22nd January 1998 TO ALL MEMBERS Dear Sirs, TANKERS VOYAGING TO AND FROM THE UNITED STATES - 1998/99 POLICY YEAR The Managers advised Members in the Association’s Circular 5:156 dated 27th December 1990 that vessels carrying persistent oil to or from the United States would be surcharged, to protect the International Group Pooling and Excess Loss Reinsurance arrangements against the distorting effect of the likely increased costs resulting from the United States Oil Pollution Act 1990 (“OPA 1990”), and legislation enacted by various States. Similar arrangements applied for subsequent Policy Years, subject to annual variations in the surcharge rates. The Association’s Circular T:023 dated 17th January 1997 detailed the arrangements to apply for the 1997/98 Policy Year. The Committee continues to recognise that some concession should be made to vessels with segregated ballast tanks, and has therefore decided that for the Policy Year from Noon 20th February 1998 to Noon 20th February 1999 a lower surcharge rate will apply to such vessels. Vessels equipped with segregated ballast tanks in accordance with the requirements of Regulation 13 of Annex 1 to MARPOL 73/78 will be surcharged at a rate of 14 U.S. Cents per gross ton, per voyage, subject to a maximum charge or “cap” of 20 voyages in the Policy Year. Vessels not equipped with segregated ballast tanks in accordance with the requirements of Regulation 13 of Annex 1 to MARPOL 73/78 will be surcharged at a rate of 16 U.S. Cents per gross ton, per voyage, also subject to a maximum charge or “cap” of 20 voyages in the Policy Year. As in previous years, the surcharge will apply to all tankers carrying out a U.S. voyage, and carrying persistent oils. Whichever surcharge rate applies, the amount will be halved in respect of cargoes exclusively discharged at LOOP (Louisiana Offshore Oil Port) or exclusively transferred to another ship at a place approved by the U.S. Coast Guard and in the exclusive economic zone (“EEZ”) as defined in OPA 1990. In the case of tankers of 3,000 g.t. or less, the surcharge applying to all U.S. trading vessels carrying persistent oils will be, at Owners’ option, either: a)A standard surcharge of US$9,600 for full or part year; or b)US$480 per voyage subject to a “cap” of 20 voyages in the Policy Year. - 2 However, should tankers of 3,000 g.t. or less carry segregated ballast tanks in accordance with the requirements of Regulation 13 of Annex 1 to MARPOL 73/78 then the surcharge applying to all such U.S. trading vessels carrying persistent oils will be, again at Owners’ option, either: a)A standard surcharge of US$8,400 for full or part year; or b)US$420 per voyage subject to a “cap” of 20 voyages in the Policy Year. Parcel Tankers As for previous years, special considerations will continue to apply to parcel tankers as follows: Definition: Ships constructed or adapted primarily to carry cargoes of noxious liquid substances in bulk, and capable of carrying at least 10 grades simultaneously, having been issued with an international certificate of fitness for the carriage of dangerous chemicals in bulk. Vessels falling within the definition of Parcel Tankers can be separately declared and the surcharge premium equivalent to a vessel under 3,000 g.t. will apply when 5,000 tonnes or less of persistent oil are carried. Varying the charging basis that applied in 1997/98, where between 5,001 and 10,000 tonnes of persistent oil are carried the premium surcharge equivalent to