RA 025 March 2011 – One of a series of Steamship Mutual Loss Prevention Bulletins produced by the Ship Safety Trust Page 1 of 2 For further information please contact the Loss Prevention Department, Steamship Insurance Management Services Ltd., Tel: +44 20 7247 5490; Email: loss.prevention@simsl.com Web: www.simsl.com/loss-prevention-and-safety-training.html Sanctions Sanctions Sanctions Sanctions – –– – Impact on Chartered Vessel Entries Impact on Chartered Vessel EntriesImpact on Chartered Vessel Entries Impact on Chartered Vessel Entries Background BackgroundBackground Background As Members will know, there has been a recent increase in the use of sanctions by national and international governmental organisations such as the United Nations and European Union, as a means of bringing political and economic pressure to bear on certain regimes/countries around the world. Details of recent sanctions measures imposed against Iran, Libya and Cote D’Ivoire may be found on the dedicated Sanctions page on the Club’s website. In the context of international trade, the imposition of sanctions requires all involved parties, including the P&I Clubs, to assess the impact on the insurance and related services they offer, in order to ensure that they are not in breach or facilitating a breach of sanctions measures. The Club has issued a number of relevant Articles, Circulars and Risk Alerts directly concerning sanctions issues, and the Managers wish to draw Members’ attention to some practical insurance considerations which may affect the chartering of ships. P PP Provisions of the Charterers’ rovisions of the Charterers’ rovisions of the Charterers’ rovisions of the Charterers’ Clauses ClausesClauses Clauses In the context of Charterers’ entries with the Club, sanctions are potentially relevant to the following clauses of the Charterers’ cover: Clause 4 ii – Open Covers – the Managers may decline entries declared; Clause 13 ii – Recovery – there is no right of recovery from the Club if reimbursement to the Member would expose the Club to a sanctions risk; Clause 19 i b – Imprudent Trading – a Member’s employment of a ship in sanctionable activity may amount to imprudent trading and preclude recovery from the Club for liabilities arising as a result; Clause 24 i a (ii) – Classification and Eligibility of Ships for Chartered Entry – the registered owners and direct disponent owner of a ship chartered by a Member and entered in the Club for charterers’ liabilities, must have P&I insurance with an IG Club or insurance which in the Managers’ view is equivalent; Clause 30 iv – Reinsurance – there is no right of recovery in respect of liabilities which the Club itself cannot recover under applicable reinsurances, because of the risk RA 025 – March 2011 – One of a series of Steamship Mutual Loss Prevention Bulletins produced by the Ship Safety Trust Page 2 of 2 For further information please contact the Loss Prevention Department, Steamship Insurance Management Services Ltd., Tel: +44 20 7247 5490; Email: loss.prevention@simsl.com Web: www.simsl.com/loss-prevention-and-safety-training.html of sanctions or other adverse action against reinsurers. Clause 32 – cessation of Membership by virtue of applicable sanctions legislation/regulations. The provisions of the Charterers’ Clauses referred to above are a reflection of the care that the Club must exercise when writing chartered business, to ensure so far as practicable that the Club and its Members are not ad