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The IMB aware of the escalating level of this criminal activity, wanted to provide a free service to the seafarer and established the 24 hour IMB Piracy Reporting Centre (PRC) in Kuala Lumpur, Malaysia.
A newsletter about fraud and global asset recovery from the office of International Chamber of Commerce's FraudNet. To read about key asset recovery cases and global compliance with anti-fraud and money-laundering laws, please click in the link above for the Newsletter PDF.
CCS offers a flexible membership arrangement based on the selection of predetermined membership packages. A prospective member can elect to join one or more Bureaux according to their requirements.
Losses due to official misconduct account for a great many maritime trade incidents. Each incident can be complex and wide-ranging in nature. It is therefore unlikely that any one company will have the knowledge and resources to be able to investigate it thoroughly.
Counterfeiting and piracy are a drain on our businesses and on the global economy. It has resulted in the widespread loss of lawful employment and a massive reduction of tax revenues.
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International Maritime Bureau (IMB) launches new NVOCC Code of Conduct
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The ICC International Maritime Bureau (IMB) has established a register for Non-Vessel-Owning Common Carriers (NVOCCs). The purpose of the register is to improve anti-fraud standards and to encourage higher standards by providing a mechanism to recognise participating NVOCCs that adhere to a minimum standard of anti-fraud measures in their operations.
For the purposes of the scheme an NVOCC is defined as “a company that issues bills of lading and assumes the role of the carrier of the cargo.” Joining the IMB scheme does not relieve an NVOCC of its obligation to register its company or activities with the local authority concerned, for instance the Federal Maritime Commission (FMC). It is relevant to point out to our readers that the ICC’s and the IMB’s definition of an NVOCC is specifically ‘Non-Vessel-Owning Common Carrier’ whereas other organisations, such as the FMC, the World Shipping Council and the TT Club, define an NVOCC as a ‘Non Vessel-Operating Common Carrier’.
According to the IMB, NVOCCs issue more than 90% of all suspect bills of lading identified in its database. Suspect bills of lading are those which have false contents, including the incorrect vessel, dates, description of the cargo, container numbers or parties. They are presented to banks in order to commit fraud, money laundering, illegal capital flight and to bypass sanctions.
REGULATION IS NECESSARY
Whilst it is acknowledged that there are many NVOCCs that operate to high standards, the simple fact cannot be ignored that there are some that do not. This sector is unregulated in many countries and the standards of trade knowledge are very variable. The result has been that bills of lading are issued by them and financed by banks posing a risk of fraud or money laundering for banks.
The objective of this initiative is to impose a greater degree of accountability upon NVOCCs. It is hoped to increase the essential role played by the bill of lading. At BIFA, from the communications it regularly receives, it is clear that many people do not understand the key threefold role of a bill of lading, and in particular the potential for it to be a ‘negotiable’ document, giving the holder title to the goods. One point that Bifa has emphasised for many years, and which this latest initiative also highlights, is that information declared on a bill of lading has to be accurate. It mirrors the relevant information from the Master bill of lading issued by the physical carrier.
THE REQUIREMENTS
As stated in the opening line of this article the IMB is opening a register of NVOCCs around the world. The scheme is voluntary, but it does intend to differentiate between those traders who wish to demonstrate their expertise and those who do not. NVOCCs will be required to provide their full contact details, including physical business address and the full names of two directors (designated persons) who will assume responsibility for the NVOCC following its joining of the register.
The ICC and the IMB have written a Code of Conduct detailing acceptable business practices to be followed by NVOCCs when issuing and processing bills of lading. NVOCCs seeking registration with the IMB will be required to sign the Code of Conduct valid for one year. In addition, NVOCCs will be required to pay an administrative fee for registration. The identity of all registered NVOCCs will be published on a website administered by the IMB. It should be noted that the website will not include information on designated persons.
