Author: nlnnpc-mashinaki

This circular provides information on the recent addition of the Maritime Authority of Venezuela (Instituto Nacional de los Espacios Acuaticos – “INEA”) to the US SDN list.

Since 2017, the US has imposed significant sanctions on companies and individuals in Venezuela, especially with regard to the oil industry. The Maritime Authority of Venezuela (INEA) has recently been added and included on the Specially Designated Nationals And Blocked Persons List (SDN). The inclusion was on that the basis that the company is said to be active in the oil sector of Venezuela by supporting the state oil company, Petróleos de Venezuela SA. The question arises whether the use of INEA services constitutes a breach of the sanctions. To clarify this, the American OFAC has now issued General License 30A in which this is further explained:

• Even before INEA was placed on the SDN list, it was the designated entity of the “Government of Venezuela” under EO 13884. As a result, US parties were already prohibited from trading with INEA without a license.
• The license requirement only applies to American individuals and companies. For non-US parties, the activities permitted under General License 30 A do not constitute a sanction violation.
• General License 30A stipulates that normal port charges, such as expenses for tugs and port charges, are in principle allowed unless they constitute a breach under EO 13850.

We advise members to take this into account when operating in Venezuelan ports. If you have any questions, please contact us at claims@nnpc.nl.

NNPC would like to inform its members about the new rules that apply to bunkering in “Zona Comun”, the area up to 12 miles off the coast at La Plata, Argentina. In particular, a new OSRO requirement applies whereby the Argentine Coast Guard requires that all vessels which bunker within the Zona Comun, must take preventive measures beforehand ensuring that they are able to respond within 60 minutes of an oil spill occurring. Every vessel that wants to bunker within this area must be in possession of an “OSRO certificate”. The costs for obtaining such a certificate are around USD 3,200.

The Maritime Authority has emphasized that when bunkers are delivered at any berth of place within 12 miles of the coast, it is also necessary to have the necessary equipment and personnel available in case of any oil spill or pollution.

As of January 1 2021, the penalties and fines for damages resulting from oil pollution from ships in the waters of the State of California will increase.

Several already existing fines will be increased to a maximum of USD 1.000.000.000 per violation and each day or part of that day on which the violation occurs will be considered as a separate violation. In addition, the courts have received the authority to impose a new fine of up to USD 1.000 per gallon of spilled oil above 1.000 gallons.

NNPC’s P&I cover already includes a separate cover for oil pollution damage. This cover has a limit of USD 1.000.000.000 per vessel and will remain in place unchanged.

Should you require assistance in a matter concerning a dispute after the purchase of a second hand craft please do not hesitate to contact us.

We regularly receive a request for assistance in matters involving alleged defects after the purchase or sale of a second hand craft. Ultimately, the legal position will have to be assessed on the wording of the purchase contract, which is why it is important to ensure that proper terms are being used and to properly review the contract when assessing the rights of the insured.

Needless to say there are various different approaches to such disputes, however often the most significant part of a dispute turns on the phrase ”as is where is”. This phrase means that the craft has been purchased in the condition in which it was at the moment when an agreement was reached on the sale. As a buyer, it is important to be aware of the inclusion of this phrase in a contract, given that it may be determinative for your legal position.

In order to argue a breach of contract based on hidden defects after a craft is purchased, it is necessary to establish whether the seller has complied with his duty of disclosure and whether the buyer has complied with his duty of inquiry. Relevant information has to be provided by the seller and the buyer has the obligation to thoroughly investigate the condition of the craft prior to purchase. Based on jurisprudence it is clear that the courts often, when “as is where is” terms are agreed, tend to attach greater value to the duty of inquiry.

There is some debate as to whether “as is where is” has a significant impact on the existing legislative framework, which is why a contract will often include a more extensive word providing that the craft “will be delivered ‘as is where is’ with all “visible and hidden defects”.

