Same Ship, Different Day
While it is not yet the norm，regulation and guidance in parts of Asia call for greater due diligence by financial services firms when it comes to international trade financing. Applied judiciously，such additional steps can insulate banks from financial sanctions risks (most notably from US regulators). It can also help prevent damage to their reputation – which can help keep domestic officials at bay.
Both Hong Kong and the Monetary Authority of Singapore provide general guidance relating to bank screening for controlled goods (e.g. military and/or dual-use) export control as part of a broader trade-based money laundering (TBML) prevention effort. Additionally，the Indian Banks Association has circulated similar，albeit non-public，guidance within the financial services industry there. Beyond controlled goods identification，these guidance documents also address the need to identify and rationalize the pricing of the underlying goods，and the ships' ports of call and route. They do not address the challenges of such checks，nor provide prescriptive guidance on the regulatory expectations – yet there are regulatory expectations.
While this increased level of diligence presumably has its roots in the 1MDB corruption scandal that directly touched both Hong Kong and Singapore as well as Malaysia，the pressure on governments from Abu Dhabi to Tokyo to enact similar regulatory requirements has not abated. Given the October 25，2018 Office of Foreign Assets Control (OFAC) designation of Singaporean entities involved in maritime shipments involving North Korea，and the Shipping Advisories it has issued with regard to evasive practices with regard to both the Democratic People's Republic of Korea and Syria，it would not be unreasonable to see countries require more detailed checks of trade finance transactions，in order to safeguard their reputations as trustworthy nations trying to uphold international law.
And the US?
The United States，despite having a robust export control regime for exporters，has been very explicit in saying that financial services firms have no requirements to identify dual-goods in their trade finance transactions. However，the need to identify deceptive shipping practices has been reinforced by the February 2018 Office of Foreign Assets Control (OFAC) shipping advisory about the lengths to which North Korea will go to bypass the sanctions restrictions placed on its international trade.
Is there a double standard at work? Not really.
The US aggressively prosecutes export control violations，both with administrative actions and with criminal prosecutions. Additionally，unless there a significant increase in illicit shipments of controlled goods from its ports，the United States' reputation as a trusted financial center，and the dollar's position as the most trusted，stable currency，is secure. There is no equivalent scandal (on the order of 1MDB) in the country's recent past，so there is no pressing need for a remedy to what is currently a non-existent problem.
There are three elements which financial firms can undertake to better safeguard themselves from sanctions risk: check the cargo vessel，check the goods，and check the route.
Check the Ship
The US，the United Nations and the European Union have all produced lists of cargo vessels requiring varying levels of additional scrutiny and proactive enforcement actions. So，in addition to screening the parties to a trade transaction，it would be prudent to verify that none of the involved vessels (there are sanctioned commercial aircraft，too) being used to transport the goods will expose one's institution to regulatory consequences.
Proper due diligence，however，goes beyond screening against sanctions lists. According to OFAC's North Korea shipping advisory:
North Korean-flagged merchant vessels have physically altered their vessels to obscure their identities and attempt to pass themselves off as different vessels. These physical alterations include painting over vessel names and International Martime Organization(IMO) numbers with alternate ones.
Needless to say，a cargo vessel whose name，International Maritime Organization number or radio call sign does not appear on standard international ship registries is one which should be avoided at all costs.
Check the Goods
Identifying controlled goods is extremely difficult，to say the least. The specifications are