The Cabinet of Ministers approved the Procedure for providing compensation to ship owners

The Cabinet of Ministers approved the Procedure for providing guarantees of compensation for damage to charterers, operators, owners of sea vessels and inland navigation vessels.

Resolution No. 361 of the Cabinet of Ministers of March 29, 2024 entered into force on April 3, Marine Transport Workers Trade Union reports.

The resolution approved the Procedure for providing guarantees of compensation for damage caused as a result of the armed aggression of the Russian Federation against Ukraine and military actions on the territory of Ukraine, to charterers, operators and/or owners of sea vessels and inland navigation vessels sailing under the flag of Ukraine and under the flags of foreign countries.

Yes, compensation is provided on an irrevocable basis to the shipowner who is not covered by the insurance contract and/or insurance policy or R&I policy and/or the rules of the relevant R&I club. Also, compensation is paid when the coverage of risks does not extend to the territory assigned to areas of military (combat) operations or areas with navigation restrictions due to military operations, strikes, terrorism and related dangers.

Guarantees will be provided in 2024 in the amount of up to 2 billion hryvnias at the expense of the state budget reserve fund in case of damage during the stay of such vessels in the territorial sea of Ukraine, if they transport non-military cargo from/to open sea ports of Ukraine or entered such ports after 1 January 2024.

The procedure determines that the damage caused by the armed aggression of the Russian Federation includes:

1) damages caused to the shipowner as a result of:

• shipwrecks;

• constructive destruction of the vessel, after which it is impractical to carry out its restorative repair;

2) losses in connection with expenses related to the elimination of structural damage to the vessel, which led to the loss of the vessel’s seaworthiness, including, in particular, the costs of carrying out emergency and rescue operations;

3) damages caused as a result of loss and/or damage to cargo;

4) damages caused to third parties as a result of a collision with another vessel, floating or stationary object;

5) losses in connection with the expenditure related to:

• with the removal of the remains of the vessel and/or cargo and marking the place where their damage (destruction) occurred;

• with the removal of environmental pollution;

• with payment of fines for pollution of the natural environment (if imposed);

• causing harm to the life or health of a passenger or a member of the ship’s crew, as well as repatriation due to the occurrence of the specified circumstances.

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