According the above, we recommend that when purchasing a craft, you should pay close attention as to whether the contract contains ‘as is where is’ or similar wording and to be aware of the potential implications for the condition of the vessel. In addition, we recommend that every purchaser properly investigates the condition of the craft and where appropriate appoints a surveyor.

Should you require assistance in a matter concerning a dispute after the purchase of a second hand craft please do not hesitate to contact us.

Over the past two months we have dealt with 5 stowaway cases, which included a total of 14 stowaways attempting to make the crossing from West-European ports to the United Kingdom. In several cases, there are suspicions that the stowaways received assistance from within the local port or used disguises to come on board and hid among the cargo of the vessel or in the engine room. The presence of stowaways is a heavy burden on the crew, but particularly in Great Britain it is becoming increasingly difficult to get the stowaways off board and various procedures have to be followed. In addition, even if the stowaways can be disembarked, there is a risk that the shipowner may be faced with a fine for each individual stowaway.

We recommend that, particularly in the ports of Spain, France, Belgium and the Netherlands, extra care should be taken in the case of stowaways, especially if the ship is on its way to the UK. For example, by taking additional measures, such as watchkeeping and a visitor pass system to ensure that they are able to properly monitor who embarks and disembarks the vessel and to conduct a thorough check of the vessel prior to departure. We would also like to refer you to our Loss Prevention guide on Stowaways, which can be downloaded from our website.

The corona pandemic continues to affect vessel operations worldwide. We have had a number of cases over the past months in which crewmembers were infected resulting in the quarantine of crewmembers and the vessel in question. In many of these cases, the authorities quarantined the vessel and the infected crewmembers were ordered to stay in isolation for 10 days in accordance with the European guidelines.

This often raises the question as to whether infected crew members should isolate themselves on board or whether there are also opportunities to isolate themselves ashore and allow the vessel to sail again. Isolation on board a vessel involves a minimum period of 10 days of inability to sail and there is a risk of further spreading of the virus on board of the vessel, which in turn may result in an extension of the quarantine. In addition, crew members who have not tested positive but have been in contact with infected crew members often have to isolate themselves as well.

In many cases, the only way to eliminate the virus on board and allow the vessel to sail again is to replace the entire crew. This obviously depends on whether a crew change is even authorised by the authorities and whether it is the best option from a costs perspective. The shipping company in question will have to consider whether 10/14 days of idling outweighs the costs incurred in replacing the crew, the obligations towards the charterers and the urgency to get the cargo to its destination. The most important costs items here are loss of earnings (hire) and the crew related costs (incl. accommodation and double wages). In addition, the vessel will need to be disinfected during the crew change. Depending on the extent of all costs involved and the willingness of the authorities to cooperate, a crew change may not be an option.

In the event a crew change is an option, a vessel can usually depart much earlier. For example, we recently received a notification from one of our Members that several crew members on board the vessel in question had tested positive for corona-virus. The authorities had initially required the vessel to remain in port for 10 days and not to leave until everyone else had tested negative again. Fortunately, with the help of our local correspondent, we were able to reach agreement with the authorities and to find a suitable location to accommodate all crewmember at reasonable costs. In the end, the vessel was able to depart without any restrictions within 5 days.

The risk of infection remains high and the consequences on board can be considerable. The advice is therefore to prevent infection of crewmembers as much as possible by following the recommended prevention guidelines. In the event of infection on board, it is important to inform the Club in time so that the consequences can be limited as much as possible.

Through this article, we would like to draw your attention to amendments in two US statutes which expand the sanctions that target the construction of the Nord Stream 2 and TurkStream pipeline projects and those who provide vessels and other services to these projects.

