New BIMCO Clause Clarifies Contractual Position on AIS Switch-off

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BIMCO has published a new charter party clause to help tackle potential abuse by sanctions busters of the Automatic Identification System (AIS) which is mandatory for all ships to use under regulations for the Safety of Life at Sea (SOLAS).

AIS Switch off

Switching off the AIS is a common way of “busting” sanctions prohibiting trade with certain countries, as it reduces the likelihood of the vessel’s location becoming known.

SOLAS requires AIS to not be switched off or disabled at any time other than for very specific safety and security reasons permitted by the regulations, such as avoiding detection by pirates in high-risk areas.

As such, the new BIMCO clause addresses not only the use of the AIS during the charter party but also prior to the contract.

Shipping advisory publication

The clause recognizes that there may be legitimate reasons for the interruption of a ship’s AIS signal, so for a charterer to terminate the charter party for a breach of the SOLAS Guidelines on use of AIS by an owner, the charterer will have to prove that there was intent by the owner to hide the signal.

The move follows publication of a shipping advisory on sanctions issued by the US Office of Foreign Assets Control (OFAC) in 2020, which recommended that the shipping industry should develop contractual provisions “in the form of an AIS ‘switch-off’ clause”.

The intention was that the clause would allow shipowners, charterers and operators to terminate collaboration with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS”.

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Source: BIMCO

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