Simon Ring, Pole Star’s Global Head of Financial Markets Compliance, provides an overview of the maritime industry over the course of 2020, and outlines what we might expect to see in the future.


Today, a year into the global Covid-19 pandemic, we can say with absolute certainty that the importance of the maritime industry, as well as its digitisation, cannot be underestimated. At a time when the smooth running of supply chains is more important than ever, understanding routes and details of vessels is no longer optional. However, this is easier said than done, and time is running out for those who shirk away from regulatory guidance and technological advancements.


A brief recap of 2020

2020 has been called unprecedented for a number of reasons, most prominently Covid-19. However, the regulatory firsts that have emerged have the potential to change the maritime industry forever.

A regulatory revolution

It’s common knowledge that approximately 90% of world trade travels by sea, 70% of which is in containerised cargo. The supply chains that underpin this are gargantuan and while it took regulators time to shift their focus from primarily financial institutions, the past two years have shown that nobody in this industry who is engaging in illicit practices, or using shortcuts in their compliance processes, is safe.

Last year, OFAC and OFSI released guidance targeted at the maritime industry, comprehensively expanding the regulatory focus and placing firmly in the sights of the US and international regulators all maritime industry stakeholders including ship owners, operators, managers, charterers, brokers, flags, ports, shippers, freight forwarders, commodity traders, insurers and financial institutions.

With a large number of daily transactions needed to support the maritime industry and associated supply chains, there is a lot to track. Basic vessel screening no longer provides the level of detail needed to show best efforts in compliance. Now, understanding a vessel’s trading patterns, ownership and management are essential, along with examining all associated parties as well as countries of origin, domicile and control.

There has never been a greater emphasis on monitoring both historic and current AIS transmissions. It is now basic due diligence to ensure continuous transmission of AIS, alongside monitoring of potential manipulation and route deviations. Moreover, the importance of focussing on IMO numbers, as the sole unique identifier of vessels, over vessel names is finally being reinforced. Prior to engaging in STS transfers, which are also now under scrutiny due to repeated use by sanctioned countries, AIS transmissions, vessel names, and IMO numbers are key elements that should be inspected and reviewed repeatedly.


A new battle for maritime: De-carbonisation

The tail end of 2020 saw the International Maritime Organisation (IMO) agree on the first carbon emission reduction measures for the world fleet. Between 2012-18, demand for shipping grew twice as quickly as fuel efficiency improved and, with maritime transportation underpinning global trade and moving 90% of traded goods across the globe, emissions from shipping showed no signs of slowing down without drastic measures taken by regulatory bodies.

Now, the IMO’s target is to improve carbon intensity across the industry by 40% before 2030. The result? Ship owners must improve their vessels’ environmental impact by 2023 or adopt a power limitation to comply with new measures. Emissions will be monitored by rating ships for their fuel efficiency, and owners will follow operational efficiency management plans, with compliance checks occurring after the first year.

Going forward, these positive de-carbonisation trends call for greater transparency across the industry to provide regulatory bodies, as well as all members of the supply chain, with visibility of all the details of vessels they are associating with.

It is becoming increasingly important for organisations to utilise this transparency to integrate environmental, social and governance (ESG) policies into their operational and financial decision-making processes. With ESG performance also beginning to impact shipping companies’ ability to access financing, the opportunity has emerged to access innovative trade finance programmes that provide a direct link between financing terms and ESG performance.


The digitisation race

The road to digitisation for maritime-based trade has been a long one, but now with the pressure of the global pandemic accentuating the problems with the industry’s outdated processes, the rate of digital adoption has rapidly increased.

Previously, shipping and trade have been rooted in outdated, paper-based processes, creating potential points of failure at every data entry point, caused by human error or illicit manipulation. As such, corporates have been left challenged by procedural inefficiencies, little transparency, and a lack of automation across the supply chain.

Today, the industry is beginning to understand the impact that digitisation could have on its systems, with the elimination of paper from the processing of trade finance transactions having the potential to reduce output times by two hours per transaction. And, when combined with the appropriate application of technology to compliance processes, compliance costs could be cut by 30% or more.

With blockchain and trade platforms leading the way, maritime trade activities can now be connected from start to finish, across all parties involved in every transaction. The industry has developed several new applications using these technologies in the past year, alongside the formation of new technology partnerships and across-industry information sharing.

By incorporating distributed ledger technology (DLT) into a trade finance transaction, all involved parties, including banks, shippers, and importers can add information to a single unchangeable digital document, that will instantly be updated and visible to all those with access. By reducing the need for intermediaries, ensuring that information is immutable, and providing a tamper-proof audit trail, DLT is ideal for interconnecting those involved in global trade.

With information as easily shareable and accessible as this, knowing your customer and remaining compliant has never been easier and, consequently, international regulators have never been more unforgiving.


So, what does the future hold for maritime?

Ensuring that proper due diligence and risk management processes are in place has never been more important, as strict global sanctions regimes show no sign of letting up amidst the current climate.

With the right technology, activities can be linked end to end across all parties involved in every transaction. Blockchain and trade platforms are frontrunners in the trade finance digitisation race. To this end, Pole Star partnered with global trade finance technology provider TradeIX to bring our PurpleTRAC regulatory technologies to the Marco Polo Network, providing a single point solution for automated vessel sanctions screening, vessel tracking, and risk management. This partnership aims to enable the streamlining of maritime transactional processes and the securing of sensitive data, and allows for an increase in transparency and visibility into global trade flows, which greatly reduces risk and creates new trigger points to finance trade and improve working capital.

The regulatory landscape in 2021 will likely hold increased complexity and a wider geographical remit. With corporate regulatory requirements likely to tighten even further, demand for more digital, joined-up compliance solutions that enable regulated institutions to manage risk more effectively will continue to grow. As such, we’ve been adding a range of new features to PurpleTRAC, including a bill of lading verification tool, enabling customers to significantly extend their sanctions risk and compliance investigations. We’ve also combined PurpleTRAC with our Maritime Domain Awareness (MDA) solution to offer users the highest possible visibility of their marine assets.

Finally, technology continues to evolve, playing an increasingly important role in keeping institutions on the right side of regulators as well as tackling other large-scale issues impacting the maritime industry, including managing CO2 emissions.

While regulatory technologies will never replace human beings, they can and will become pivotal in supporting them in a constantly changing world.



From enabling the global movement of essential supplies to supporting the delivery of food, medical supplies and healthcare equipment, the maritime trade industry is a key component of the global infrastructure. Without the efficient and continuous running of the global supply chain, the implications of our current situation could be far more severe.

Despite an unprecedented year, the drive for automation, unification, and transparency across the maritime industry will allow for greater efficiencies and cost savings, alongside a reduction in risk and sanctions related exposures, benefiting all actors and players in the global supply chains.