Sanctions Clause for Voyage Charter Parties 2020

Overview

The sanctions landscape has grown increasingly complex since BIMCO published its Sanctions Clause for Time Charter Parties in 2010 and the Designated Entities Clause for Charter Parties in 2013. 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.

The absence of a standard BIMCO sanctions clause for voyage charter parties has resulted in owners and charterers amending the BIMCO Sanctions Clause for Time Charter Parties or drafting bespoke clauses. BIMCO has therefore developed this sanctions clause for use in voyage charter parties so that there is an industry standard clause. It is intended to provide a balanced allocation of the risks posed by sanctions as between owners and charterers.

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 is a sanctions clause that also covers issues related to designated entities previously found in BIMCO’s Designated Entities Clause for Charter Parties 2013. This new sanctions clause should be used instead of the old Designated Entities Clause.

BIMCO Sanctions Clause for Voyage 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) If performance of this Charter Party involves a Sanctioned Party or a Sanctioned Activity, without prejudice to any other rights that may be available in subclause (d) above:

(i) if loading has not commenced, Owners may cancel this Charter Party; or

(ii) if the voyage or the loading has commenced, Owners may refuse to proceed and discharge any cargo already loaded at any safe port or place of their choice (including the port or place of loading) in complete fulfilment of this Charter Party,

provided always that if this Charter Party provides that loading and/or discharging is to take place within a range of ports or places that do not involve a Sanctioned Party or a Sanctioned Activity, Owners must first request Charterers to nominate an alternative port or place and may cancel the Charter Party or refuse to proceed on the voyage only if such nomination is not made within forty-eight (48) hours after the request.

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

(g) 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 delivery of the cargo in accordance with subclause (e) above.

(h) 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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