News: BIMCO releases new sanctions clauses for time and voyage charter parties
21 January 2020
Against a backdrop of geopolitical uncertainty and increasingly complex sanctions regimes, on 19 December 2019 BIMCO published two new sanctions clauses for use in time and voyage charter parties. The new clauses, together with their associated explanatory notes are available on the BIMCO website here and here, and also in the attachments on the right.
The new clauses combine and replace the previous Sanctions Clause for Time Charter Parties 2010 and the Designated Entities Clause for Charter Parties 2013. They are intended for use in all trades, with the exception of the container trade (a clause designed specifically for this trade is due to be released in early 2020).
Each of the clauses are designed to provide more certainty for owners and charterers regarding liabilities for sanctions risks, and BIMCO hope that their use will form part of the parties' due diligence policy. The clauses give an innocent party the right to terminate the charter party and claim damages in circumstances where their counterparty (or the third parties they are responsible for under the clause) are listed by a sanctioning authority or government and become subject to sanctions restrictions. Further to this, in circumstances where the trade or activity itself is or becomes subject to sanctions restrictions, owners have the right to refuse to proceed with the employment.
As with any standard clause, they may need to be amended to address specific sanctions risks identified by the parties as part of their sanctions risk assessment.
Please contact the author or your usual club contact for further information.