American Club Circular No. 26/11 1 SEPTEMBER 29, 2011 CIRCULAR NO. 26/11 TO MEMBERS OF THE ASSOCIATION Dear Member: IMO ISSUES REVISED GUIDELINES ON USE OF PRIVATELY CONTRACTED ARMED GUARDS In the wake of continued piracy attacks on international shipping and the rapid growth of private marine security companies, the International Maritime Organization (IMO), on September 16, 2011, issued a Revised Interim Guidance to Shipowners, Ship Operators and Shipmasters on the Use of Privately Contracted Armed Security Personnel (PCASP) on board vessels transiting high risk areas. These revised guidelines replace the IMO circular No. MSC 1405, which was attached to Club Circular No. 18/11 of June 3, 2011. A full copy of the IMO’s revised circular, designated as MSC. 1/Circ.1405/Rev. 1, is attached hereto for Members’ convenience. Your Managers strongly recommend that Members carefully review these comprehensive guidelines to ensure that, when making the difficult decision of whether to employ any PCASPs, all of the necessary steps and precautions are considered and assessed well in advance of engaging such services. As noted in its prior circulars on this subject, the IMO continues to stress that it is not endorsing the use of PCASPs, but merely recognizing the reality of the circumstances facing shipowners when contemplating fixtures that transit areas with a high risk for piracy. The revised IMO circular also stresses the need for owners to comply with the laws and regulations of the vessel’s flag state, as well as the laws and regulations of all port and coastal states where the vessel is expected to call, or through whose waters it may pass, during its contemplated voyage. Finally, the IMO notes that the latest version of Best Management Practices (BMP) – the latest version being BMP4 as set forth in Club Circular No. 22/11 of August 16, 2011 – should be followed, and the use of PCASPs should not be considered as a substitute for the implementation of BMP. Of particular note from a P&I perspective is the IMO’s recommendation that owners consult with their property and liability insurers prior to contracting with a PCASP provider, and before embarking any PCASPs, to assess whether such service agreements prejudice or otherwise impact on an owner’s existing insurance cover. Your Managers strongly endorse this recommendation. It is further suggested that the Club be consulted at least seven (7) days in advance of the expected embarkation of a PCASP. Such advance notice is needed in case any negotiations are required to revise the draft agreement with the PCASP provider. American Club Circular No. 26/11 2 In this regard, it should also be emphasized that, in addition to the IMO’s revised guidelines for the use of PCASPs, Members can access related American Club material on this subject. In this regard, Members are referred to the following sources: (1) the PowerPoint presentation entitled Locked and Loaded: What A Shipowner Needs to Know When Considering The Use of Armed Security Guards, which can be found in the “Publications” section of the American Club’s website under “Seminars” or through the following link: http://www.american-club.com/seminars/Locked%20and%20Loaded.pdf; (2) Club Circular No. 22/11 of August 16, 2011, which attaches a full copy of the latest version of Best Management Practices for protection against Somalia-based piracy (BMP4); and (3) Club Member Alert of March 31, 2011 regarding South African firearm regulations and thei