Tag: russia

On 19 September 2022 the EU further amended its frequently asked questions list (FAQs) clarifying the application of articles 3g, 3i and 3j in particular of Council Regulation 833/2014.

The EU have clarified that certain goods, such as fertilizers, animal feeds, essential goods, and coal and related products, are now permitted to be transported to non-EU countries to mitigate food and energy insecurity. Also relevant services (such as financial assistance including brokering or insurance) tied to the transfer under Articles 3i and 3j of the above-listed goods to third countries via EU operators or the EU territory are now permitted.

Contrary to the position taken by the EU in August, the FAQs now make it clear that the transport of coal and certain specified goods in Annex XXI of Council Regulation 833/2014 (and related insurance) is in fact not prohibited when the goods are being carried to third countries.

Import of said goods ex Russia into EU territory remains prohibited.

For a detailed analysis of the amended EU position we refer Members to the Client Alert published earlier by UK law firm Reed Smith, available through following link:

https://communications.reedsmith.com/329/6403/september-2022/eu-u-turns-on-global-transfer-restrictions-of-russian-coal–fertilisers-and-other-goods(1).asp?sid=caddb06a-ed8b-4d44-9f8d-03372fc05fd6

Members may also find detailed information in circular issued by all IG Clubs – for our Member’s ease of reference we enclose hereby the link to the circular issued by North Of England:

https://www.nepia.com/circulars/eu-sanctions-clarification-published-on-the-carriage-of-certain-russian-cargoes-including-coal-and-fertilisers-update/

*** In the current landscape of ever changing sanctions regulations (an 8th EU sanctions package has been issued as from October 6th) Members are recommended to contact NNPC at claims@nnpc.nl in respect of any sanctions related issues ***

On 3 June, 2022, the European Union (EU) adopted a sixth sanction package against Russia. The new sanctions are primarily aimed at phasing out Russian oil imports to the EU by the end of 2022.

Furthermore, the list of designated parties is expanded to include a number of important Russian banks, media companies, and a number of persons and entities linked to the Kremlin. In addition, this package focuses on the Russian defence and security sector by extending the list of so-called “dual-use” goods.

Sanctions against Belarus are also being expanded.

For a detailed overview of the contents of this 6th package, we refer our members to the information page of the European Commission, available via the following link:

https://ec.europa.eu/neighbourhood-enlargement/news/russias-war-ukraine-eu-adopts-sixth-package-sanctions-against-russia-2022-06-03_en

Our correspondent in the Ukraine has updated us on the following developments in Ukraine:

1. The Azov shipyard has been destroyed.
2. Ukrainian authorities have banned navigation in the following mouths of the Danube River due to a danger of drifting mines: Ochakivske (0-6 km) Prorva, Poludenne, Potapove, Ankudivone, Shvydke, Vostochne and Tsyganske, part of Staro Stambul estuary and Zhebriyanivska Bay.
3. Currently there are several Russian warships which continue to operate in Ukrainian waters.
4. The Martial Law in Ukraine has been extended until 25 May 2022. The curfew in most regions has been shortened, in Odessa it currently lasts from 10 pm to 5 am.

In relation to the EU sanctions we note that a new package of sanctions was introduced on 17 April, 2022. This includes an entry ban for vessels with the Russian flag in European Ports subject to exceptions for specific cargoes, such as gas and oil, refined oil products and ores. In addition, an exception is made for certain pharmaceutical and medical products, agricultural and food products and products for civilian nuclear applications. Russian vessels involved in humanitarian transport may also fall under the exception. The list of natural persons and entities subject to the EU sanction regime has also been expanded.

The full text of the European regulation, including the extension of the sanction lists, can be accessed via the links below:

• Publications Office (europa.eu)
• Oekraïne en Rusland (rvo.nl)

JWC COMMITTEE – Update

We draw our Members’ attention to the fact that the Joint War Committee has updated the Hull War, Piracy, Terrorism and Related Perils Listed Areas to include Russian territorial waters, as per their recent circular dated 4 April 2022. As a result thereof insurance cover may be prejudiced when travelling to these areas and additional insurance required. In light of the regional tensions and developments we would recommend only proceeding to this area when necessary and seek advance guidance from agents locally and from your underwriters to ensure compliance with any requirements.

