BIMCO has published a new charter party clause to tackle potential abuse of the automatic identification system (AIS) by ships seeking to avoid detection
This clause is intended to prevent shipowners from switching off AIS to hide illegal activities such as breaking trade-prohibiting international sanctions or dumping waste at sea.
Vessels are expected to keep their AIS switched on at all times under SOLAS guidelines, except for legitimate safety and security reasons, such as for avoiding detection by pirates in high-risk areas.
However, some ships have switched off their AIS transmissions to avoid compliance with sanctions prohibiting trade with certain countries.
AIS is recognised as a key aid to safe navigation as it transmits vessels’ identity, position, status and intended arrival at port. It is used for collision avoidance, maritime security, vessel optimisation and trade analysis.
In 2020, the US Office of Foreign Assets Control (OFAC) issued a shipping advisory on sanctions, which recommended the shipping industry should develop contractual provisions to prevent vessels switching off their AIS.
The intention of an AIS switch-off clause would allow shipowners, charterers and operators to terminate collaboration with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS”.
BIMCO developed an AIS switch-off clause as a reaction to OFAC’s call and because it was concerned some charterers may, in their haste to be sanctions compliant, develop their own AIS switch-off clauses.
It was worried this might expose owners to the risk of contracts 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 an owner’s control.
BIMCO’s new clause addresses not only the use of the AIS during the charter party but also prior to the contract. This clause recognises there may be legitimate reasons for the interruption of a ship’s AIS signal and a charterer may want to terminate the charter party for a breach of the SOLAS guidelines on use of AIS by an owner.
In these cases, the charterer would have to prove there was intent by the owner to hide a vessel’s AIS signal.
BIMCO’s AIS Switch Off Clause for Charter Parties is available for download and includes explanatory notes.
A team of experts led by MSC general counsel Frank Sanford assisted BIMCO in drafting the clause. Drafting team members were AP Moller-Maersk senior legal counsel Jeff Nielsen, MSC head of compliance Amelie Acena, Norden’s Flemming Dahl Jensen, Oceanfleet Shipping solicitor Nicola Ioannou, North P&I director Mark Church, Crowell & Moring partner Michelle Linderman and David Wolff
BIMCO secretariat support was provided by Grant Hunter, head of contracts and clauses and Nina Stuhrmann, manager for contracts and clauses.
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