Flag states should cancel Russian vessel certificates if sanctions block payout, IMO rules
Legal committee of UN agency advises checks to ensure impacted ships can still meet obligations
‘Economic sanctions may in some cases restrict insurers or other financial security providers from processing claims or prohibit payment of claims arising under conventions,’ says legal committee
FLAG states must ensure that Russian vessels certified for insurance or financial security purposes can still pay out despite the sanctions the country faces because of its invasion of Ukraine.
The advice from the International Maritime Organization’s legal committee comes amid reports that some P&I clubs have dropped cover on Russian ships.
West of England said that it has axed cover for two of the five Russian-financed ships specifically singled out by the US because of links with Promsvyazbank-affiliated PSB Leasing.
The vessels have been named as FESCO Magadan (IMO: 9287699) and FESCO Moneron (IMO: 9277412), both Russia-flag 800 teu feeders built in 2003.
There are also unconfirmed reports that two other International Group clubs have withdrawn cover from some Sovcomflot ships.
A circular from the committee points out that several relevant liability and compensation treaties entail that flag states issue certificates attesting that insurance or other financial security which meets the requirements of the conventions is in force.
“Economic sanctions may in some cases restrict the insurers or other financial security providers from processing claims or prohibit the payment of claims arising under these conventions,” the IMO said.
In particular, flag or certifying states issuing certificates based on Russian insurers or Russian financial security providers should verify that the coverage meets applicable guidelines on the acceptance of documentation from insurance companies for specified treaties.
Port states encountering certificates involving Russian insurers or financial security providers should consult with the issuing or certifying state, which is responsible for ensuring that the insurance or financial security remains adequate.
Where issuing they receive notification of termination of the insurance or other financial security, they should terminate the certificates.
Conventions that could be applicable in this context include the 1969 Civil Liability Convention, the 1992 Civil Liability Convention, the 2001 Bunkers Convention, the 2007 Nairobi International Convention on the Removal of Wrecks and the 2002 Athens Protocol.
