Julian Clark Global Senior Partner
Maritime legal exposure in a post-grain laundering landscape?
In this article, Ince and Windward jointly consider the new phenomenon of Russian grain laundering, and the legal exposure for the maritime industry.
As reported in several industry publications, Windward’s artificial intelligence (AI) driven insights showed that ship-to-ship (STS) transfers were being used to steal, and subsequently smuggle Ukrainian grain. This has prompted much discussion around the possible legal exposure and how concerned the market should be.
Following the recent decision of the International Group to restrict coverage for certain trades due to unclear and ambiguous guidance from the EU, there will be increased restriction of legitimate Russian trade. Unfortunately, the counterbalance to this will be a likely rise in illegal and illicit activity.
Dark activity (disabling the AIS) triggers an important alarm for the maritime industry, due to both safety and insurance concerns, as well as regulatory exposure as a result of the constantly changing and increasingly stringent sanctions against Russian entities, including individuals, companies, and vessels.
Participation in intentional dark activity not only raises a significant likelihood of violating sanctions, but also a likely breach of the requirements of the International Convention for the Safety of Life at Sea (SOLAS), as well as insurance and flag state requirements.
SOLAS permits an AIS transmitter to be turned off for safety and security reasons and similarly, the existence of shipto-ship (STS) operations does not automatically mean that sanctions have been breached, but these activities do arouse suspicion that the vessel in question might be engaging in illicit activities and breaching sanctions. At the very least, they serve as a red flag.
The full article can be viewed here:
Related news & insights
News / Ince celebrates one year since Scotland office opening
23-11-2022 / Insurance, Maritime, Real Estate
We are pleased to be celebrating one year since opening our first Scottish office in the city of Glasgow. Stefanie Johnston, dual-qualified Partner and Head of Scotland, has worked tirelessly over the last year to develop our offering through the opening of an Ince office in what is arguably an established Scottish market. Starting from the ground up, Stefanie and her team have successfully gained an admirable reputation in the region and further afield in the maritime, insurance, real estate and regulatory sectors.
News / Shipping E-brief November 2022
17-11-2022 / Maritime
The Shipping E-Brief is a publication providing you with key information on legal decisions and developments in shipping and related business areas.
News / Appeals from arbitration: is reform required?
15-11-2022 / Maritime
In September 2022, the UK Law Commission published a consultation paper with provisional recommendations for updating the Arbitration Act 1996 (the Act 1996). Amongst other things, the Law Commission considered whether any changes need to be made to: (i) s.67 of the Act 1996, which deals with jurisdictional challenges to arbitral awards; and (ii) s.69 of the Act 1996, which deals with appeals on points of law.
News / Owners not in breach of charter and entitled to claim demurrage
09-11-2022 / Maritime
CM P-MAX III Limited v. Petroleos Del Norte SA (MT Stena Primorsk)  EWHC 2147 (Comm) This recent laytime and demurrage dispute demonstrates that an owner can legitimately refuse orders where such orders may jeopardise the safety of a vessel.
News / Court of Appeal finds owner should have accepted non-contractual performance
09-11-2022 / Maritime
Mur Shipping BV v. RTI Ltd  EWCA Civ 1406 A majority of the Court of Appeal has held that the Owner under a contract of affreightment (COA) should have accepted payment of freight in Euros, rather than the US dollars provided for in the COA. Its refusal to do so meant that the Owner could not rely on the force majeure clause in the COA, in circumstances where US sanctions might have restricted US dollar transfers from or on behalf of the Charterer.
News / “Due” means due!
03-11-2022 / Maritime
Ceto Shipping Corporation v. Savory Inc (Victor 1)  EWHC 2636 (Comm) The Court in this case had to construe a purchase option clause in a bareboat charter. Specifically, it considered whether the fact that the charterer had not fulfilled certain payment obligations under the charter because it was disputing them in good faith meant that the owner was not obliged to transfer title to the vessel at the end of the charter period.