In May, Maersk Tankers, part of Dutch conglomerate Maersk Group—one of the largest and most established container ship operators in the world—announced that it had successfully tested the use of an unmanned aerial vehicle, commonly known as a drone, to deliver a small parcel to a tanker ship at sea. The drone was launched from a tugboat. The parcel was a small box of Danish cookies weighing less than three pounds.

While this may have been one small delivery for a company that moves millions of 20-foot-long containers per year, it represented a giant leap for compliance teams responsible for all aspects of global shipping, trade finance, and port operations.

Maersk boasted that this test flight presaged the future use of flying drones to move spare parts, medicine, mail, and other small necessities to tankers without having to dock in port or to use a barge ship to ferry supplies to the tanker. The potential cost savings are attractive: Maersk estimates that drone use can save thousands of dollars a year in barge costs per vessel, which conservatively amounts to considerable financial savings for a firm with such a large fleet.

In light of those savings and other efficiencies, it would be no surprise if use of drones by the shipping industry takes off in coming years. But as with any technological innovation, responsible industry stakeholders must keep their eyes open to the potential ways that criminals and other unscrupulous individuals could pervert the new technology for illicit purposes.

Coordination among the industry and government is critical because as the use of drones in shipping becomes commonplace and accepted, a drone buzzing the coastline will fail to draw the natural suspicions it would to today’s governmental observer—it is at that moment that bad actors can do wrong in plain sight.

Reportedly, Maersk’s test drone could fly upwards of one mile carrying a 44-pound load. Although that might not seem significant at first glance, those specifications are certainly enough to move valuable contraband. A packaged kilogram of cocaine, for example, weighs less than three pounds. Just as well, money launderers, terrorist financiers, and tax evaders could use drones to move payloads of currency. The equivalent of $1 million in 500 Euro notes—a currency note beloved by criminals and dubbed by some as “Bin Ladens”—weighs less than five pounds. Beyond narcotics, bearer instruments, and other stores of value (such as diamonds, to name one example), drones could deliver other small items that a nefarious actor may have reason to ship by non-traditional means, such as electrical components or other small parts that might be of use in weapons systems. And all of that is without mentioning the damage that a 44-pound bomb can inflict.

The prospect of drone-based ship-to-shore and ship-to-ship transport presents challenges for compliance professionals operating at various points in the global supply chain. As Maersk’s test flight proves, unmanned aerial drones can be used to bypass traditional customs and port screening. Contraband goods could be aerially ferried on and off a big tanker ship as the vessel approaches the coastline, but has not yet docked in port.

Although ship-to-ship transfers at sea are nothing new—with choice goods offloaded to smaller, nimble vessels—flying, unmanned drones could be a far more elusive mechanism, in light of their low cost, small size and portability, range, and flexibility. And to make matters worse, the drone operator would be operating remotely, potentially shielding him or her from apprehension if the drone is intercepted.

ABOUT MARTIN FONCELLO



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Martin Foncello is a managing consultant based in Exiger's New York office, where he focuses on the firm’s anti-money laundering and financial crime compliance efforts. 
Foncello joined Exiger from the New York County District Attorney’s Office, where he served from September 2005 to July 2015.  In his capacity as an assistant district attorney, Foncello practiced as both a trial and appellate attorney, litigating matters in both New York State and federal courts. As an appellate attorney, he was responsible for handling all phases of appellate and collateral litigation. He briefed and argued numerous cases before the New York State intermediate appellate courts and the New York State Court of Appeals, the state’s high court. He also argued cases before the U.S. Court of Appeals for the Second Circuit and U.S. District Court for the Southern District of New York. In addition, Foncello was a designated liaison to a trial bureau, where he regularly provided advice to executives, trial attorneys, and investigators on a variety of legal matters, including privacy issues, privilege, legal ethics, and asset forfeiture.   
Foncello was also an Adjunct Professor in the Legal Research and Writing Program at Seton Hall University School of Law from August 2008 to May 2009.

Maersk has made a valuable stride forward for the shipping industry, and this piece is not meant to be alarmist. But this breakthrough comes with a need for vigilance: Stakeholders involved in facilitating international trade—from shippers and port operators, to government agencies responsible for homeland and aviation security, to banks that finance trade and are vulnerable to money laundering and terrorist financing—must remain vigilant and focus on immediately developing guidelines for the responsible use of drones as an adjunct to the shipping trade. In particular, the industry must engage with governmental bodies responsible for patrolling the port and coastline and, ideally, work together to balance the need for security with the benefits of innovation.

To mitigate customs and port operations risk, guidelines need to be developed as quickly as possible to address issues such as designating launching points from which port operators could control the flow of drones and customs officials could screen payloads; approving certain drone models to control flight range and payload capacity; and issuing licensing standards and accreditation for drone operators to ensure minimum standards of competence and responsibility.

Additionally, trade finance banks must develop guidelines for due diligence and monitoring of shipping companies and drone operators who will employ this new technology. Coordination among the industry and government is critical because as the use of drones in shipping becomes commonplace and accepted, a drone buzzing the coastline will fail to draw the natural suspicions it would to today’s governmental observer—it is at that moment that bad actors can do wrong in plain sight. 

In short, if legitimate industry has now recognized the benefits of such new technology, be sure that the unscrupulous have as well. Let’s be prepared.

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