International shipping association BIMCO is working on a charter party clause to help tackle potential abuse by sanctions busters of the automatic identification system (AIS) which is mandatory for all ships to carry under SOLAS.
AIS transmits information about a ship including its identity and position. It should not be switched off or disabled at any time other than for very specific safety and security reasons permitted by the regulations, such as avoiding detection by pirates in high risk areas.
In May 2020 the US Office of Foreign Assets Control (OFAC) issued a shipping advisory on sanctions which recommended that the shipping industry should develop contractual provisions in the form of an AIS “switch off” clause. The intention was that the clause would allow shipowners, charterers and operators to terminate work with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS”.
BIMCO’s concern is that some charterers may, in their haste to be sanctions compliant, develop their own AIS “switch off” clauses that might expose owners to the risk of being terminated even when the AIS has been switched off for legitimate reasons, or the signal has failed to transmit or be received for reasons outside the owners’ control.
The new BIMCO clause will address not only the use of the AIS during the charter party but also prior to the contract. This is important because the OFAC guidelines are focused on identifying patterns in AIS manipulation by ships rather than isolated one-off incidents. The clause recognises that there may be legitimate reasons why the ship’s AIS signal has been interrupted.
The new clause is targeted for publication in May.