American Club Circular No. 24/12 1 SEPTEMBER 25, 2012 CIRCULAR NO. 24/12 TO MEMBERS OF THE ASSOCIATION Dear Member: ENTRY INTO FORCE OF THE REGULATION (EC) NO 392/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 23 APRIL 2009 ON THE LIABILITY OF CARRIERS OF PASSENGERS BY SEA IN THE EVENT OF ACCIDENTS (PLR) The PLR will apply in all European Union (EU) and European Economic Area (EEA) member states 1 from December 31, 2012. The regulation essentially gives effect to the key provisions of the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 as amended by the 2002 Protocol (the Convention), together with the 2006 IMO Reservation and Guidelines for Implementation of the Convention covering war risks (the Guidelines). A significant feature of the PLR is that it extends the provisions of the Convention to certain categories of passenger ships engaged in domestic sea going voyages 2 , unless the member state or EEA state takes steps to defer application of the regulation to such voyages. It also adds a specific obligation to compensate for loss of or damage to mobility equipment and provides that the carrier shall make advance payment sufficient to cover immediate economic needs where the death of or personal injury to a passenger is caused by a shipping incident 3 as defined in the Convention. As of 28 August 2012, eight states have acceded to the Convention, which will enter into force twelve months after the tenth state has ratified/acceded. The Convention will therefore enter into force after the regulation takes effect. It is possible that the Convention will enter into force in the 2013/14 policy year and, when it does so, there will be two distinct and separate regimes (the PLR and Athens Convention) in force and applicable. By virtue of the EEA Treaty, EEA states have an obligation to implement and apply the PLR by December 31, 2012. An update to Members will be issued closer to the time of entry into force of the Convention. 1 EU membership is comprised of 27 states being: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. EEA states are: Iceland, Norway and Liechtenstein. Croatia will accede to the EU on July 1, 2013 and will apply the Regulation from December 31, 2012. 2 The Athens Convention 2002 applies only to “international carriage”. Article 1.9 defines international carriage as meaning “any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State”. 3 “Shipping incident” means shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship or defect in the ship. American Club Circular No. 24/12 2 Liability of the carrier The PLR provides a liability, compensation and compulsory insurance system for death of and personal injury to passengers and loss of or damage to luggage and vehicles, and provides that the carrier is: 1. strictly liable to pay compensation for the loss suffered as a result of the death of or personal injury to a passenger caused by a shipping incident up to an amount of SDR 250,000 4 (approx.US$3