JANUARY 26, 2011 CIRCULAR NO. 05/11 TO MEMBERS OF THE ASSOCIATION Dear Member: FINANCIAL SECURITY IN RESPECT OF POLLUTION: CHARTER PARTY CLAUSE In 1990, in response to prospective oil pollution legislation in the United States, a recommended pollution charterparty clause was circulated to Members with the advice that owners should not warrant in charterparties that they would comply with future unforeseen requirements regarding certificates of financial responsibility for oil pollution. An amended clause for inclusion in charterparties of tankers was circulated in 1996 to reflect the 1992 Protocol to the Civil Liability Convention and the requirements concerning certification in the US Oil Pollution Act of 1990 (OPA 90). These clauses were updated again and combined in a new single charterparty clause in 2008 to reflect the entry into force of the Bunkers Convention. The clause has been further updated to remove potential uncertainties in regard to the scope of charterers’ indemnity under the clause, in particular in respect of the consequences of non-compliance with financial security requirements and also the rights and liabilities of the parties in the event of the owner agreeing to meet them. The updated clause also addresses prospective enforcement of the recent amendment to the financial responsibility provisions of OPA 90 by means of the US Coast Guard Authorization Act of 2010. This act, which was signed into law on October 15, 2010, extends the financial responsibility provisions of OPA 90 to “any tank vessel over 100 gross tons using any place subject to the jurisdiction of the United States.” Currently, these requirements apply only to vessels over 300 gross tons using any place subject to the jurisdiction of the US (except non-self-propelled vessels that do not carry oil as cargo or fuel) and vessels using the exclusive economic zone to transship or lighter oil destined for a place subject to the jurisdiction of the United States. The International Group has been informed by the US National Pollution Funds Center (NPFC) – an agency of the United States Coast Guard – that a further implementing regulation is necessary before the US will require compliance with these extended financial responsibility provisions, and that this is likely to be issued in the coming months. The enforcement of the extended financial responsibility provisions of OPA 90 at a future date is addressed in the wording of the updated clause contained in the Annex to this Circular. The International Group will continue to engage with the NPFC and will provide a further update to Members as soon as the regulation is issued and the enforcement date is known. While the updated clause does not add to the current obligations in relation to certification, Members should continue to make sure that their vessels carry on board such certificates as are required under paragraph 1 of the clause. Members should start using the clause in all new charterparties. Yours faithfully, Joseph E.M. Hughes, Chairman & CEO Shipowners Claims Bureau, Inc., Managers for THE AMERICAN CLUB All Clubs in the International Group of P&I Clubs have issued similar circulars. ANNEX TO CIRCULAR NO. 05/11 OF JANUARY 26, 2011 Financial Security In Respect Of Pollution 1. Owners warrant that throughout the currency of this charter they will provide the vessel with the following certificates: (a) If the vessel is over 1,000 gross tons and is registered in, or is required to enter a port or offsh