HOW TO BE COMPLIANT
The IMB NVOCC Register is backed by an online course designed by the IMB and run by the ICC Academy, which specialises in trade-related online training (https://icc.academy).
The agreement includes a requirement for NVOCCs to promptly answer questions from the IMB regarding a bill of lading issued. If an NVOCC is unable to satisfactorily explain a query regarding a bill of lading issued by it, or there is some evidence that the document contained false information, it will be recorded as a ‘strike’ in the IMB’s database. Two such ‘strikes’ within year will result in the NVOCC’s removal from the Register, unless it can demonstrate that it has put procedures in place to ensure that these errors are no longer repeated. Suggested corrective actions include sending staff on training courses and close monitoring of their work.
IMPROVING STANDARDS
The very broad definition of an NVOCC has to be borne in mind when taking this new proposal into consideration. In effect, any forwarder issuing a house bill of lading is likely to fall within the scope of this registration scheme and could therefore join it. Like many such voluntary schemes the registration requirements are relatively low and currently there does not appear to be a substantive mechanism to ensure compliance.
However, any scheme aiming to improve standards is to be welcomed and membership of the scheme should be regarded as indicating an NVOCC’s commitment to meet minimum acceptable standards relative to issuing essential trade documentation papers. It is hoped that this will be beneficial to the shipping and freight industry and will surely reduce potential exposures to fraudulent activity in the supply chain.
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IMB launches initiative to curb B/L fraud
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The International Maritime Bureau (IMB) has launched a new initiative aimed at curbing bills of lading (B/L) fraud carried out by non-vessel owning common carriers (NVOCCs).
The IMB NVOCC Register provides a business solution to a business problem affecting parties involved in international shipping and trade.
B/Ls are crucial documents relied upon by many stakeholders in the trading chain including banks, shipping companies, carriers and charterers.
IMB – which conducts B/L checks for its members – says while the vast majority of NVOCCs issue B/Ls correctly, there is a small minority that do not.
This could lead to fraudulent practices, and banks that unwittingly process false B/Ls could discover that either there are no cargoes underlying the documents or that the shipments may be misrepresented.
IMB says that up to 95 percent of the false B/Ls identified by the Bureau are issued by NVOCCs.
An IMB spokesman said, “Incidents of ship owners/carriers or their agents issuing false B/Ls are uncommon because they take a big risk in doing so and open themselves to legal action.
“However, unlike the carriers or their agents, the majority of NVOCCs do not have any assets which are at risk in these transactions except for their reputations.
“The NVOCC Register therefore recognises participating NVOCCs who adhere to a minimum standard of anti-fraud measures in their operations,” the IMB spokesman added.
IMB is inviting NVOCCs to sign up to its NVOCC Register. In doing so they will also have to sign up to a Code of Conduct for the issuance of B/Ls. Failure to comply with the Code of Conduct may result in removal of the NVOCC from the Register in certain circumstances.
The intention is not to exclude defaulting NVOCCs but to help them improve the steps taken to issue bills of lading which is relied upon by a number of other stakeholders.
IMB says an advantage of signing up to the Register is that banks may process the documents of NVOCCs on the Register faster than those that are not.
The IMB NVOCC Register is backed by an online course designed by the IMB and run by the ICC Academy which specialises in trade related online training (https://icc.academy/).
The IMB NVOCC Register was officially launched in Singapore last month, attended by more than 100 representatives from banks, logistics companies and trading firms.
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IMB to Tackle Bills of Lading Fraud
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The International Maritime Bureau (IMB) announced that it has launched a new initiative aiming to mitigate bills of lading (B/L) fraud conducted by non-vessel owning common carriers (NVOCCs).
The IMB NVOCC Register provides a business solution to a business problem impacting parties involved in international shipping and trade.
B/Ls are crucial documents relied upon by many stakeholders in the trading chain including banks, shipping companies, carriers and charterers.
