- BIMCO Issues Time Charter Clause, Rules Out SHIPMAN Clause.
- COFR Registration and Form 1300 at the Core of Proposed Actions.
- Chinese-Linked ISM Managers Pose Compliance Risks.
The United States Trade Representative (USTR) has launched a Section 301 investigation into China’s involvement in the maritime, logistics, and shipbuilding industries. This has sparked concerns about how it might affect ship management agreements, especially the SHIPMAN framework, and whether changes to contracts will be needed. The Proposed Actions could lead to trade restrictions and increased scrutiny of Chinese companies, which has shipowners, charterers, and managers with ties to China feeling uneasy, reports Bimco.
BIMCO’s Response: Time Charter Clause, No SHIPMAN Clause
In response, BIMCO has crafted a USTR Clause for Time Charter Parties to clarify the roles and responsibilities of owners and charterers. However, BIMCO has made it clear that they won’t be introducing a SHIPMAN clause at this time. Feedback from the industry indicates that the main issues are more about regulatory filings and operational processes than about the contractual ties between owners and managers. Instead, BIMCO encourages owners, charterers, and managers to collaborate closely to reduce risks and prevent any unintended regulatory issues, especially when it comes to filing documents related to vessel operations.
Central Issue: COFR Registration and Form 1300 (Box 9)
The Proposed Actions are particularly focused on the vessel operator. According to the USTR, the operator is the entity listed as the vessel’s owner on the Vessel Entrance or Clearance Statement (CBP Form 1300) or its electronic version. Notably, Box 9 of the CBP Form 1300 identifies the operator as the party named on the Certificate of Financial Responsibility (Water Pollution) (COFR), which ensures compliance with U.S. oil pollution liability and financial assurance requirements.
Risks of Chinese-Linked ISM Managers
When an ISM Manager linked to China or Hong Kong appears in Box 9, it could mean that the vessel falls under the USTR Notice, even if the beneficial owner or charterer is the primary target. This situation poses significant risks for everyone involved. To reduce these risks, owners, charterers, and managers must identify and agree on who will operate the vessel before any calls to US ports.
Compliance and Operational Implications
The potential risks go beyond just administrative issues; they could raise broader compliance concerns under US regulations. As regulatory scrutiny increases, all parties need to work together to ensure that filings are accurate, roles are clearly defined, and the risk of unintended sanctions is kept to a minimum.
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Source: Bimco
