Vessels moving through the vastness of the oceans expose their counterparties to myriad risks. Ships can be involved in sanctions evasions, the trafficking of arms, narcotics, and people, and other illicit activities. To mitigate the risks of transacting with such vessels, organizations are turning to ship tracking services to assess the ship’s movements for red flags.
In this post, we will discuss the central role the Automatic identification System (AIS) plays in tracking ship movements. We will look at what happens when there are AIS Transmission Gaps, a period of time during which a vessel‘s movements are unknown. We will explain the two types of gaps – AIS Lost Signal and Dark Activity – and why only one of these constitutes a red flag. Parts Two and Three of this series will cover how to quickly filter out these false red flags during your vessel screening, and how to then investigate the high-risk gaps for potential illicit activity.
But first, let’s start with what AIS is – and what it’s not.
For the past 15 years commercial ships have relied on AIS to avoid colliding. A complementary system to radar, it enables ships to detect each other at sea and maintain a safe distance. While there are multiple types of AIS transmissions, they all report the ship’s location, bearing and speed, along with the vessel’s identifiers and voyage information.
Nowadays, all ships larger than 300 tons are required by the International Maritime Organization to transmit AIS. Originally designed for collision avoidance, AIS quickly became the main method of tracking ships worldwide: first, around ports; then along coastlines; and finally (with the introduction of commercial satellites a decade ago), everywhere.
Since its widespread adoption, many have spotted how valuable this data can be for other applications such as search and rescue, operational planning, trade analysis, accident investigation, fishing fleet monitoring, and maritime security. The latest use of AIS tracking data is to screen vessel movements for signs of illicit activity such as smuggling, trafficking, or sanctions evasions.
For example, AIS can help an organization know if a ship has traded in sanctioned goods by indicating it has visited a sanctioned country’s port(s). Banks, traders, and insurers, along with shipping companies, with the encouragement of regulators – are now incorporating this data into their risk management practices. But what happens when vessels don’t want to be found?
Curiously, AIS is mandatory in terms of regulation but voluntary in practice: a vessel (or, more accurately, those who operate it) must choose to transmit. Also, since it’s a one-way radio signal it cannot be pinged (like satcom or LRIT), which means its in/active status can’t be inspected remotely. An obvious question then is what happens when the vessel stops transmitting its location? After all, if you’re up to no good why wouldn’t you seek to conceal your activities?
Indeed, the best-known red flag for covert illicit activity is an AIS Transmission gap: a period of time when signals from an AIS transponder are not received and the vessel’s movements, therefore, are unknown. Effectively, the vessel vanishes, reappearing some time later, sometimes hundreds and thousands of miles from its last known location. Ships use them to conceal illicit activity, especially the origin and destination of cargo and ship-to-ship transfers.
These transmission gaps were explicitly cited as deceptive shipping practices in recent OFAC advisories, and in reports by the United Nations Security Council Panel of Experts on North Korea. And with good reason. “Maritime transportation,” says the Panel’s former coordinator, Hugh Griffiths, “is the principle means of transporting sanctioned commodities: arms, dual-use goods that may be used for weapons of mass destruction, oil, and illegal narcotics.”
Maritime transportation is the principle means of transporting sanctioned commodities: arms, dual-use goods that may be used for weapons of mass destruction, oil, and illegal narcotics.”- UN Panel’s former coordinator, Hugh Griffiths
But does that mean all vessels with transmission gaps should be flagged as having a high risk of illicit activity?
Unfortunately for risk management teams, the answer isn’t straightforward. AIS Transmission gaps are simple to spot. Most ship tracking services can flag them. But as we routinely hear from compliance professionals, finding gaps is not the challenge; the main problem is finding too many. For each gap they identify they need to escalate the case, to manually investigate the likelihood of the vessel making a port call in a sanctioned country, or meeting with a sanctioned entity during that time. This is a time- and labor-intensive process when dealing with a large number of ships.
To quantify the scale of the problem, the global tanker fleet comprises some 30,000 ships. Windward data found that in October 2019, half of these vessels – 15,000 ships – had transmission gaps. On average they had seven separate instances of AIS Transmission Gaps with a typical duration of eight hours.
To make matters even more frustrating, the vast majority of AIS Transmission gaps worldwide are not deliberate. The most common reason for gaps in AIS transmissions is that they are simply not detected by any sensor. This can be caused by:
We call these situations “Lost AIS Signals”. The key point to understand here is that the ship did not deliberately turn off its AIS and stop transmitting; these transmission gaps are clearly not indicative of illicit activity. A vessel that deliberately goes dark, on the other hand, has decided to stop transmitting, probably to conceal what it’s up to.
There are a few, semi-legitimate reasons why a vessel will intentionally turn off its AIS. Avoiding pirates off the Horn of Africa is one. Evading being detained by Iran in the Strait of Hormuz is another. However, vessels are unlikely to deliberately turn off their AIS transmissions unless they have a good (or very bad) reason to do so. Why? Because AIS transmissions are a basic safety protocol, created to avoid accidents at sea. If a vessel is involved in an accident while intentionally not transmitting, the resulting damage may not be covered by insurance.
In most cases, a vessel deliberately goes dark to hide illicit activity including:
So the key challenge facing compliance and Counterparty Due Diligence (CDD) teams is filtering out false red flags – lost AIS signals – so they can focus on the real troublemakers: ships with Dark Activity.
In the next article in this series, we’ll focus on three simple signals for efficiently filtering through the noise of AIS transmission data to find the real risks.