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United States – Update on Temporary Ban on Immigrant/Non-immigrant Entry

 

Members who call at ports in the US will be aware of the Executive Order issued by President Trump on 27 January 2017  to restrict the entry into the US of foreign citizens from Syria, Yemen, Sudan, Somalia, Iraq, Iran and Libya, as reported in the Club’s recent News Alert (click here). 

As a consequence of legal challenges being made, US law firm Freehill Hogan & Mahar LLP now report that the Executive Order has been temporarily suspended and is not currently being enforced. However, they further advise that it is presently unclear as to whether a temporary ban will at some stage be implemented. To access a copy of the US lawyers’ update, click here.

16 Feb 2017

China – Sludge and garbage disposal

 

Members calling at Chinese ports will be aware of PRC Regulations, effective since February 2011 and amended in 2013, that require international ocean-going vessels to dispose of pollutants on board and to present a valid Pollutant Disposal Certificate (PDC) to the China Maritime Safety Administration prior to departing China. The Correspondent, Huatai Insurance Agency and Consultant Service Limited, China, reports that as of 13 December 2016 the Chinese Ministry of Transport has issued a formal notice that disposal is no longer mandatory, so that the requirement to present a PDC has been abolished. The Correspondent has issued a Circular that includes further details and an outline of the historical changes, a copy of which can be accessed by clicking here.

09 Feb 2017

United States – Temporary ban on Immigrant/Non-immigrant Entry

 

Members who call at ports in the US should be aware that, on 27 January 2017, President Trump issued an Executive Order “Protecting the Nation from Foreign Terrorist Entry into the United States”. This restricts entry into the US of foreign citizens from Syria, Yemen, Sudan, Somalia, Iraq, Iran and Libya for the next 90 days, whether they hold visas or not.  Although the details of implementation are presently unclear, US law firm Freehill Hogan & Mahar LLP has warned that whilst vessels with crew from these countries are unlikely to be denied entry to the US, it is probable that these crew members will be denied shore leave whilst the vessel is at a US port and Owners may well have to employ security guards to ensure they do not leave the vessel. To access a copy of the US lawyers’ advice with further discussion on the above, as well as on crew changes and medical emergencies, click here.

03 Feb 2017

India – Service tax on Freight

 

Shipowners and Charterers may be aware that as of 1 June 2016, a service tax on freight was imposed by the Indian Government for FOB cargoes on ships chartered by importers domiciled in India. This tax has, to date, been paid by the Indian importer. There was an express exemption for goods shipped by a party that was not domiciled in India i.e. goods shipped on a CFR basis. 

However, the Correspondent, James Mackintosh & Company, has warned that from 22 January 2017 the exemption has been revoked. They advise that the service tax will now be payable on the full value of freight irrespective of where the freight is earned/collected at the rate of 4.5%. Since a vessel’s local agent (i.e. in India) is jointly liable for payment of this tax, the Correspondent warns that the agent may require funds to be in place before a vessel arrives. For a more detailed discussion of the position click here for an article from Hellenic Shipping News. 

It is recommended that, in order to prevent delays to a vessel and/or to avoid disputes, shipowners and charterers deal with this issue by way of express contractual provision to create certainty as to responsibility and payment.

27 Jan 2017

Training Requirements – Compliance with 2010 Manila Amendments to Standards of Training Certification and Watchkeeping Convention 1978

 

Shipowners should be aware that the Standards of Training Certification and Watchkeeping (STCW) Convention 1978 was amended by the 2010 Manila Amendments, which contained new training requirements for seafarers. Between 1 July 2013 and 1 January 2017 (as appropriate), all seafarers were required to undertake additional training in compliance with the Manila Amendments and hold the requisite certification. 

However, many seafarers were at sea at the close of the compliance window (1 January 2017) and their certificates may not yet be endorsed correctly. Further there may also be administrative delays to current applications. In the circumstances, a recent IMO Circular (MSC.1/Circ.1560) has requested that Port State Control Officers (PSCOs) take a pragmatic approach to the requirement for seafarers to hold updated certification on board the vessel as per the 2010 Manila Amendments up until the 1st July 2017 (click herefor the IMO Circular). Some Flag States are also issuing similar lettersexpressly endorsing the  IMO Circular (for example Liberia – click here- and Panama – click here). 

Seafarers without the required updated Certification are advised to keep a copy of the IMO Circular with them on board the vessel to assist in trying to avoid action being taken by PSCOs. However, it cannot be guaranteed that PSCOs will not take action. 

20 Jan 2017

Sanctions – US Sudanese Sanctions Regulations – General Licence authorising trade

 

Members will be aware that the US had been maintaining broad trade and financial sanctions on Sudanese goods, persons and entities including wide prohibitions on the assistance/facilitation that can be given by a US person/entity under their Sudanese Sanctions Regulations (SSR) and Executive Orders 13607 and 13412.  However, on 17 January 2017, a new general licence came into effect which now authorises all transactions that were prohibited under the SSR and Executive Orders 13607 and 13412. The further intention is that on 12 July 2017 the sanctions will be permanently revoked.

During the period of the general licence (i.e. 17 January to 12 July 2017), US persons (including financial institutions) are authorised to process transactions involving persons in Sudan (including those that remain on the SDN list under Executive Orders 13607 and 13412) and to engage in imports and exports. 

