GC ports and international intrigue

The Wall Street Journal reported a story with international intrigue that included port operations across the Gulf Coast. On March 3, the U.S. Treasury Department sanctioned Russian oligarch Alisher Usmanov. On the same day, a cargo ship arrived at the Port of Mobile, Ala., carrying 53,000 tons of pig iron destined for a Mississippi steel plant. It came from a subsidiary of Usnavov’s company that accounts for much of his wealth, according to shipping records. Another Usnavov subsidiary owns the shipping firm that delivered it. The punch line to the story: “It was all legal.” The thrust of the WSJ story is that the Biden administration’s Treasury Department, has struggled with various sanctions and penalties intended to make oligarchs suffer for ties to Russian President Vladimir Putin. But, shutting off business with massive companies can have destructive consequences - job losses and market turmoil on a global scale. At the Alabama State Port Authority’s recent board meeting, Deputy Director/COO Rick Clark told the board that direct impacts of the war on port operations were only beginning to emerge. Some of the issues with the war touches the energy and steel and metals markets, but it was too early to say about the effects on the port. He suspects that imports will increase in the near-term but uncertain for the future, but there will be impacts on Gulf Coast ports, including New Orleans and Gulfport. Inbound vessels, crew and cargo clearances are the jurisdiction of the U.S. Customs and Border Protection and U.S. Coast Guard.  The WSJ article points to federal officials are having to make decisions about sanctions and exemptions to avoid unintended consequences. Blocking business with an oligarch’s company can be messy, affecting jobs or causing hardship for other companies that depend on the sanctioned company’s products. In Usmanov’s case, Treasury exempted companies in which he has less than a 50 percent stake. He holds a 49 percent stake in a holding company whose subsidiary shipped the pig iron through Mobile. The exemptions “help remove doubt about the legality” of the shipment, the WSJ reported. According to Judith Adams, VP of internal and external affairs for the Alabama port authority says: “t’s a learning process. (Source: WSJ 03/31/22)