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Source: Skuld

Advisory to Members

Applicability: Shipowners and Charterers

It has only been three weeks since the new ultra low sulphur regulations have come in to force in North America and Northern Europe, and already it is becoming clear that these rules will have teeth and that enforcement will be rigorous. Both the EPA in America and in Europe statements are being made to this very effect.

The Association is grateful to Messrs. ECM and Murphy, Rogers, Sloss & Gambel or their assistance with this update.

The EPA penalty guidelines

The Environmental Protection Agency (EPA) of the United States has now issued a detailed set of guidelines for setting of penalties, should a vessel fail to comply with the new regulations that mandate a maximum of 0.10% sulphur content in fuel for designated Emission Control Areas (ECAs). These guidelines are republished alongside this advisory for members' reference.

The Association is grateful to Messrs. ECM for permission to republish alongside this advisory their Client Alert 03-2015 which explains the key points of the EPA's guidelines.

Important points to note are:

- civil penalties may amount to USD25,000 per violation, per day.
- penalties are not limited to sulphur content violations.
- penalties are designed to deter future violations, that means they are likely to be larger the more aggravated the offence was found to be.

The Association would again remind members of the very stringent approach to environmental violations taken by both the EPA and the USCG - and it could be possible to be subjected to both criminal and civil sanction for an offence.

Warning: an additional, and very serious offence, is the giving of false information to a federal officer. A felony offence punishable by up to five years in prison.

The Association has previously advised on the enforcement doctrine in North America: North American ECA compliance.

European enforcement doctrine

According to the Danish Ministry of the Environment, new EU rules will see member states be required to check on 10% of vessels calling in relevant member state ports per year, specifically reviewing logs and bunker delivery notes.

The new rules would then advance as of 1 January 2016, with testing to be done of the fuel used on-board for at least 40% of the vessels of the 10% that are inspected by member states in / fully bordering an ECA.

There will also be testing, but at a lower % of the vessels in member states partly bordering ECAs, and even in member states not bordering any ECA.

While the official EU regulation in this regard has not yet been published, these rules will see hundreds of ships being subjected to inspection during the course of this year and many more in the year thereafter.

As such there should be no doubt as to very serious and committed approach that will be taken towards enforcing the new MARPOL Annex VI limits.

Loss prevention advice

The Association has produced a significant amount of advice for member's benefit including the following topics and resources:

- MARPOL Annex VI / Air Pollution

- Ship fuel

- Charterparty advice

Members are strongly advised to keenly follow further developments and to ensure that their vessels do in fact comply with the new regulations.

Should members be concerned that any specific vessel may face a situation of non-compliance, they are urged to contact their usual Skuld business unit.

For further information members are asked to contact the Association as follows: lossprevention@skuld.com.