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Fraud within the Shipping / Maritime Industry

Maritime fraud appears to be on the rise (according to United Nations data).
It causes significant disruption to supply chains and can add unwanted costs to all involved.

Summary

All business owners need to be alert to fraudulent behaviour, and here are just some of the risky issues that continue to crop up in the shipping / marine world:

  • Doctored documentation (eg. fake or erroneous Letters of Credit, Letters of Indemnity, Bills of Lading, Records, etc)
  • Bunkering fraud (eg. cargo theft re the quantity / quality of the fuel on board, and the consumption by the Vessel being intentionally misstated, etc)
  • Cyber-security (eg. hacking, impersonation, blackmail, etc)
  • New counterparties (eg. unfamiliar details requiring further due diligence, unusual behaviour such as: waiving compliance with the rules / putting pressure on you to do things quickly / attempting to take action that is not commonplace within the industry, etc)

As with any other sector, you want to protect your business’ reputation, its people and the profits.

Avoid becoming a victim of fraud by taking business-critical action now, rather than later, which really could be the best way of mitigating your risks – but what does this mean?

Here are some ideas for prevention of loss planning:

  • Keeping up to date with fraudulent tactics / behaviour in the news / articles and sharing key knowledge with your entire business (at every level)
  • Having a concise set of rules / policies that all staff can easily access, with clear direction on what to do and who to contact for help
  • Having a key contact within the company to continuously ensure compliance, identify risks and develop checklists / strategies for worst-case scenarios
  • Creating a culture of good ethics, where taking the correct steps and following the code of conduct (even it takes more time and effort), is always the best thing to do

Investing in bespoke legal advice on how to strengthen the resilience of your business.

These ideas can be an effective way of trying to ensure that your organisation, is educated and prepared for the possibility of fraud.

Fraudsters go to a lot of effort to secure their gain, but if you take a bit of extra time to double check things and verify what you think you know, for example, by simply picking up the phone and making a call for clarification, this could save you significant sums in the long run.

If it is too late, and you have unfortunately already suffered loss, try to keep calm and do not delay in taking action. Please feel free to get in touch with us to discuss: your next steps, how we may be able to help with recovery of your losses and resolving this problem for you.

Conclusion

The introduction of legislative reform is a positive step forward and will bring attention to the issue at government level. Nevertheless, there is still much work to be done within the UK’s workplaces to establish a culture where individuals feel comfortable reporting wrongdoing without fear of reprisal.

Creating a workplace culture where employees feel secure in expressing their opinions and reporting any issues, not only promotes ethical behaviour within the organisation but also leads to a more enjoyable work environment that fosters growth and success for both individuals and the company.

There is still much to do in respect of whistleblowing and society’s treatment of those who do speak out, companies that are able to rise to challenges from within and learn and grow from them will see success and loyalty not only from its employees but also from consumers.

Our team of Lawyers provide a tailored resolution strategy and assist you with working towards the best outcome to meet your commercial objectives.

If you have any questions, please contact author: Victoria Hatton

Published on May 2, 2023

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