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Thursday, 02 January 20
SULPHUR 2020 COMPENDIUM - HOW ARE INDIVIDUAL PORT STATES EXPECTED TO REACT? - STANDARD CLUB
 KNOWLEDGE TO ELEVATE
With the new sulphur limits soon to be in force, Standard Club has been investigating the ways in which certain jurisdictions are expected to react to violations.
We contacted our local correspondents from a variety of different ports, including Brazil, China, Denmark, Norway, Panama, Spain and Sweden, to build a compilation of what we believe is useful and practical knowledge for dealing with future sulphur claims.
We asked our correspondents the following series of questions:
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Will compliant bunkers be available in your jurisdiction?
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Which government body or organisation issues fines for sulphur violations?
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What is the estimated potential value of fines?
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Is there a possibility of criminal action for sulphur violations?
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Can a ship be detained for violations? If so, will a club LOU be accepted to secure its release?
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Is it possible to appeal fines?
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What contingency measures are available for ships carrying non-compliant fuel?
The answers to these questions are as follows. If you have questions about any of these jurisdictions, or any jurisdictions which are not listed below, please contact your usual claims handler at the club for further assistance.
Brazil
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Compliant bunkers will be available in Salvador, Sao Luis, Belem and Macapa.
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Fines may be issued by the ANP, IBAMA (the Environmental Authority) or the Harbour Master´s Office at each port.
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The estimated potential fines range from BRL 5,000 to BRL 2,000,000.
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There is a possibility of criminal action for sulphur violations in Brazil.
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A ship may be detained for sulphur violations until it is proved that there are bunkers within specification on board. Acceptance of a club LOU will depend on each individual case.
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It is possible to appeal fines.
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In the event of non-compliance, the Authorities will need to verify that the off-spec bunkers have been segregated on board.
China
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Compliant bunkers should be available in China. However, members should check with local agents and the port authority before calling to confirm availability.
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The local marine authority (the MSA) issues fines for sulphur violations.
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According to the PRC Air Pollution Prevention and Control Law, shipowners may face administrative penalties ranging from RMB10,000 to RMB100,000.
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While this is unlikely, there is a possibility for criminal action in the event of serious violations.
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Ships can be detained, depending on the seriousness of the violation. It is not known whether a club LOU would be accepted.
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Appeals of fines are unlikely to be successful if a violation has in fact occurred. However, owners may apply for a review of the fine if they suspect that the administrative procedures have been incorrectly applied (i.e. there has been no violation).
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From 1 January 2020 if a ship is unable to obtain compliant bunkers she should submit a FONAR to the MSA before entering Chinese waters. From 1 March 2020 if a ship is carrying non-compliant bunkers in Chinese waters they can discharge the non-compliant bunkers, or (subject to MSA approval) retain the non-compliant bunkers on board after providing a letter of commitment not to use these bunkers in Chinese waters.
Denmark
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Compliant bunkers will be available in Denmark.
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The Port State Control and the police both administer fines for sulphur violations.
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Fines for non-compliance can range from DKK 30,000 to DKK 300,000.
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Criminal action may in some cases be brought for non-compliance. Fines are imposed by the police, following penalty proceedings and public court hearings. In cases of gross negligence, or of continuous violation of the sulphur cap, there is the possibility of imprisonment for up to two years.
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A ship can be detained until it has taken the necessary steps to ensure compliance with the sulphur content regulations. Club LOUs will not be accepted to secure release of the ship.
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Fines can be appealed through the usual judicial channels (at the Court of Appeal and potentially at the Supreme Court).
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If the ship is not compliant with the sulphur regulations, it will be asked by officials to demonstrate that it has taken adequate steps to be compliant. The owner will have to demonstrate that they have established procedures on board the ship to ensure compliance. The owner will also have to provide documentation showing their attempts to obtain compliant bunkers.
Norway
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Compliant bunkers will be available in Norway.
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The Norwegian Maritime Authority (Sjøfartsdirektoratet) issues fines for violations.
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The lowest possible fine is around NOK 79,886. Fines are typically around NOK 250,000, although this figure may be higher depending on the degree of negligence and/or guilt.
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Criminal action may be brought for violations.
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Arrest of the ship for violation of the sulphur limits is possible.
