Ukraine compensates shipowners for losses due to Russian attacks: details

The Cabinet of Ministers has approved a budget for compensation to shipowners and charterers whose vessels were damaged due to attacks by the Russian Federation.

This is stated in the draft resolution of the Cabinet of Ministers of Ukraine, the Ministry for Communities and Territories Development reported.

The project provides for the provision of guarantees for compensation for damage caused as a result of Russia’s armed aggression to charterers, operators and/or owners of seagoing vessels and inland waterway vessels, as well as the creation of favorable conditions for ensuring stable shipping in the territorial sea of ​​Ukraine and ensuring the operation of the Temporary Sea Route for export-import logistics from/to the Ukrainian seaports of Great Odesa.

According to established practice, standard exclusions from insurance coverage include insured events that occurred during a state of emergency, special or martial law declared by the authorities in the country, or in the territory of the insurance contract.

Due to the armed aggression of the Russian Federation against Ukraine and military risks, there is currently no classic coverage of relevant insurance payments for vessels sailing to the northwestern part of the Black Sea.

In particular, these territories are classified as areas with navigation restrictions for military operations, strikes, terrorism and related dangers – The Listed Areas, published in London by the Joint Military Committee.

For the stable operation of maritime logistics, shipowners and foreign partners need to be confident in the maximum guarantee of transportation safety and receiving compensation from the state in the event of damage caused by the armed aggression of the Russian Federation at sea. This is confirmed by the request from businesses involved in maritime transportation to continue the operation of the compensation mechanism.

Thus, Article 35 of the Law of Ukraine “On the State Budget of Ukraine for 2025” established that in 2025, in accordance with the procedure established by the Cabinet of Ministers, charterers, operators and/or owners of seagoing vessels and inland navigation vessels flying the flag of Ukraine and the flags of foreign states may be provided with guarantees of compensation for damage caused as a result of the armed aggression of the Russian Federation against Ukraine, in the amount of up to UAH 2 billion from the state budget reserve fund.

Read also: Shipping during wartime: how the compensation mechanism for a damaged vessel works

Exceptions are vessels whose owners or shipowners are citizens of the Russian Federation and the Republic of Belarus, legal entities registered in the territory of these countries, sanctioned persons and companies, etc.

It is also proposed to establish a list of types of damage that may be subject to compensation, conditions for applying compensation, requirements for assessing damage, a list of documents submitted by the shipowner to the Ministry of Development and Trade to receive compensation, and the deadline for submitting such documents.