I 

118TH CONGRESS 

1ST SESSION H. R. 6365 

To protect against illicit oil shipments, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 13, 2023 

Ms. WATERS introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To protect against illicit oil shipments, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stopping Illicit Oil 

5 Shipments Act of 2023’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) When countries are designated under eco9 nomic and trade sanctions by the United States and 

10 its allies, they are largely excluded from the licit 

11 global financial system, including the movement, 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
2 

•HR 6365 IH

1 sale, and profit derived from their oil and gas re2 sources. 

3 (2) For U.S. persons, U.S. maritime sanctions, 

4 including on nations like Iran, Russia, and North 

5 Korea, restrict the financing of vessels and cargo, 

6 insurance and re-insurance, companies using vessels 

7 to transport their goods, shipowners, charterers, and 

8 those providing maritime services such as classifica9 tion and certification. 

10 (3) One method by which Iran and Russia fre11 quently attempt to evade these U.S. sanctions on oil 

12 is to ‘‘false flag’’, which means to avoid sanctions 

13 scrutiny by registering a vessel in a permissive coun14 try or by sailing under another country’s flag with15 out communicating this to the country whose flag is 

16 being used. 

17 (4) According to Foreign Policy, approximately 

18 two million barrels of oil from sanctioned countries, 

19 including Iran and Russia, are transported under 

20 false flags every day. 

21 (5) In order to evade a sanctions regime, ves22 sels transporting oil and gas resources from sanc23 tioned countries must carry insurance policies to 

24 allow them to dock at a port, unload their goods, or 

25 use a port’s services, such as refueling. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
3 

•HR 6365 IH

1 (6) The veracity of a vessel’s flag is subject to 

2 examination by port authorities, but verification by 

3 the port and service providers does not always occur. 

4 (7) Given the lack of comprehensive checks on 

5 the veracity of flags, this Act will force a change in 

6 behavior within the maritime shipping industry by 

7 limiting the availability of insurance products to 

8 those not verifying flag registration and providing a 

9 direct route for the Office of Foreign Assets Control 

10 (‘‘OFAC’’) to gain possibly actionable information 

11 that could lead to OFAC enforcement actions as well 

12 as additional targets for sanctions designations. 

13 SEC. 3. MATERIAL MISREPRESENTATION. 

14 (a) IN GENERAL.—In maritime insurance contracts, 

15 failure to verify a vessel’s registration shall be deemed a 

16 material misrepresentation by the policyholder. 

17 (b) RULEMAKING.—The Undersecretary for Ter18 rorism and Financial Crimes shall issue rules to carry out 

19 this section. 

20 SEC. 4. IDENTIFICATION OF VESSELS WITH ILLICIT MARI21 TIME INSURANCE. 

22 (a) IN GENERAL.—The primary insurance regulatory 

23 authority of a State may report to the Undersecretary for 

24 Terrorism and Financial Crimes when, in the sole discre25 tion of the primary insurance regulatory authority, the 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
4 

•HR 6365 IH

1 primary insurance regulatory authority has determined 

2 that the conditions exist for a maritime insurance contract 

3 to be voidable pursuant to section 3. 

4 (b) LIMITATIONS.—With respect to a maritime insur5 ance contract, a report may only be made under subsection 

6 (a) if the primary insurance regulatory authority— 

7 (1) establishes that the maritime insurance con8 tract has been issued by an insurer subject to the 

9 authority of the primary insurance regulatory au10 thority; 

11 (2) establishes that the maritime insurance con12 tract satisfies the conditions established by the Un13 dersecretary for Terrorism and Financial Crimes to 

14 be voidable pursuant to section 3; and 

15 (3) possesses, to the satisfaction of the primary 

16 insurance regulatory authority, clear and compelling 

17 credible factual evidence that a policyholder has 

18 failed to verify the registration of a vessel. 

19 SEC. 5. REPORT. 

20 (a) IN GENERAL.—Not later than the end of the 180- 

21 day period beginning on the date of the enactment of this 

22 Act, and annually thereafter for 5 years, the Secretary of 

23 the Treasury shall issue a report to the appropriate com24 mittees of the Congress— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
5 

•HR 6365 IH

1 (1) detailing any reports received by the Under2 secretary for Terrorism and Financial Crimes from 

3 a primary insurance regulatory authority under sec4 tion 4; 

5 (2) detailing any steps taken by the Secretary 

6 of the Treasury on the receipt of that information; 

7 (3) describing of activities taken by the Sec8 retary of the Treasury, including meetings and 

9 advisories, to engage with the maritime community, 

10 foreign governments, and civil society to improve 

11 outreach and understanding of the compliance ex12 pectations related to maritime sanctions evasion; and 

13 (4) describing any proposed improvements to 

14 existing authorities or resources that could be pro15 vided by Congress. 

16 (b) EXCEPTION FOR ONGOING INVESTIGATIONS.— 

17 The Secretary of the Treasury may not include informa18 tion in a report required under subsection (a) related to 

19 ongoing investigations. 

20 SEC. 6. REPORT. 

21 Not later than the end of the 180-day period begin22 ning on the date of the enactment of this Act, the Sec23 retary of the Treasury shall issue a report to the appro24 priate committees of the Congress containing rec25 ommendations for receiving determinations described 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
6 

•HR 6365 IH

1 under section 4 from persons other than a primary insur2 ance regulatory authority of a State, including estab3 lishing a whistleblower program. 

4 SEC. 7. DEFINITIONS. 

5 In this Act: 

6 (1) APPROPRIATE COMMITTEES OF THE CON7 GRESS.—The term ‘‘appropriate committees of the 

8 Congress’’ means the Committee on Financial Serv9 ices of the House of Representatives and the Com10 mittee on Banking, Housing, and Urban Affairs of 

11 the Senate. 

12 (2) MARITIME INSURANCE.—The term ‘‘mari13 time insurance’’— 

14 (A) means insurance coverage for physical 

15 loss or damage of vessels, cargo, terminals, and 

16 any transport by which the cargo is transferred, 

17 acquired, or held between the points of origin 

18 and the final destination; and 

19 (B) includes cargo insurance, freight insur20 ance, hull insurance, and protection and indem21 nity. 

22 (3) REGISTRATION.—The term ‘‘registration’’ 

23 means the process— 

24 (A) by which a vessel is formally recog25 nized by a country’s maritime authority, resultVerDate Sep 11 2014 01:41 Nov 14, 2023 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6365.IH H6365

kjohnson on DSK7ZCZBW3PROD with $$_JOB
7 

•HR 6365 IH

1 ing in the vessel’s inclusion in the national ves2 sel registry; 

3 (B) conferring upon a vessel the nation4 ality of the registering state; 

5 (C) entailing the right to fly the flag of 

6 such registering state; and 

7 (D) subjecting a vessel to the responsibility 

8 to adhere to maritime laws and regulations en9 forced by such registering state. 

10 (4) STATE.—The term ‘‘State’’ means any of 

11 the several States, the District of Columbia, a terri12 tory of the United States, an Indian Tribe, and a ju13 risdiction subject to the Compact of Free Associa14 tion Act of 2003. 

15 (5) VESSEL.—The term ‘‘vessel’’ has the mean16 ing given such term in section 3 of title 1, United 

17 States Code. 

Æ 


kjohnson on DSK7ZCZBW3PROD with $$_JOB