In light of the Notice of Action and Proposed Actions issued under the United States Trade Representative’s (USTR) Section 301 investigation into China’s targeting of the maritime, logistics, and shipbuilding sectors, BIMCO has received inquiries regarding potential implications for ship management agreements – particularly SHIPMAN – and whether additional contractual measures may be needed.
The Section 301 Proposed Actions set out potential trade restrictions and increased regulatory scrutiny focused on Chinese entities and interests in the maritime domain. These developments have understandably raised concerns among shipowners, charterers, and managers – particularly in cases where corporate structures involve Chinese interests.
BIMCO Response: Time Charter Clause issued, no SHIPMAN Clause planned
As part of its response, BIMCO has developed a USTR Clause for Time Charter Parties, which is intended to help allocate roles and responsibilities between owners and charterers in light of these developments.
At this stage, and drawing on input from the industry, BIMCO does not plan to develop a SHIPMAN clause specifically addressing the USTR’s Proposed Actions. The concerns raised appear to centre more on regulatory filings and operational procedures than on contractual relationships between owners and managers.
All parties – owners, charterers, and managers – share a common interest in reducing risk and avoiding unintended regulatory exposure. To mitigate such exposure, the parties can address this through close cooperation and clear communication when completing filings, particularly with respect to identifying the vessel operator.
Key Issue: COFR Registration and Form 1300 (Box 9)
The Proposed Actions targets the vessel operator, and states that that the vessel operator is the entity identified as the owner of vessel and whose name appears on the Vessel Entrance of Clearance Statement (CBP Form 1300) or its electronic equivalent. In turn, Block 9 of CPB Form 1300 identifies the Operator as the entity listed identifies the operator as listed on the Certificate of Financial Responsibility (Water Pollution) (COFR) – ie the party responsible for meeting US oil pollution liability and financial assurance requirements.
Where the ISM Manager is linked to China or Hong Kong, listing that entity in Box 9 may bring the vessel within the scope of the USTR Notice, even if the beneficial owner or charterer is the party more directly targeted by the Proposed Actions. Given the significant exposure at play, it is crucial that owners, charterers and managers identify and agree on the vessel operator for purposes of the Proposed Actions prior to any US call.
The risk is not only administrative in nature but may also raise compliance-related concerns under US regulations.
Conclusion
The USTR’s Proposed Actions under the Section 301 investigation mark a notable policy development with implications for maritime operations and regulatory compliance. That said, based on current feedback and observations, BIMCO does not see an immediate need to amend or supplement SHIPMAN through a dedicated clause.
Instead, we encourage members to stay informed and ensure proper administrative procedures – especially in relation to COFR filings and potential US regulatory exposure.
BIMCO will continue to follow this issue closely and remains open to further engagement with the industry. Should the regulatory environment evolve in a way that affects the contractual relationship under SHIPMAN, we will of course reconsider the need for guidance or additional contractual tools.
Related information
Contact Us
