a gavel and nameplate with the word "Sanctions" on a desk

24 Feb Sanctions against Russia: Check your counterparts and contracts

Published: 24 February 2022

With sanctions imposed on Russian interests by the EU, UK, US and others, it is crucial that shipowners and operators check their counterparts and contracts immediately.

The situation is currently changing rapidly, and more sanctions announcements could be on the way.


Specially Designated Nationals and Blocked Persons (“SDN Lists”)

It is not sufficient to check that the companies you are doing business with are on the SDN lists – vessels and entities indirectly owned 50 percent or more in aggregate by one or more persons on the SDN List are also covered by sanctions.

Under EU sanctions regulations, an entity or vessel is deemed to be designated by reason of the fact that it is directly or indirectly owned or controlled more than 50 percent by an entity or person that is designated, or by an entity or person which has a majority interest in it that is in turn controlled by a designated entity.

That is why it is crucial to conduct a thorough check on the entire ownership structure. We recommend using service providers who can perform these checks.

Non-US companies transacting with Russian entities will generally not fall under US jurisdiction but be aware that if payments are made in US dollars, this will trigger US jurisdiction in the event of secondary sanctions.

Practical steps to take immediately

  • Take action immediately; do not wait and expect the situation to improve.
  • Check your counterparts not only on shipments coming from or going to Russia but also where there is a Russian element in the transaction.
  • Check your contracts to see whether you have solid and valid sanctions clauses that give you the right to reject orders and to terminate a charter party.
  • Use the BIMCO sanctions clauses from now on in all charter parties you fix:

Sanctions_Clause_for_Container_Vessel_Time_Charter_Parties_2021

Sanctions_Clause_for_Time_Charter_Parties_2020

Sanctions_Clause_for_Voyage_Charter_Parties_2020

  • If you identify a sanctions issue, contact your P&I club and obtain legal advice from qualified sanctions lawyers.

See BIMCO’s Nina Stuhrmann explaining why you should use BIMCO’s sanctions clauses:

 

 

Nina Stuhrmann

CONTACT BIMCO

Nina Stuhrmann

Manager, Contracts & Clauses

Copenhagen, Denmark