Shipowner’s Risks in Ukrainian Ports
A lot of various incidents have been reported in the ports of Ukraine. The vessels calling the ports of Ukraine undergo numerous and serious perils. And we do not certainly mean perils of natural character. In the present publication we will try to cover some legal and operational risks foreign shipowners have to challenge in Ukraine.
Ship’s Stores and Bunker
Declaration of the ship’s stores has been treated with great attention as the Ukrainian customs strictly control the slightest differences between the declared stores and actual ship’s stores (including those for vessel’s own use). When found, such differences may entail heavy fines. A special attention should be paid to declaration of bunkers. Any slightest difference discovered during the inspection of the bunker upon the vessel’s arrival to a Ukrainian port may give grounds for the customs to charge the vessel for ‘concealing’ fuel and therefore imposing a substantial penalty. Such penalties may reach USD 10 000.
The exact quantity of the bunker not only in the tanks, but in other small capacities should count when declaring the bunker. Otherwise the Ukrainian customs can make allegations of your engagement in bunker smuggling with all “amenities” it implies.
It is extremely important to be as accurate as possible when making declarations of medicines stores/drugs/chemicals and cleaning products. Discovery of any quantity related to non-declared drugs containing narcotic substances may result in drugs smuggling charge.
Ballast waters. Whatever is infringement Fine is Large.
The slightest breach of the rules related to the ballast waters lead to the heavy fines. The Ukrainian authorities demand from the vessels to exchange the ballast in the Black Sea. The State Inspection for Protection of the Black Sea (based in Odessa as the branch of the State Ecology Inspection of the Ministry of Ecology and Natural Resources of Ukraine) constantly monitors the rules on ballast waters.
The Order of the Ministry of Public Health of Ukraine ‘On Approval of the State Sanitary Rules and Norms for the Vessels’ Release of Waste, Oil Contaminated, Ballast Waters and Wastes to the Water Basins’ No.199 dated 09 July 1997 reads:
‘4.4.5. The log book shall specify the geographical position, dates and quantity of the onboard ballast.
4.4.6. In the cases when the vessel has arrived to the port without re-ballasting in the sea and does not have equipment for the ballast waters, the vessel may be sent outside the territorial waters’.
The State Inspection for Protection of the Black Sea is authorized to sample the ballast waters for oil, iron and suspended organic materials. The admissible thresholds for the presence of pollutants are much lower than the requirements according to MARPOL. Oil and oil products as well as iron – 0.05 mg/l; suspended particles – max 0.2 mg/l. The fine for violation of such norms amounts to USD 60 000.
In order to minimize exposure to deballasting fines, vessels should strictly follow the requirements of the Inspection.
To avoid serious problems the trade restrictions must be noted that are introduced by the Government of Ukraine from time to time. In particular, it concerns grain trade (wheat, rye, barley and corn/maize).
Unfortunately, restrictions may be non-official and sometimes look just like administrative red tape. They can be introduced in the form of tariff restrictions or be of the administrative character, for example, a corresponding license may be required to export the grain. You’d better obtain all licenses beforehand and comply with other formalities established by the Government to avoid vessels’ detention in ports of Ukraine. It should be noted as well that the requirements of the Ukrainian Government are frequently changed.
Difficulties with the loading of iron ore concentrate
Pursuant to the SOLAS Convention the shipper should provide valid certificates stating that the moisture content as well as the transportable moisture content of the cargo is within the permissible limits. The port of Odessa is characterized by high humidity. The iron ore concentrate gets damp under such conditions that may negatively affect the safety of navigation and stability of the ship.
Loading of the iron ore may not be commenced till shippers provide certificates in accordance with the requirements of international standards. Masters of ships must demand further sampling from the independent surveyors if there is any uncertainty regarding non-compliance of the actual humidity of the iron ore with the certificate or certificate with the requirements of the international standards.
