5 November 2014 TO ALL MEMBERS Dear Sirs The Entry into Force of the Nairobi International Convention on the Removal of Wrecks On 14 April 2014 the Nairobi International Convention on the Removal of Wrecks, 2007 (“the Convention") achieved the requisite number of ratifications (10) triggering the entry into force conditions. The Convention will enter into force in State Parties on 14 April 2015. The Convention provides a strict liability, compensation and compulsory insurance regime for States affected by a maritime casualty. It makes the registered owner of a ship liable for locating, marking and removing a wreck deemed to be a hazard in a State’s Convention area. Key definitions and terms employed in the Convention are explained at the end of this circular. Scope of the Convention There is provision in article 3(2) for a State Party to include the territorial sea within the scope of the Convention. So far three States (Bulgaria, Denmark and the United Kingdom) have extended the scope of the Convention to their territorial sea. In States which do not exercise this option, the Convention will apply in the exclusive economic zone but not the territorial sea. The International Group submitted a paper in April 2014 to the International Maritime Organisation Legal Committee reminding States that they may not avail themselves of the right of direct action conferred under the Convention to “wreck” incidents that occur in the territorial sea unless the scope of the Convention has been extended. Insurance requirements Registered owners of ships of 300 gross tonnage and over registered in a State party or entering or leaving a port in the territory of a State party, will need insurance cover arrangements which meet the requirements of the Convention and a certificate from a State party attesting that such insurance is in force. Such certificate must be carried on board at all times. The Wreck Removal Convention closely follows the strict liability and insurance provisions which currently apply to oil tankers under the Civil Liability Convention (CLC) and ships of 1,000 gross tonnage and over under the Bunker Convention. - 2 Certification and pooling of liability under certificates Following decisions taken by all Club Boards in the International Group, it has been agreed that Clubs will issue the required Wreck Removal Convention "Blue Cards", to enable Members to obtain Certificates from States Parties. Notwithstanding that Clubs in the International Group do not usually provide shipowners with primary P&I war risks cover, it has been further agreed that Clubs will pool all liabilities incurred under certificates issued, including otherwise excluded liabilities, up to, but not exceeding, the amount of the liability so certified. Policy defences and exclusions will continue to apply in the usual way in respect of liabilities arising otherwise than under Certificates. The Convention provides that for compulsory insurance purposes liability under Certificates shall not exceed the limits calculated in accordance with the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976), as amended by the 1996 Protocol. The Convention also provides an exclusion from liability for acts of war (the definition of war does not include terrorism) and for damage wholly caused by the intentional act of a third party. The Association will issue Blue Cards on condition that the Member agrees that where any payment by the Association under the certif