26 January 2000 TO ALL MEMBERS Dear Sirs TANKERS VOYAGING TO AND FROM THE UNITED STATES - 2000/2001 POLICY YEAR The Managers advised Members in the Association’s Circular 5:156 dated 27 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 last relevant Circular being 5:271 dated 20 January 1999, which detailed the arrangements to apply for the 1999/2000 Policy Year. This additional premium system will continue to apply for the 2000/2001 Policy Year. The new rates, which are significantly lower than for 1999/2000, are set out below. The Club’s cover for all tankers capable of carrying oil in bulk as cargo will continue to incorporate the following Exclusion Clause: “Excluding any and all claims in respect of oil pollution arising out of any incident to which the U.S. Oil Pollution Act 1990 is applicable”. The Exclusion Clause will apply unless Members agree before 20 February 2000 to undertake (1) to make quarterly declarations in arrears, at the latest within two months of the end of each quarter shown on the attached declaration forms, and (2) to pay the additional premium required in respect of voyages to or from the USA or to U.S. waters. However, requests from Members in previous years for the lifting of the Exclusion Clause will be treated as applying also to 2000/2001, and such Members need therefore take no action until the first declaration form is due to be returned, unless they wish the Exclusion Clause to be reinstated, in which case they should contact the Managers. Members should note: (a) the minimum tonnage threshold has been reduced from 3,000 g.t. to 1,000 g.t. (see ‘ii’ below); (b) special considerations will continue to apply to Parcel Tankers, which are defined as 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; - 2 (c) as for the last few years, vessels equipped with segregated ballast tanks (SBT’s) in accordance with the requirements of Regulation 13 of Annex 1 to MARPOL 73/78 will be surcharged at lower rates; (d) in all cases, the surcharge rate 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. Non-SBTSBT TankersTankers ‘i’Tankers of more than US$0.085US$0.075per gross ton, per 1,000 g.t.U.S. voyage ‘ii’Tankers of EitherUS$85US$75per U.S. voyage 1,000 g.t. or lessorUS$1,700US$1,500per annum ‘iii’Parcel Tankers carrying 5,000 m/t or less of US$255US$225per U.S. voyage persistent oil as cargo ‘iv’Parcel tankers carrying 5,001 to 10,000 m/t US$640US$560per U.S. voyage of persistent oil as cargo ‘v’Parcel Tankers carrying more than 10,000 m/t of US$0.085US$0.075per gross ton, per persistent oil as cargoU.S. voyage Otherwise the terms are unchanged, and the maximum charge or “cap” of 20 voyages