CUS NEWS REPORT FOR WEEK 10 OF 2024

LOCAL NEWS

1. Event in Athens marks 60 year anniversary of Cyprus Ship Registry

On 5^th March 2024, the Cyprus Registry marked its 60th anniversary of participation in global shipping activities, highlighting its journey towards becoming a key player through a strategy focused on responsible and sustainable growth. Celebrated at the Grande Bretagne Hotel in Athens, Greece, the event underscored the strong connection between the Greek and Cypriot maritime sectors, while the Shipping Deputy Minister, Mrs. Hadjimanolis, expressed to the Greek shipping leaders her deep appreciation for their steadfast support. The gathering was attended by numerous Greek shipowners, who have been instrumental in enhancing the Cypriot shipping network, highlighting the strong ties between the two naval communities.

The event provided a historical overview of the Registry's evolution and delved into the advantages of Cyprus as a Flag State in maritime shipping. The Minister also highlighted the vision, objectives, and priorities set by the Deputy Ministry of Shipping. Mrs. Hadjimanolis concluded her speech by acknowledging the significant contributions of the veterans of Cyprus Shipping and the unwavering support of the Cyprus Union of Shipowners and conveying her vision for a sector sustained by decades of commitment and ready for future success due to the passion and perseverance of the Cyprus Shipping Community.

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2. 7th Annual Capital Link Cyprus Shipping Forum

On 27 February 2024 the 7th Annual Cyprus Shipping Forum Capital Link was held in Limassol, under the auspices of the Shipping Deputy Ministry of Cyprus in cooperation with the Cyprus Union of Shipowners, which was also the Lead Sponsor. The event featured a compelling agenda including panel discussions with the participation of major stakeholders from Cypriot and global shipping. Having already been established as a meeting point of the global shipping industry, this year's Conference aimed to provide a comprehensive review of critical developments, challenges, and perspectives of the shipping industry worldwide. The shipowners panel hosted major figures in the industry, in particular, Ms. Semiramis Paliou, CEO - Diana Shipping (DSX); Chairperson – HELMEPA; Chairperson – INTERMEPA, Mr. George Mouskas, CEO - Olympia Ocean Carriers / Zela Shipping, Mr. Polys Hajioannou, CEO - Safe Bulkers (SB), Mr. Petros Pappas, CEO - Star Bulk Carriers (Star Bulk).

Relevant Link:

Capital Link 7/3 - 7th Annual Capital Link Cyprus Shipping Forum

INTERNATIONAL NEWS

3. Marine Environment Protection Committee (MEPC), 81st session on 18-22 March 2024

The 81^st Session of the Marine Environment Protection Committee is to be held from Monday, 18 March to Friday, 22 March 2024 at IMO Headquarters, 4 Albert Embankment, London SE1 7SR.

The strategy and overall policy direction can be summarised as follows:

The IMO’s Mid Term Strategy envisages a combination of “technical” and “economic” measures to achieve those goals.
The “technical” GHG Fuel Standard measure, a marine fuel standard limiting marine fuel’s GHG emissions, appears to have wide support at the IMO.
“Economic” measures – penalties for using fossil fuel and rewards when avoiding emissions, are more controversial.
In concept the proposed basket of technical and economic regulations is no different from the EU’s combination of the Emission Trading System (ETS) mechanism (economic) and ‘FuelEU Maritime’ (technical).

It is also accepted that economic measures are needed in addition to the GHG Fuel Standard to accelerate the reduction in GHG emission fuels, and to ensure a ‘critical mass’ is achieved in the production and use of low emission fuels.

A number of papers for consideration at MEPC 81, from both governments and Non-Government Organisations, put forward a variety of economic measures, intended to apply in parallel with a Fuel Standard technical measure.

All proposals have as their objective providing a financial incentive for shipping lines to use low GHG fuels by balancing the cost of these fuels vs high GHG emission fuels.

Ahead of the MEPC Meeting, BIMCO, along with the governments of Bangladesh, India, Norway, Pakistan and the International Chamber of Shipping (ICS), has submitted a paper asking the MEPC for more legal certainty, as well as clarification and assurance that shipowners and parties operating in compliance with the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships – due to enter into force on 26 June 2025 – will not be sanctioned for violating the terms of another UN convention, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal.

According to BIMCO, already in some jurisdictions, contravention of the Basel Convention, as applied to ship recycling, has resulted in sanctions against shipowners and masters.

