Double Retention/Designated Vessel Procedure 13 February 2007 No.06-012 At its meeting on 6 February 2007, our Club's Board approved the proposal for Double Retention/Designated Vessel Procedure which the International Group of P&I Clubs (Group) has developed as one of a series of measures against sub-standard ships. The Procedure aims to enforce disciplined underwriting activities amongst the Group Clubs and will be introduced into the Pooling Agreement.This proposal has already been approved by the requisite majority of the Group Clubs and will come into effect on 20 February 2007. 1.Background Some of the proposals adopted by the Group emerged from a study commissioned by the Maritime Transport Committee of the OECD,in May 2004, on how P&I Clubs could contribute to minimize impacts of substandard shipping on safety at sea. The Group and its Ships' Standards Sub-Committee(SSSC) considered the recommendations which were developed into a formal submission, on behalf of the Group, to the February 2005 meeting of the IOPC Fund Working Group on revision to the 1992 CLC/Fund regime.It should be noted that the submission included, among other things, reference to the possibility of a provision whereby the insurance of a ship, deemed to be substandard, could be made subject to a double retention for Pooling purposes. A retention is the initial amount each Club is required to absorb before a claim becomes Poolable, and hence, shared amongst Group Clubs. (The retention for the 2007/8 policy year is US$7 million. A double retention would be US$14 million). The features and operation of the Double Retention/Designated Vessel Procedure are described in more detail below. 2.Outline of Double Retention/Designated Vessel Procedure The purpose of Double Retention/Designated Vessel Procedure is to provide a process by which a Club that considers vessel unfit to underwrite may seek to reduce the risk of having to share in Pool claims for that vessel, should the vessel then b