There are, however, a number of important issues that need to be taken into account before commencing Sudanese trade. These include:

  1. Although transactions in US dollars will in theory be permitted, there is no indication yet from banks as to whether they will clear US dollar payments in relation to Sudan during the general licence period or await permanent revocation in July.
     
  2. There is a risk that the sanctions will not be permanently revoked and instead ‘snap back’ into place in July (or before) if the Sudanese government does not continue to meet the objectives set out by the current US Govt or because a different approach is taken by the new US regime.
     
  3. The current general licence is in respect of the SSR and Executive Orders 13607 and 13412 only.  It does not lift the Darfur related sanctions nor Executive Order 13400 (which lists further SDNs connected to Darfur) nor any other applicable US legislation.
     
  4. EU sanctions currently remain in place, although these are not as broad as the US sanctions were, focussing mainly on a trade embargo on arms and related material (ie. military ammunition, weapons and goods) and a few targeted individuals (click here for the current EU sanctions).

For a more comprehensive general overview on these developments please click here for the views of New York lawyers, Freehill Hogan & Mahar. Members can also check OFAC’s FAQs on the SSR by clicking here as well as OFAC’s factsheet by clicking here

In the meantime, given the above outline of ongoing issues and related sanctions, it is strongly recommended that Members continue to undertake full due diligence and negotiate appropriate sanctions protection in all contracts if considering engaging in Sudan related trade.

19 Jan 2017

Finland and China – Entry into force of Nairobi Convention on the Removal of Wrecks

 

Members will already be aware of the requirements of the Nairobi International Convention on the Removal of Wrecks that entered into force in April 2015 in various countries (click here to access the Club’s News Alert of 19 January 2015).  The Convention will shortly come into force in Finland as of 27 January 2017 and in China as of 11 February 2017.  Members with vessels  of 300GT and above trading to those countries and/or to their respective territorial seas on or after the dates specified should ensure that they have the appropriate Wreck Removal Certificate of Insurance on board.

The Correspondent, Huatai Insurance Agency and Consultant Service Limited, China, has issued a Circular with a summary of the Convention and certificate/blue card arrangements, a copy of which can be accessed by clicking here.
 

11 Jan 2017

China – Emission Control Area extended to eleven key ports

 

Members will already be aware of the Regulations concerning the sulphur content of fuel to be used by vessels at certain times during berthing in specified Emission Control Areas (ECA), Shanghai, Ningbo–Zhoushan, Suzhou and Nantong, as outlined in the Club’s previous News Alerts (click here).

As advised by the Correspondent, Huatai Insurance Agency & Consultant Service Limited, from 1 January 2017 onwards, the requirement to use fuel oil with a sulphur content not exceeding 0.5%mm when berthing has been extended to the ports of Tianjin, Qinhuangdao, Tangshan, Huanghua, Guangzhou and Zhuhai. Together with Shenzhen port, which was added to ECA as of 1 October 2016, this brings the number of key ports in the ECA to eleven. 

A summary of ECA areas and the relevant “berthing” period, or time during which low sulphur fuel needs to be used, is set out in the Correspondent’s Circular which can be accessed by clicking here. This also includes information on the next stages in the ECA, 1 January 2018 onwards, where low sulphur fuel should be used throughout the whole berthing period.

Members should review their bunkering and fuel changeover arrangements to ensure compliance with these Regulations. In particular, Members should ensure that documentary records are in order (as local authorities may inspect them) and fuel samples are kept (as appropriate) to avoid delays and penalties being imposed.
 

04 Jan 2017

Cyber Fraud

 

Members will already be aware the growing threat of cyber fraud as outlined in the Club’s News Alert of 1 July 2015 (click here), which highlighted in particular the interception of genuine emails setting out bank account details and replacement with an email containing the fraudster's bank account. 

The Club is aware of an increasing number of incidents so Assureds are reminded to be vigilant and to be duly diligent by putting in place appropriate procedures in order to combat the risk of cyber fraud. Such procedures include carrying out checks to verify a change of bank account by speaking on the phone with a known contact at the relevant company and/or checking that payment is being made to an existing bank account that has been successfully used previously. Assureds should be extra vigilant when they receive a request to make a payment to a new and/or different account, whether this is for agents, suppliers of goods/services, or payments due under the charter particularly where the bank account is already specified. As mentioned in the Club’s previous News Alert, care should be taken to avoid simply replying to an email that sets out new account details, even if it appears to originate from the correct/usual email address for the contact.

In addition, companies and ships are at risk of cyber-attack generally and it is recommended that Assureds take appropriate action to minimise those risks, including having up to date firewalls and training for staff. A virus can easily be introduced by the simple and seemingly innocuous use of a USB stick in, for example, one of the systems on board or at a company’s offices. The virus may render a whole system inoperable with ransoms being demanded, or may be more low key in gathering information, eg. they may find out when and which ships are sailing without armed guards and know when they are more vulnerable to attack.  For more information, Members are reminded of the Club’s Stop Loss article on Cyber Risks of September 2016 which can be accessed by clicking here.

23 Dec 2016

News Alerts Archive

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