Nord Stream is the name of a system of offshore pipelines transporting natural gas from Russia to Germany. The first project, Nord Stream 1 (NS1), was completed on 8 October 2012 and includes two pipelines running from Vyborg to Greifswald. Nord Stream 2 (NS2) will run from Ust-Luga to Greifswald. Work on NS2 took place between 2018-2019 and the lines had been expected to become operational mid 2020, however this has been disrupted by the introduction of US sanctions.
TurkStream is a natural gas pipeline running from Russia to Turkey. It starts from the Russkaya compressor station near Anapa in Russia and crosses the Black Sea to the receiving terminal at Kiyiköy. Construction on TurkStream started in May 2017 and gas supply to Bulgaria via this pipeline started on 1 January 2020.

The two legislative amendments in question are “the Countering America’s Adversaries Through Sanctions Act (CAATSA)” and “the Protecting Europe’s Energy Security Act (PEESA)”. Although the wording in the CAATSA and PEESA sanction authorisations is different, both Acts have the potential to affect impact non-US ship owners as well as their insurers. We briefly expand thereon as follows:

• CAATSA: The ACT allows the US government to target certain high-value investments or other transactions related to the construction of Russian energy export pipelines with sanctions. On 15 July 2020, the State Department confirmed that they would use the Act to target the NS2 and TurkStream. As a result, any person who provides the Russian Federation with goods or services that directly and significantly facilitate the expansion, construction, or modernization of NS2 or TurkStream is therefore potentially in breach of US sanctions.
• PEESA and PEESA Clarification: PEESA came into force in December 2019 and mandates sanctions against vessels engaged in pipe-laying for the NS2 and TurkStream projects, and foreign persons who have knowingly sold, leased or provided those vessels for the construction of such a project or facilitated deceptive or structured transactions to provide those vessels for the construction of such a project. A group of Senators and Congressmen have recently proposed two amendments to PEESA seeking to expand the type of activities requiring mandatory sanctions, including any supply type services provided by vessels. Under these amendments anyone providing insurance or reinsurance for vessels engaged in pipe-laying or pipe-laying activities will also be in breach of US sanctions. In addition, the bills envisage a reporting mechanism in which underwriters of a sanctioned vessel will automatically be identified.

We remind our Members that cover will be compromised for any vessels involved in activities that put the NNPC at risk of breaching sanctions. In view of the direct sanctions threat posed to insurers by CAATSA and PEESA, there will be no club cover for any activity involving or related to the Nord Stream 2 or TurkStream construction projects. We strongly advise all our members to check whether these changes will affect ongoing or planned projects. Should this be the case, or if you have any concerns, please contact us.

When buying a second-hand pleasure craft, you are naturally focused on the benefits of ownership, however what if, after you assume ownership, you discover that the craft has defects and you want to hold the seller liable for these defects? What measures can you take as a buyer and what should you pay attention to?

• We recommend that you always ensure that the purchase is put in writing in the form of a contract, regardless of the value or size of the craft. In particular, pay attention to the terms regarding the condition of the vessel upon delivery. Will the craft be transferred “as is”? Is a condition survey carried out by an surveyor? Does the seller guarantee the condition of the vessel?
• As buyer you have a duty to investigate. You must investigate the condition of the vessel as best as possible. The law imposes stricter requirements on your duty of examination when it comes to the purchase of a craft that has already been used. For example, as a buyer of a second-hand craft you must take into consideration that, given the age of the vessel, there are traces of use and that there is possibly overdue maintenance. As part of this duty, you must also ask the seller questions in advance should you have any doubts about certain characteristics of the craft.
• The seller has a duty of disclosure under the law and must inform you of: defects known to the seller at the time of transfer including defects which do not impede the normal use of the vessel. However, whether the seller can be held liable will often depend on whether the defect was or should have been readily visible.
• As soon as you notice that the craft a defect after you have taken delivery, it is important to notify the seller in writing as soon as possible. In a notice of default you must clearly indicate which defect has been found and invite the seller to rectify the defect within a reasonable period of time.

We recommend that you always as a surveyor to check the condition of a second-hand recreational craft before you take delivery. Should you require assistance in drawing up a purchase contract or a notice of default, please do not hesitate to contact us.

