercially sensitive, that silence itself becomes information.
It does not prove illegality. However, it does materially alter the risk profile of the voyage. The Master is not required to resolve that opacity. He is entitled to recognise it and limit his exposure by restricting confirmations strictly to factual matters.
Insurance as the Main Lever of Enforcement
In practice, OFAC seldom has to take action directly. Sanctions pressure is most effectively applied via insurance withdrawal.
Once insurers step back, the consequences cascade quickly, like Ports become reluctant to provide services, agents hesitate to act, bunker suppliers disengage, and crew changes stall. As a master, this often feels sudden and unexplained. In reality, this is sanctions enforcement working exactly as designed ie. indirect, quiet, and commercially decisive.
Why Masters Feel Unprepared
There is no STCW module on OFAC enforcement, secondary sanctions, or financial jurisdiction overlap, and yet Masters are increasingly expected to make decisions on these issues with limited information and limited authority.
This is an industry-level mismatch between responsibility and capability.
• Sanctions exposure rarely announces itself clearly
• Scrutiny often arrives after patterns have formed
• Lawful operations may invite sanctions questions
• Responsibility at the Master’s level is documented
This gap is not a failure of competence but a consequence of sanctions regimes evolving faster than the frameworks that define shipboard responsibility.
Conclusion
OFAC is no maritime regulator, yet it shapes maritime reality. It reaches the ship through the Master, not the crew, and it does so through paperwork, patterns, and financial pressure rather than inspections or arrests.
Understanding what OFAC is, and just as importantly what it is not, has become part of modern command. This shift did not occur because Masters sought new responsibility but because transaction structures, declarations, and enforcement leverage gradually placed it there.
It also explains why shadow or grey fleet risk is not some abstract political label: onboard, it is experienced as a series of operational questions that arrive at the Master’s desk when patterns, opacity, or trading behaviour trigger sanctions concern.
For a deeper look at that grey space at sea, including the legal friction and human cost for crews involved, see When Shipping Turns Grey: Life and Law Inside the Shadow Fleet.
References and Further Reading
U.S. Department of the Treasury – Office of Foreign Assets Control (OFAC)
Sanctions Programs and Country Information
https://ofac.treasury.gov
OFAC – Specially Designated Nationals and Blocked Persons (SDN) List
https://sanctionssearch.ofac.treasury.gov
BIMCO – Sanctions Clauses and Guidance for Shipowners and Masters
https://www.bimco.org
UK Office of Financial Sanctions Implementation (OFSI)
Maritime Sanctions Guidance
https://www.gov.uk/ofsi
EU Sanctions Map
https://www.sanctionsmap.eu
International Group of P&I Clubs
Sanctions and Insurance Circulars
https://www.igpandi.org
Sharma, R.
When Shipping Turns Grey: Life and Law Inside the Shadow Fleet
DeepDraft, 12 October 2025
https://thedeepdraft.com/2025/10/12/when-shipping-turns-grey-life-and-law-inside-the-shadow-fleet/
The Deep Draft 
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