Furthermore, ahead of MEPC 81 and IMO’s Intersessional Working Group on Reduction of GHG Emissions from Ships (IMO, IWSG-GHG-16, March 11-15) the Clean Shipping Coalition is calling on the IMO to take action in three key areas, namely Tracking and Measuring Energy Efficiency, Global Fuel/Energy Standards and Equitable Implementation of a Pollution Fee.

Relevant Links:

4. Death toll rises as Houthis inflict first fatal missile strike

Houthi rebels have struck their first fatal blow in their months-long campaign against commercial shipping after a missile strike started a fire on board a bulk carrier in the Gulf of Aden.

On the 6^th March 2024, the US Central Command confirmed that the death toll had risen to three crew members after the attack on the Barbados-flagged vessel True Confidence.

The International Shipping Community reacted to the fatal attack on True Confidence.

In particular, IMO Secretary-General Arsenio Dominguez issued a statement expressing his sadness and extending his condeolences for the loss of lives of innocent seafarers.

Stephen Cotton, General Secretary of the International Transport Workers’ Federation (ITF) stated that “our hearts ache for the families and loved ones of the seafarers who lost their lives and were injured in this horrific attack…we have consistently warned the international community and the maritime industry about the escalating risks faced by seafarers in the Gulf of Aden and Red Sea”.

In a joint industry statement, BIMCO, International Chamber of Shipping (ICS), INTERCARGO, INTERTANKO, IMCA, European Community Shipowners Association (ECSA), Intermanager and OCIMF expressed their deep concern over the tragic loss of life and injuries suffered by the crew of MV True Confidence, pointing out that the frequency of attacks on merchant shipping highlights the urgent need for all stakeholders to take decisive action to safeguard the lives of innocent civilian seafarers and put an end to such threats.

According to Reuters, the cost of insuring a seven-day voyage through the Red Sea has risen by hundreds of thousands of dollars since November.

War risk insurance rates have already reflected the sinking of the Rubymar cargo ship, days after being hit by a Houthi missile on Feb 18, and the first fatalities from the True Confidence, said Munro Anderson, head of operations at marine war risk and insurance specialist Vessel Protect – part of Pen Underwriting.

"So, the degree to which they create any further upwards pressure is likely to be limited in the short term," he said.

"This is, however, predicated on how events evolve from this point forward."

Relevant Links:

Reuters 7/3 - Ship evacuated after first civilian fatalities-houthis red sea attacks

Attachment 1: Tradewinds 8/3 - Death toll rises as Houthis inflict first fatal missile strike

5. Deadline to implement “no Russia clause” under the EU’s 12th package.

Several organizations, experts and legal advisors have recently issued guidance on the impact of the requirement for exporters and suppliers to third countries of certain goods restricted under EU’s 12th package of measures against Russia (article 12g of Regulation 822/2014) to insert what has been termed a "no re-export to Russia" clause into both new and existing agreements.

The above – mentioned experts point out that, under article 12g and the FAQ’s issued by the EU in relation to the 12^th package, contracts concluded from 19 December 2023 onwards must contain the ‘no re-export to Russia’ clause as of 20 March 2024.

The EU Guidance provided an example of a clause which meets the requirements of Article 12g, which states that the Importer/Buyer shall not sell, export or re-export, directly or indirectly, to the Russian Federation or for use in the Russian Federation any goods that fall under the scope of Article 12g of Council Regulation (EU) No 833/2014.

The Importer/Buyer shall undertake its best efforts to ensure that such a provision is not frustrated by any third parties further down the commercial chain, including by possible resellers, and any violation shall constitute a material breach of an essential element of the Agreement.

Experts explain that this clause is intended as guidance only and parties are nevertheless free to decide on their own appropriate wording as long as the clause meets the requirements of Article 12g. Furthermore, the clause should in any event be carefully reviewed within the context of the relevant governing law of the contract,

However, Article 12g applies to all agreements concluded on or after 19 December 2023 and EU Persons must incorporate the "no re-export to Russia" clause into such agreements by 20 March 2024. Additionally, EU Persons must, by 20 December 2024, incorporate such a provision into agreements that were concluded before 19 December 2023.

This means that all pre-existing agreements falling within the scope of Article 12g must be amended to incorporate the "no re-export to Russia" clause within the timeframes stipulated.

The EU Commission takes a broad interpretation of what constitutes a "new" agreement i.e. "concluded" after 18 December 2023. For example, amendments and restatements or other forms of tacit or explicit extension of pre-19 December 2023 agreements are treated as separate, post-18 December 2023 agreements which must include the "no re-export to Russia" clause by the earlier 20 March 2024 date.

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CUS NEWS REPORT FOR WEEK 10 OF 2024