February 17, 2016
What is a Compliance Rating exactly? A Compliance Rating (CR) is a TRACE administered due diligence report designed specifically for vessel owners. Once completed, the CR is displayed on RightShip's vessel-vetting platform. The result of the strategic partnership between TRACE and Australia-based RightShip, a provider of online maritime risk management solutions, one exciting aspect of the TRACE-RightShip CR is the value proposition for both shipowners and charterers.
Fixing a vessel on its own is a complex undertaking; on top of that, from a legal standpoint, charterers are required to conduct anti-bribery due diligence on vessels they would like to hire and on the owners of those vessels down to beneficial ownership information prior to employing the vessel. However, given market pressures and longstanding practices in the shipping industry, due diligence is frequently overlooked, rushed, or only completed post hoc, which creates significant compliance risks for charterers in the long term. Additionally, proper due diligence can be time consuming and costly for shipowners. They are repeatedly required to provide duplicative compliance information to charterers and other customers, who are more frequently asking for this type of information as a result of rising standards of anti-bribery compliance in the industry.
The TRACE-RightShip CR will address these challenges and make due diligence more accessible to the shipowning and chartering communities, saving them time and reducing their compliance costs. As Rightship is an important risk management tool widely used by charterers’ freight teams, charterers will be able to align and integrate the chartering process between the freight desk and their compliance department. Charterers’ compliance costs will be reduced because shipowners are responsible for the costs of their TRACEcertification, the due diligence review that forms the basis of the CR, which is the same payment model used in SIRE inspections. Shipowners will also benefit, as they only need to undergo this process once and then can share their due diligence report with all of their customers. As a result, charterers receive the required due diligence information they need without delay and shipowners save time and streamline operations. A win-win situation for both parties and the business community at large.
Keep an eye out for updates on this initiative later this year. For more information, please write to info@TRACEinternational.org.
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