A merican Club Circular No. 30/18 1 AUGUST 10, 2018 CIRCULAR NO. 30/18 TO MEMBERS OF THE ASSOCIATION Dear Member: MARITIME LABOR CONVENTION 2006 AS AMENDED (MLC) – FREQUENTLY ASKED QUESTIONS (FAQS) – RECENT UPDATE Reference is made to previous Circulars in regard to the Maritime Labor Convention 2006 as amended (MLC). Your Managers are pleased to report that the International Group of P & I Clubs has recently updated the content of the Frequently Asked Questions (FAQs) section on the MLC on its website, a copy of which is attached hereto. It is also being posted on the American Club’s own website. It is hoped that the attached update is helpful to Members. However, if further elaboration or explanation is required, your Managers will be pleased to respond. Yours faithfully, Joseph E.M. Hughes, Chairman & CEO Shipowners Claims Bureau, Inc., Managers for THE AMERICAN CLUB 1 Version 10.08.18 MARITIME LABOUR CONVENTION 2006 AS AMENDED (MLC) FINANCIAL SECURITY REQUIREMENTS International Group FAQs for Members IMPORTANT NOTE: The entry into force of the 2014 amendments to MLC on 18 January 2017 raised a number of complex and novel questions. These FAQs are intended to provide guidance to assist Members and Clubs in complying with the amendments. While efforts have been made to provide clarity, uncertainty remains on some aspects of the financial security requirements. There may also be differences in the way some states implement and enforce the amendments. These FAQs should not be regarded as providing definitive legal advice and Members should also consult their flag state authorities. Members should refer to their Club’s website for details of the MLC financial security certificate application process and an explanation of the terms on which MLC certificates can be issued. Incidentally, point 3 of the amended Standard A2.5.2 states that the “financial security system may be in the form of a social security scheme or insurance...”. Where we have used the term “insurance” in these FAQs the term may generally also be read as “financial security”, and “financial security” may be read as “insurance”. CERTIFICATION 1 What Certification is required? From 18 January 2017, all ships which are subject to MLC have been required to carry and display on board two certificates confirming that financial security is in place for: (a) shipowners’ liabilities for repatriation of crew, essential needs such as food, accommodation and medical care and up to four months’ outstanding contractual wages and entitlements in the event of abandonment (Regulation 2.5, Standard A2.5.2 Paragraph 9) (b) contractual payments for death or long-term disability due to an occupational injury, illness or hazard set out in the employment agreement or collective agreement (Regulation 4.2, Standard A4.2.1 paragraph 1(b)). 2. Which ships need Certificates? Ships will require MLC certificates if they are: - registered in a State where MLC is in force, or - calling at a port in a jurisdiction where MLC is in force 2 Details of States which are party to MLC can be found in the MLC Database maintained by the International Labour Organisation (ILO). 3. Which categories of ship does the MLC apply to? The MLC definition of a ship is very wide: “a ship other than one which navigates exclusively in inland waters or waters within, or closely adjacent to, sheltered waters or areas where port regulations apply” 1 . Ships only operating domestically in coastal waters may therefore not need fin