Urgent update Circular - 28th January

28/01/2014
OUTLINE: The International Group is seeking clarification on the extent to which Club cover can respond to liabilities arising during the six month suspension period; Some liabilities may only crystallise or be presented after the six month suspension period has ended (20th July 2014);  The Club may be unable to provide security for a claim in circumstances in which a demand  under  a club letter of undertaking be made after 20th July 2014;  The Club may be unable to provide Blue Cards to Members who contract to carry Iranian crude oil, petroleum and petrochemical products after 20th July 2014;  Members are strongly urged to consult the Club regarding insurance cover before contracting to transport Iranian crude oil, petroleum and petrochemical products 

Latest Club guidance on sanctions

Ukraine sanctions - Update 14th March 2014


The Club has continued to monitor the ongoing state of affairs in the Ukraine and Crimea closely. At present the situation remains in the balance pending the result of the general referendum on the future status of Crimea, to be held on the 16th March 2014. At this stage it is difficult to predict what effect the result of the referendum will have on the ongoing crisis.

Over the past week, since the coming into force of Council Regulation (EU) No. 208.2014 and the signing of the US Executive Order by President Obama, we have had a number of enquiries from our Members about the risks and issues arising out of trading to the Ukraine under the present conditions.

FAQs

We hope that the following FAQs will assist our Members with their more general concerns:

  • What is the current situation at the major Ukrainian ports?

At the main ports, outside of the Crimea, Odessa, Ilyichevsk, Yuzhny, Nikolayev, Dneprobugskiy, Oktyabrsky and Kherson, little to no disturbance has been reported. Regular updates from the Club’s local correspondent indicate that all of the port facilities, customs, tugs and pilots are operating normally.

Similarly, the situation at Sevastopol appears to be calm for the time being. At the Crimean ports of Kerch and Theodosia, it has been reported that the local customs, and other government offices, are being run by the Crimean government and that consequently there may be some disturbance to ordinary operations at these ports. However, to-date no specific disturbances have been reported.

  • Does the situation in Ukraine have any implications for war risk insurance cover, or charterparty war risk clauses?

The Lloyd’s Market Association Joint War Committee has not declared Ukraine to be a war-risk area. However, Members are advised to check with their war risk underwriters, prior to undertaking voyages to Ukrainian ports, if they have any concerns regarding their war risk cover.

Although the situation is currently reasonably stable, shipowners are also advised to check the terms of their charterparty war-risk clauses as the effects of such clauses may not be limited to designated war-risk areas, and may include provisions for areas where there are ‘war-like activities or hostilities’.

  • Do shipowners need to take any precautions in relation to the EU Sanctions?

The EU sanctions are targeting certain individuals associated with President Yanukovych's regime in Ukraine. At the moment the sanctions are limited in scope and are only directed at 18 people.

However, as these individuals are reported to have extensive political and economic interests in the Ukraine, shipowners trading to the Ukraine are advised to seek legal advice if there are concerns about any of the individuals, companies or other entities involved with the vessel’s call, specifically the following:

• Charterers
• Sub-charterers
• The terminal
• The Shippers/Receivers
• Stevedoring companies
• The Vessel's agents

  • What effect does the US Executive Order have on the sanctions regime?

The Executive Order gives the US Government the authority to impose sanctions, with immediate effect, upon individuals that are responsible for, or are involved in, directly or indirectly;

- undermining democratic processes or institutions in Ukraine;

- threatening the peace, security, stability, sovereignty or territorial integrity of Ukraine; or

- misappropriating Ukrainian state assets or assets of a economically significant entity in Ukraine

The sanctioning powers given to the US Government effectively mirror the effects of the EU sanctions regime currently in place.

To-date the US Government has not published a list of persons sanctioned under the Executive Order, the effects and implications of the Order for shipowners trading to the Ukraine are therefore not clear at this stage.


The Club will continue to monitor the situation closely and will report any significant changes in the current situation.

Ukraine Sanctions- 06/04/2014

As part of the response to the ongoing tensions in the Ukraine and Crimea, the EU yesterday issued Council Regulation (EU) No 208/2014, which imposed limited sanctions targeted at individuals associated with the regime of President Yanukovich. The EU regulation came into force on 06/04/2014.
 
HM Treasury has issued a notice explaining the effect and implications of the EU regulation. The US Department of the Treasury has also issued a Bulletin in relation to the signing of an Executive Order authorising the US Government to impose sanctions on a similar basis.
 
Club Contacts for any further enquiries:
 
Luke Lane
Email: luke.lane@thomasmiller.com
 
Nigel Carden
Email: nigel.carden@thomasmiller.com
 
External Links
Links to the EU Regulation, HM Treasury Notice and the US Treasury Bulletin attached at the head of this webpage can be found below:
 
Council Regulation (EU) No 208/2014
http://eur-lex.europa.eu/JOHtml.do?uri=OJ%3AL%3A2014%3A066%3ASOM%3AEN%3AHTML
 
HM Treasury Financial Sanctions Notice
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/287392/Notice_Ukraine_060314.pdf
 
US Department of the Treasury Bulletin
http://content.govdelivery.com/accounts/USTREAS/bulletins/a94aba
 

Country-specific resources on sanctions

This page highlights the latest developments in respect of sanctions, but to research specific country-related information click one of the country links below:

Iran

Syria

Ukraine

Libya

 

Government resources on sanctions

Two excellent resources on current sanctions regimes are those of the HM Treasury website and the US Treasury website.   Both provide individual sections on each sanctions regime that they maintain including financial sanctions, licensing arrangements, guidelines and FAQs.  A link to the relevant pages of those sites is included in the specific national sections found below on this page.

Members can check the sanctioned parties on two websites:

a) United Kingdom Treasury ( HMT): https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets

b) United States Office of Foreign Asset Control ( OFAC):  ttp://www.treasury.gov/ofac/downloads/t11sdn.pdf

Emergency Contacts


If you need to call our offices out of hours and at weekends, click After Office hours for a up to date list of the names of the Duty Executives and their mobile phone numbers. 

Ship Finder


This Ship Finder is updated on a daily basis. Members who need to advise the Club of updates to their recorded ships' details should advise their usual underwriting contact.


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