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It is possible to appeal fines to the Norwegian Ministry of Climate and Environment.
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In the event of non-compliance, compliant bunkers are available so that the non-compliant bunkers can be replaced.
Panama
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Compliant bunkers will be available in Panama.
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Fines will be administered by the Panama Maritime Authority (PMA) and the Panama Canal Authority (PCA).
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The PMA and PCA will calculate fines based on the perceived seriousness of the violation. To date, there have been no known fines by the PMA or PCA, so it is difficult to say how they will deal with these incidents.
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Currently there have not been any known criminal proceedings relating to sulphur violations.
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A ship can be detained by both the PMA and PCA for violations, although this is seen to be unlikely. The PMA has in the past been vague regarding club LOU’s but the PCA regularly accepts them for other issues.
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Administrative fines are generally unappealable.
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There are limited options for ships to debunker non-compliant fuel at Panama.
Spain
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Compliant bunkers will be available in Spain.
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The Spanish Central Government Authority issues fines for sulphur violations. The Harbour Master’s office belongs to Merchant Marine General Management, which itself belongs to the Government Ministry in charge of public work.
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There is no set figure for fines. Fines are usually around EUR 22,000 although they could be as high as EUR 180,000. In case of wilful actions, the fine could be as high as EUR 600,000. The Harbour Master will ask for a guarantee to permit the ship to sail (club LOUs are not accepted).
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In theory there is a possibility of criminal action, but only if the use of off-spec bunkers was deliberate.
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A ship can be detained for sulphur violations. In such a case, a club LOU will not be accepted. Authorities will only accept a cash deposit, a bond or a bank security issued by a Spanish Insurer or Bank.
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It is possible to appeal fines, but success is unlikely.
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Any non-compliant bunkers on board will be banned, even if not in use, and similar sanctions will be imposed unless the ship has a scrubber in good operational condition. In addition to the sampling of storage tanks, evidence of tank cleaning and a bunker delivery note will also be required on board.
Sweden
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Compliant bunkers will be available in Sweden.
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The Coast Guard will issue fines for sulphur violations.
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The estimated value of fines is still under discussion. However, there is a risk that fines may be high value to deter non-compliance with the sulphur limits.
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There are not expected to be any criminal repercussions for non-compliance, only fines.
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In very extreme cases, ships can be detained for sulphur violations. It is difficult to predict whether the authorities will accept a club LOU in this situation.
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It is possible to appeal fines.
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In the event of non-compliance, there are many well established bunker operators in the region who can handle non-compliant bunkers.
Source: Standard Club
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Saturday, 15 February 20
CHEN ZHIDA: NOVEL CORONAVIRUS - IMPLICATIONS FOR CHARTERPARTIES - SHIPOWNERS' CLUB
KNOWLEDGE TO ELEVATE
Last month, the Club issued a bulletin on the 2019 Novel Coronavirus (COVID-19) which explained the origin of the virus a ...
Saturday, 15 February 20
AFRAMAX: A MORE POSITIVE ATTITUDE EXISTED IN THIS SECTOR WITH RATES IMPROVING ON ALL ROUTES - BALTIC BRIEFING
VLCC
The market in the Middle East was unmoved this week, with Chinese refiners continuing to slow imports, allied with the impact of the Coron ...
Saturday, 15 February 20
A 56,000DWT VESSEL WAS CONCLUDED BASIS DELIVERY SINGAPORE VIA INDONESIA REDELIVERY CHINA IN THE LOW $6,000S - BALTIC BRIEFING
Capesize
Riding the downward momentum of the previous week, the market was always going to be hard pressed to make any sort of revival. With mu ...
Saturday, 15 February 20
U.S. COAL PRODUCTION WILL TOTAL 595 MMST IN 2020, DOWN 14% FROM 2019 - EIA
EIA forecasts that U.S. coal production will total 595 million short tons (MMst) in 2020, down 95 MMst (14%) from 2019.
Lower ...
Friday, 14 February 20
WHY THE WORLD ECONOMY WILL BE FACING CHINA'S CORONAVIRUS FOR A LONG TIME - CNBC
Everywhere we look we see the headlines and commentators talking about the coronavirus and its impact on tourism, trade and investment between Chin ...
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- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
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