In reference to the letter dated 16.11.2022 and numbered E-19463099-199-779495 from the Directorate General of Maritime Affairs, as it is well known, ship owners take out Protection and Indemnity (P&I) insurance to cover potential damages to third parties, the environment, or cargoes, as well as the penalties and responsibilities related to such situations. P&I insurance is a requirement for certain types and tonnages of ships under international conventions, and ships of certain types and tonnages that will call at our country’s maritime sovereign areas must also have valid P&I insurance in accordance with our national regulations. Indeed, Article 13 of the Turkish Straits Maritime Traffic Regulation Implementation Guide mandates that all ships carrying dangerous cargo, ships over 300 GT, and tugboats passing through the Straits must have a valid P&I policy.
With the publication of Regulation 2022/879 by the Council of the European Union on 3 June 2022, amending Council Regulation 2014/833, several prohibitions/restrictions have been introduced in phases. Among these restrictions are prohibitive provisions related to the transportation of Russian crude oil and petroleum products to both the EU and third countries. Accordingly, the direct or indirect provision of technical assistance, brokerage services, financing or financial assistance, insurance, and reinsurance services for the transportation of Russian-origin or exported crude oil and petroleum products, listed in Annex XXV of the regulation, including ship-to-ship transfers, has been prohibited after December 5, 2022 for crude oil shipments and after February 5, 2023 for petroleum products. It is also stated that the P&I insurance policies created for the ships involved in these shipments will be considered invalid in case of violations of these bans.
Looking at recent statements from several P&I insurance organizations, it is indicated that in cases where an illegal commercial act or violation of restrictions has occurred before a liability-causing damage, or in other similar cases, even if the ship has a valid P&I policy, the damages may not be covered. These provisions are generally standard texts found in insurance rules and policies, but these statements, which serve as reminders to ship owners regarding recent developments, are also considered additional precautionary measures.
When evaluating the issue in the context of our country’s maritime sovereign areas, considering that it is a dynamic sector with over 100,000 vessels and mostly operates internationally, it seems impossible to track whether a ship performed any banned or illegal activities before entering our maritime sovereign areas. However, in the case of an accident, the need arises to verify whether the P&I insurance of ships carrying loads with potentially catastrophic consequences, such as crude oil products, is still valid and comprehensive as they pass through the Turkish Straits. Otherwise, after a potential accident, if a P&I insurance provider cannot be found, or if the insurance provider rejects necessary actions due to the aforementioned reasons, or if the processes take time and the necessary interventions are delayed, our country, our values, and our people may face significant harm. Additionally, if the Straits, an important waterway, are closed during this process, the supply chain and logistics movement may come to a halt, leading to a global crisis.
Therefore, it has been assessed that obtaining an additional confirmation letter stating that the ship will be covered under the valid P&I insurance during its voyage is the most cost-effective and reasonable solution. In this regard, for ships carrying crude oil that will pass through the Turkish Straits after 01/12/2022, it is requested to obtain a letter from the P&I insurance providers, which includes the ship’s details, cargo, and voyage, stating that the P&I insurance is valid and comprehensive for this ship, voyage, and cargo. This letter should be added to the ship’s voyage plan (SP-1) report and sent to the email address istcan.gth@kiyiemniyeti.gov.tr. To prevent potential delays in the process and avoid any delays in the ship’s passage, it is recommended that the ship’s agents coordinate this matter as early as possible.
We will be happy to follow the developments and share them with you. If you have any questions regarding this matter, please feel free to contact us 24/7.
Respectfully.