We refer to the circular of the Joint War Committee, accessible through following link:
JWLA-030 Black Sea and Sea of Azov-1.pdf

Reference is made to our previous circulars regarding the developments and sanctions imposed on Russia due to the escalation of the conflict in Ukraine. On the basis of recent advice received from our correspondents, we would like to inform our Members as follows:

• The state of emergency in Ukraine has been extended until April 25, 2022. All ports under Ukrainian control are closed. Recent circulars issued by IMO indicate that a number of foreign-flagged ships are currently unable to leave Ukrainian ports due to the situation in the Black Sea.
• The Ukrainian ports of Kherson and Berdyansk are occupied by Russian troops. No shipping traffic is possible in these ports.
• The port of Mariupol is currently being bombarded daily by Russian artillery. The port and the Sea of Azov are blocked by the Russian navy.
• A ban has been imposed on Ukrainian men (aged 18-60 years) from leaving the country without required authorization. We understand that it is currently not possible to recruit Ukrainian crew members from Ukraine.
• Difficulties are currently being reported in connection with the repatriation of Ukrainian crew members. The airports of Odessa and Kiev are closed, repatriation of Ukrainian crew members is mainly carried out via the nearest airports in Romania (Bucharest) and Poland (Warsaw). From there, crew members may travel to Ukraine by domestic transport.
• In Russian ports, Ukrainian crewmembers may still in some cases be interviewed by Russian immigration authorities and may be asked about their attitude towards the conflict in Ukraine and/or be refused entry to the port. We advise our Members to alert their Ukrainian crew members and recommend them to answer these questions in a neutral fashion.
• We have received reports that in Swedish ports and a number of ports in the United Kingdom, stevedores have refused to serve ships going to and from Russia, ships carrying Russian import and export cargo and ships with the Russian flag.

Members are reminded that assistance and/or advice from the NNPC does not in any way replace or form part of the member’s own due diligence obligation to perform sanction checks. Sanction checks should be performed on all parties and cargoes and a specialist should be consulted whenever necessary. It is also important to note that even if no sanctions apply to a cargo, this does not guarantee that there will not be restrictions imposed by banks and/or authorities. Members should also be aware of possible practical issues related to shipments to and from Russia, such as refusal of services by stevedores or bunker suppliers.

We refer to our prior circulars regarding sanctions imposed on Russia pursuant to the escalation of the conflict in Ukraine. We would like to inform our members about the latest developments:

On 15 March, the EU adopted a fourth sanctions package. The sanctions list is to include a number of persons in the Kremlin’s sphere of influence and companies in the aviation, defense, shipbuilding and mechanical engineering sectors. Additional trade restrictions have also been imposed on the export of iron and steel from Russia as well as on goods and technology destined for Russia’s defence, security and energy sector. Furthermore, trade restrictions were imposed on certain luxury goods to Russia.

For more detailed information on the content of this new sanctions package, we would like to refer our Members to the EU press release and the relevant regulation (Council Regulation (EU) 2022/428):

https://www.consilium.europa.eu/nl/press/press-releases/2022/03/15/russia-s-military-aggression-against-ukraine-fourth-eu-package-of-sectoral-and-individual-measures/

In addition, we would like to alert our members that Russian Federal Security Service (FSB) is interviewing Ukrainian crew members in Russian ports on the following topics:

1. the seafarer’s opinion about the “Russian Special War Operation” in Ukraine;
2. whether the seafarer has relatives within the Ukrainian Government;
3. whether the seafarer has relatives in the south-eastern part of Ukraine/ Russia; and
4. whether the seafarer took part in the military actions in Donbass, Ukraine.

We advise Members to advise their Ukrainian crew members to answer the above questions as neutrally as possible and to refrain from expressing their opinion about the ongoing conflict and/or the current political situation in Russia and Ukraine.

