Sanctions Clause for Time Charter Parties 2020

Overview

The sanctions landscape has grown increasingly complex since BIMCO published its Sanctions Clause for Time Charter Parties in 2010. International sanctions regimes are constantly changing with new restrictions being added and new persons and entities being listed. A violation of sanctions restrictions can have severe consequences and in the worst cases can lead to parties being listed as sanctioned parties. Therefore, carefully worded sanctions clauses in charter parties and other contracts are vital for internationally trading companies to help them manage and mitigate their sanctions risk and to enable them to continue to do business while remaining compliant with the various sanctions regimes.

This clause is intended for use in all trades except for container trades. A separate sanctions clause for the container trades is under development.

This clause was published on 19 December 2019. It replaces the Sanctions Clause for Time Charter Parties 2010 and the Designated Entities Clause for Charter Parties 2013 (which have been combined to make a new single clause for ease of incorporation).

BIMCO Sanctions Clause for Time Charter Parties 2020*

(a) For the purposes of this Clause:

“Sanctioned Activity” means any activity, service, carriage, trade or voyage subject to sanctions imposed by a Sanctioning Authority.

“Sanctioning Authority” means the United Nations, European Union, United Kingdom, United States of America or any other applicable competent authority or government.

“Sanctioned Party” means any persons, entities, bodies, or vessels designated by a Sanctioning Authority.

(b) Owners warrant that at the date of this Charter Party and throughout its duration they, the registered owners, bareboat charterers, intermediate disponent owners, managers, the Vessel and any substitute are not a Sanctioned Party.

(c) Charterers warrant that at the date of this Charter Party and throughout its duration they and any subcharterers, shippers, receivers and cargo interests are not a Sanctioned Party.

(d) If at any time either party is in breach of subclause (b) or (c) above then the party not in breach may terminate and/or claim damages resulting from the breach.

(e) Charterers shall not give any orders for the employment of the Vessel which involves a Sanctioned Party or a Sanctioned Activity.

(f) If the Vessel is already performing an employment which involves a Sanctioned Party or is a Sanctioned Activity, without prejudice to any other rights that may be available in subclause (d) above, Owners shall have the right to refuse to proceed with the employment and Charterers shall be obliged to issue alternative voyage orders within forty-eight (48) hours of receipt of Owners’ notification of their refusal to proceed. If Charterers do not issue such alternative voyage orders Owners may discharge any cargo already loaded at any safe port or place (including the port or place of loading). The Vessel shall remain on hire throughout and Charterers shall be responsible for all additional costs and expenses.

(g) If in compliance with subclause (f) above anything is done or not done, such shall not be deemed a deviation, but shall be considered due fulfilment of this Charter Party.

(h) Charterers shall indemnify Owners against any and all claims brought by the owners of the cargo and/or the holders of bills of lading, waybills or other documents evidencing contracts of carriage and/or subcharterers against Owners by reason of Owners’ compliance with such alternative voyage orders or discharge of the cargo in accordance with subclause (f) above.

(i) Charterers shall procure that this Clause shall be incorporated into all sub-charters and bills of lading, waybills or other documents evidencing contracts of carriage issued pursuant to this Charter Party.

* This clause is not suitable for use in the container trades.

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