IMB - which conducts B/L checks for its members - says while the vast majority of NVOCCs issue B/Ls correctly, there is a small minority that do not.
This could lead to fraudulent practices, and banks that unwittingly process false B/Ls could discover that either there are no cargoes underlying the documents or that the shipments may be misrepresented.
IMB’s says that up to 95 percent of the false B/Ls identified by the Bureau are issued by NVOCCs.
An IMB spokesman said, “Incidents of ship owners/carriers or their agents issuing false B/Ls are uncommon because they take a big risk in doing so and open themselves to legal action.
“However, unlike the carriers or their agents, the majority of NVOCCs do not have any assets which are at risk in these transactions except for their reputations.
“The NVOCC Register therefore recognises participating NVOCCs who adhere to a minimum standard of anti-fraud measures in their operations,” the IMB spokesman added.
IMB is inviting NVOCCs to sign up to its NVOCC Register. In doing so they will also have to sign up to a Code of Conduct for the issuance of B/Ls. Failure to comply with the Code of Conduct may result in removal of the NVOCC from the Register in certain circumstances.
The intention is not to exclude defaulting NVOCCs but to help them improve the steps taken to issue bills of lading which is relied upon by a number of other stakeholders.
IMB says an advantage of signing up to the Register is that banks may process the documents of NVOCCs on the Register faster than those that are not.
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Misuse of NVOCC Bills of Lading brings new certificate to raise industry awareness
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The ICC Academy — the educational arm of the International Chamber of Commerce (ICC) — in partnership with the International Maritime Bureau (IMB), has developed a specialised certificate for Non-Vessel Owning Common Carriers (NVOCC) Bills of Lading (B/L). Launched today in Singapore at a high-level event, hosted at Enterprise Singapore, the programme aims to raise standards and reliability of maritime trade for active NVOCCs and their trading partners operating in the global market.
IMB estimates that over 95{35784a3acc53c3fb97930ebb57e7c2f91cc4408c54cb9242c52169e2b6c96453} of issued B/L by NVOCC are incorrect. In today’s complex international environment, it is crucial that documents are not only delivered properly but also comply with the IMB’s Code of Conduct.
ICC Academy General Manager Daniel Kok said: “Bills of lading are one of the most vital documents associated with trade, making it essential that NVOCCs have the right understanding of their role. Our goal with this certificate is to provide the right knowledge and expertise that will help boost industry standards along the trading transaction chain.”
The launch event included a half-day ceremony that featured a demonstration of the certificate programme and a roundtable discussion on IMB’s NVOCC Register, which works to improve anti-fraud standards. The panel was moderated by IMB Director Pottengal Mukundan. Panelists included Steven Tan Kok Boon, Executive Director of the United Overseas Bank; Ramaprasad Perumbala, Director, Trade Finance Operations of Deutsche Bank; Baldev Bhinder, a Partner at Joseph Tan Jude Benny Law Firm; Aarthi Fernandez, Head of Global Trade at Standard Chartered Bank; and Michael Howlett, IMB Deputy Director.
Mr Mukundan — who is also the author of the certificate curriculum — said: “A bill of lading is one of the most critical elements of an international trade transaction. When the content of a bill of lading is manipulated, the risks of fraud, malpractice or money laundering increases significantly for the stakeholders relying upon it — these include banks, shipping companies and counterparty traders. It is therefore important that NVOCCs understand the key role played by the bill of lading that they issue and the need for them to accurately represent the physical shipment.”
The e-course covers everything from the basics of trade logistics and recognising the process of B/L issuance to the reliance of stakeholders on correct B/L and how the document can be misused along with its consequences. Designed for NVOCCs operating in global markets — as well as related stakeholders in banks, actual carriers, cargo owners and other general traders — the interactive programme offers case studies, structured lessons, self-assessments, models, videos and a virtual coach.
For more information on NVOCC Bills of Lading Certificate, please visit our course page and course catalogue to make a purchase.
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