We reiterate our recommendation to ensure appropriate sanction checks are performed for any Russia related shipments. Further updates will be published from time to time. In the meantime, members are invited to contact us in case of questions and/or comments.

We refer to our previous circulars regarding sanctions imposed on Russia following the escalation of the conflict in Ukraine.

We would like to inform you of the following developments:

• NATO warns of an increased risk to shipping in the northwestern part of the Black Sea and recommends shipowners as follows:
  • to stay in close contact with local agents and with national and local maritime authorities on the most recent developments..
  • keep abreast of navigational warnings and avoid the high-risk areas, warships and military vessels.
  • Thoroughly document and report all incidents through their respective national channels and to local maritime authorities.

• The UK Government has announced that it will ban Russian owned, chartered or operated vessels of Russian nationals or residents of Russia from UK ports. The ban also applies to ships flying the Russian flag.

• We understand that there are delays in handling customs formalities in several European ports. While there is currently no general ban on shipments to and from Russian ports, we are advised that customs authorities strictly enforce sanctions against cargo originating in Russia, resulting in predictable logistical delays.

The news about the war between Russia and Ukraine is raising a lot of questions for our members and insured parties. Based on Article 33 of the Class 1 Insured Risks, liabilities or costs or expenditure arising from or caused by war risks may be excluded from the cover. We therefore recommend avoiding the Black Sea ports of both Ukraine and Russia for the time being if possible.

But what if specific plans and agreements have already been made to sail those ports? Do the agreements signed leave possibilities for refusing a trip, for example? In this article, we would like to bring some general clauses to your attention:

1. War risks clauses

We recommend that a war risks clause should be included by default that sets out the obligations on both sides concerning war risks. We advise explicitly incorporating the terms of the chartering contract on bills of lading issued for a cargo and (if possible) explicitly stating the war risks clause on the bill of lading. BIMCO currently recommends using the CONWARTIME 2013 and VOYWAR 2013 clauses, although other (and outdated) clauses are also in circulation. We recommend using the latest version of the BIMCO clauses and checking their content carefully because of the legal implications of the various clauses. GENCON 1994, for example, still refers to the VOYWAR 1993.

Using such a clause may give the master or owner the option of refusing a voyage if the ship would then be exposed to war risks. Proof will then be needed that there was a ‘realistic likelihood’ of the war risks; mere speculation is not sufficient. If this is the case, the master/or owner should inform the charterer and ask for revised sailing instructions. Additionally, the ship may have a contractual right to leave if it is already in a hazardous area.

2. Safe harbour clause

In addition to the war risks clause, there is also a discussion about safe harbours. The general sense is that it is the charterer’s responsibility to ensure that a ship sails to and returns from a safe port for loading/unloading without being exposed to exceptional hazards. This is therefore not only about the safety of the port but also about the safety of the route to it. It could be particularly relevant in the context of e.g. sailing through the Sea of Azov to reach a port there. If that safety is compromised, in the opinion of the master or operator, there is the option of refusing the order. This requires careful consideration, though: should it transpire that the port was safe, the refusal may be deemed unjustified and the shipping company held liable for the damages suffered by the charterer.

3. Force majeure clause

War risks may qualify as force majeure in certain cases. The burden of proof lies with the party seeking to rely on such a clause. The possibilities for invoking it will be limited if the risk was already known or should have been known when the contract was signed.

4. Trade limits clause

If a trade limits clause has been included about sailing to ‘war zones or war-like zones’ e.g. as determined by the Joint War Committee (JWC), it may be possible to refuse the charterer’s instructions as the Black Sea and the Sea of Azov are now designated as such.

5. Sanctions clause

Given the recent sanctions announced by the USA, UK and EU plus the expectation that they will be tightened further (see also our other articles on this subject), we advise including a sanctions clause and carrying out a sanctions check on the charterer, the cargo and parties with interests in the cargo for every voyage. We also recommend checking which banks are involved and whether payment of freight and charges is possible at all. Also consider payment of port fees and agents’ fees.

We would like to advise everyone who is considering sailing to Ukraine or Russia in the near future to contact us for individual advice.