The worldwide maritime business is experiencing a interval of heightened regulatory scrutiny as U.S. enforcement businesses intensify their response to report drug trafficking ranges. As traffickers shift their technique to focus on industrial vessels within the wake of elevated enforcement efforts, house owners, operators, charterers and insurers are confronted with new compliance issues from each a regulatory and insurance coverage perspective. On the similar time, this improve in enforcement additionally presents a chance for proactive corporations to bolster their operations, strengthen their insurability and mitigate danger via sturdy compliance measures. By means of strategic planning, complete compliance packages and skilled authorized steerage, present challenges may be became aggressive benefits.

Trump Administration’s Use of MDLEA

The size of worldwide maritime drug trafficking is immense, with international cocaine manufacturing hitting report numbers in recent times, in response to the United Nations Workplace on Medicine and Crime. The U.S. authorities’s response has been multipronged and extends past U.S. territorial waters. For instance, in November 2025, the U.S. Coast Guard (USCG) Cutter Stone reportedly set a service report by seizing 49,000 kilos of cocaine in a single deployment. This heightened interdiction marketing campaign is furthered by the Trump Administration’s present counterterrorism coverage of authorizing direct army airstrikes on suspected narco-trafficking vessels.

The Maritime Drug Legislation Enforcement Act (MDLEA) is the first federal statute prohibiting the unlawful transportation of managed substances by a vessel. Notably, the MDLEA applies past the territorial jurisdiction of the U.S. and prohibits any individual onboard a vessel topic to the jurisdiction of the U.S. – together with vessels with out nationality (stateless) or if the flag state consents or waives objection to enforcement of U.S. regulation – to knowingly or deliberately distribute, or to own with the intent to distribute, a managed substance.

In tandem with USCG regulation enforcement efforts beneath the MDLEA, the lately imposed Trump Administration counter-narcoterrorism insurance policies have resulted in a shift by traffickers from utilizing conventional small “go-fast” drug-running vessels to a essential a part of the worldwide provide chain: industrial vessels plying their commerce on the excessive seas. Packages of narcotics may be hid in prepackaged containers, reefer items, inside bulk cargoes or voids, or onboard the ship itself, both by transport corporations or terminal staff or on the ship’s exterior construction. That is illustrated by the Colombian Navy’s current discovery of greater than 200 kilograms of cocaine hidden in a service provider ship’s sea chest on the port metropolis of Buenaventura.

Authorized Dangers to Vessel House owners, Operators, Crew, Shippers and Insurers

The invention of medicine onboard a industrial vessel introduces vital authorized danger to vessel house owners, operators, crew, shippers and insurers. It might probably set off quick vessel and crew detention, which may be prolonged and very pricey for vessel house owners. Moreover, beneath the MDLEA, any vessel working on the excessive seas could change into topic to U.S. jurisdiction, exposing corporations to prosecution beneath U.S. regulation, together with the “willful blindness” doctrine, the place corporations may be charged for allegedly intentionally ignoring crimson flags associated to narcotic trafficking.

Ahead-thinking maritime corporations – and their insurers – are recognizing that complete anti-smuggling compliance packages serve a number of invaluable functions: They defend belongings, display good religion to authorities and insurers, and supply essential documentation ought to any challenge come up. By taking sensible preventive measures, equivalent to complete crew coaching and anti-trafficking insurance policies and procedures, enhanced watchkeeping and safety throughout port calls in high-risk areas, securing entry factors to susceptible areas aboard the vessel, conducting pre-departure inspections and sustaining thorough documentation of all safety protocols, corporations cannot solely cut back the chance of exploitation by trafficking networks, but in addition strengthen their insurance coverage protection positions and supply proof of aware due diligence to guard in opposition to any allegations of willful blindness.

The pre-voyage planning and crew coaching must be bolstered in mild of this final 12 months’s experiences. Acknowledging the heightened consciousness and displaying tangible coaching steps with crews and checks of recognized narco-trafficking routes present a measure of safety for disputes that may come up – each from a authorities perspective and commercially in a maritime arbitration or court docket continuing. That’s, a safety delay or drug interdiction could cause items to spoil, a vessel laycan to be missed or a vessel arrest for unrelated claims.

Tackling the Drawback When Points Come up

When incidents do happen regardless of greatest efforts, quick entry to skilled counsel is paramount. Holland & Knight’s multidisciplinary strategy combines deep maritime business data with refined white-collar protection capabilities, enabling our workforce to coordinate responses throughout a number of jurisdictions and authorized domains concurrently. Our attorneys present disaster response providers, together with coordination with native counsel worldwide, illustration in USCG and U.S. Customs and Border Safety proceedings, prison protection, liaison with flag state authorities and communication with safety and indemnity (P&I) insurers.

Holland & Knight attorneys additionally conduct pre-incident inside evaluations that assist shoppers assess the effectiveness of their compliance program, establish any vulnerabilities and implement remedial measures whereas defending the corporate’s pursuits and sustaining attorney-client privilege. This complete help helps shoppers navigate incidents and investigations effectively whereas preserving their enterprise operations and status.

As enforcement actions proceed to evolve, maritime corporations that proactively put money into sturdy compliance measures and keep relationships with skilled counsel will likely be greatest positioned to navigate challenges efficiently, defend their belongings and personnel, and keep their aggressive standing within the international market.

When you’ve got questions, please contact one of many authors or one other member of Holland & Knight’s Maritime Workforce.

Info contained on this alert is for the overall schooling and data of our readers. It’s not designed to be, and shouldn’t be used as, the only real supply of data when analyzing and resolving a authorized downside, and it shouldn’t be substituted for authorized recommendation, which depends on a particular factual evaluation. Furthermore, the legal guidelines of every jurisdiction are completely different and are continuously altering. This info will not be supposed to create, and receipt of it doesn’t represent, an attorney-client relationship. When you’ve got particular questions relating to a specific reality state of affairs, we urge you to seek the advice of the authors of this publication, your Holland & Knight consultant or different competent authorized counsel.