Oil pollution of the Ukrainian sea waters threatens with heavy fines. The amount of the fine is calculated under the theoretical formula, provided by the Method for Measuring the Damages suffered by the state due to breach of the legislation on protection and rational use of water resources approved by the Order of the Ministry of Environmental Protection and Nuclear Safety of Ukraine dated 18 May 1995 No.37, in compliance with the fixed tariffs. These tariffs are defined by the Resolution of the Cabinet of Ministers of Ukraine (the Government of Ukraine) No.484 dated 03 July 1995 as follows:
- oil and oil products – USD 329/kg;
- salt of heavy metal – USD 12 936/kg;
- organic substances – USD 270/kg;
- suspended solid particles – USD 132/kg;
- pesticides – USD 430/kg;
- detergents – USD 381/kg;
- sanitary sewage – USD 140/m3;
- garbage – USD 100/kg.
These norms are adopted in compliance with the Convention on Protection of the Black Sea against Pollution dated 21 April 1992.
Pursuant to the MARPOL:
- ‘A’ harmful substances – USD 1522/kg;
- ‘B’ harmful substances – USD 286/kg;
- ‘C’ and ‘D’ harmful substances – USD 54/kg.
Disputes on cargo shortage
The vessels carrying bulk cargo to Ukraine are often disputed in relation to the shortage of cargo. Such claims would cover up to 100-200 tons of shortage amounting to USD 100 000. It should be noted that the slightest shortage of cargo is fixed in Ukraine as opposed to other countries where the norm of the ‘paper’ shortage within 0.5 % exists. So the slightest shortage may serve as the ground to file a claim.
The following actions should be taken to minimize the risks related to the shortage of cargo:
- the holds to be sealed in the presence of surveyors representing all interested parties after completion of the cargo loading;
- if there are any damages to the seals the surveyors must be present in the port of discharge when the holds are opened;
- draught surveys should take place at the port of loading as well as before discharging the cargo;
- An ‘empty hold certificate’ should be issued. Such document shall be also signed by the supervisor of the stevedore company by request of the master.
Detention and arrest of the vessel and cargo
The harbor master of a sea port may and must not give the permission to sail in case the vessel does not fit for sailing due to the following:
- the requirements with regard to the cargo loading have not been adhered;
- vessels’ provision and manning do not comply with the norms;
- other deficiencies, the list of which is not exhaustive, that may be hazardous to the safety of navigation, health of the crew and natural environment;
- the shipping documents are not in order;
- the charges, fines and other statutory payments have not been paid;
- Relative decisions/ rulings of the authorized bodies are issued.
It is prohibited for the vessel to sail from the port till elimination of the circumstances that have caused such prohibition.
The vessel and the cargo may be detained by the order of the head of a sea port under the maritime claims by request of the person having such claim. Such detention is limited to 72 hours. The vessel shall be released if the maritime claim or arrest has not been secured.
Arrest of vessels is intended to secure maritime claims. Ukraine is not a party to the Convention for the Unification of Certain Rules Relating to the Arrests of Sea-Going Ships 1952, thus, the vessels can be attached in the ports of Ukraine not under the maritime claims only but under other violations or on suspicion in their commitment.
Ukraine is the state with a strict state control and ambiguous legal system which results in uncertainties, corruption and unpredictability. Thus, the general recommendation is that corresponding precautions, measures on prevention of infringement of the law and losses of the cargo during its carriage are exercised, as well as active intercourse with local agents and companies providing insurance, survey and other services, should be kept. In case of any doubts, it is always advised to resort to the local lawyers specialized in maritime & transport law, which may answer the questions specific to the jurisdiction.
Odessa Annual International Conference ‘Practice of Maritime Business: Sharing Experience’ has become an important floor for discussing hot issues of the maritime and transportation industry in the Black Sea region. Gathering about 150 delegates from many countries all over the world the forum has proved to be useful for lawyers and other professionals engaged in shipping. This year Conference, to be held on the topic of “CARGO”, will be focused on transshipment and carriage by sea of grain and bulk cargo.