This update is a follow-up of our “Volume 2020/21 Update corona”

In many countries, the number of new COVID-19 infections continues to increase. In recent months, the coronavirus has caused almost all countries worldwide to take precautions and put in place various restrictions.

Below we list the most important developments:

• France: On September 10th, France confirmed that all port operations are proceeding normally and with minimal delays. Surveyors are attending vessels and are required to comply with the relevant safety measures. For the record, we refer you to the ‘’Inventory of measures related to Coronavirus for French Ports’’.
• Italy: All port activities in Italy are operating normally and the presence of surveyors is not affected. In Naples, all ships arriving in the port must apply for “Sanitary Free Pratique” prior to arrival. When free pratique is granted, seafarers may go ashore if the ship can demonstrate that they have not been in excluded areas for 14 days prior to its arrival in Naples.
• Argentina: Pandi Liquidadores advises that the crew is not allowed to come ashore. External persons are only allowed on board with prior permission.
• Venezuela: Venepandi advises that there is a fuel shortage throughout the country and that airports are closed, however, that port operations are continuing normally. However, security measures do apply per port. No tests are carried out on board for COVID-19 unless the captain reports cases of COVID-19. External persons are only allowed on board with prior permission.

These developments show that the measures differ considerably from country to country. We advise members to request regular updates per port from the relevant agent regarding the applicable restrictions. If you have any questions, our members can of course always contact us via claims@nnpc.nl.

Since January 1, 2020, the “Dockers’ Clause” is in force as part of the International Bargaining Forum (IBF) agreement between the Joint Negotiating Group on behalf of shipowners and the International Transport Workers’ Federation on behalf of seafarers in relation to cargo operations involving container vessels. The Dockers’ Clause is part of the agreements on remuneration and terms of employment that have been agreed at an international level by trade unions and employers (organisations). These agreements are intended to be implemented in the collective and individual employment agreements of seafarers.

In a recent case in the Netherlands, FNV Havens, together with the Nautilus and Verdi divisions of the International Transport Workers’ Federation (ITF), filed a case against Marlow (employment agency) and Expert Shipping B.V. (owner of a ship crewed by seafarers employed through Marlow). A number of companies active in the European short sea and feeder transport had joined the defendants. The crew was employed under a Nautilus Special Agreement that included the Dockers’ Clause. The procedure dealt with the following:

• Marlow and the owner had, according to the plaintiffs, acted in violation of the Dockers’ Clause by having lashing operations carried out by seafarers instead of dock workers. The plaintiffs believed that such work should only be carried out by specialized lashing companies.
• It was argued on behalf of Marlow and the owner that such a strict interpretation of the Dockers ‘Clause’ would be unreasonable as it posed risks for crew members due to the corona pandemic, would lead to delays and additional costs and would make the port of Rotterdam economically unattractive for container ships. In addition, it was pointed out that the crew was paid separately for this.
• It was also argued on behalf of the shipowner that the Dockers’ Clause was in breach of Article 101 TFEU and / or Article 6 of the Competition Act because the clause prevents or restricts competition within the internal market between ship operators, now that they can no longer compete on the flexibility and cost-efficiency of their services through the performance of lashing activities and because all lashing activities are reserved for the ITF affiliated lashing companies.
• The plaintiffs had requested the court to impose a penalty payment of 24,000 euros for each violation.
  The claims against the shipowner were rejected. According to the judge hearing the preliminary application, he could not preclude the possibility that the judge in first instance would find that the application of the Dockers’ Clause in the manner proposed would be unreasonable.

In particular, the fact that during the drafting process there were no discussions with shipowners and time charterers prior to implementation of the Dockers’ Clause, despite the fact that compliance with the clause will have a major impact on their business operations, played an important role in the judgment. In addition, it remains possible that the Dockers’ Clause will be found to fall outside of competition law. We shall await with interest the decision of European Commission in the complaint that has now been filed regarding the matter.