BIMCO publishes AIS ‘switch off’ clause for charter parties

BIMCO has published a new charter party clause to tackle potential abuse of the Automatic Identification System (AIS) by vessels trying to avoid compliance with sanctions while maintaining protection for vessel operators that have switched off the system for legitimate reasons.

Use of AIS is mandatory for all ships covered by Safety of Life at Sea (SOLAS) regulations, to transmit information about the vessel including its identity and position. SOLAS requires that AIS is not switched off or disabled at any time other than for very specific safety and security reasons permitted by the regulations, such as avoiding detection by pirates in high-risk areas.

However, switching off AIS transmission has also been adopted by unscrupulous ships as a method of evading sanctions prohibiting trade with certain countries, to reduce the likelihood of a vessel’s location becoming known to authorities.

In 2020, the US Office of Foreign Assets Control (OFAC) issued a shipping advisory on sanctions which recommended that the shipping industry should develop contractual provisions “in the form of an AIS ‘switch-off’ clause.”

The intention was that the clause would allow shipowners, charterers and operators to terminate collaboration with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS.”

BIMCO says that it became concerned that some charterers may move to develop their own AIS ‘switch off’ clauses in their haste to be sanctions compliant, which might expose shipowners to the risk of being terminated even when the AIS has been switched off for legitimate reasons, or the signal has failed to transmit or be received for reasons outside an owner’s control.

To remedy the situation BIMCO has now published a new clause that not only addresses the use of the AIS during the charter party but also prior to the contract. The clause recognises that there may be legitimate reasons for the interruption of a ship’s AIS signal, so a charterer looking to terminate the charter party for a breach of the SOLAS Guidelines on use of AIS by an owner will have to prove that there was intent by the owner to hide the signal.

The AIS ‘Switch Off’ Clause for Charter Parties is available for download from the BIMCO website, including additional explanatory notes.

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Rob O'Dwyer

Rob is Chief Network Officer and one of the founders of Smart Maritime Network. He also serves as Chairman of the Smart Maritime Council. Rob has worked in the maritime technology sector since 2005, managing editorial for a range of leading publications in the transport and logistics sector. Get in touch by email by clicking here, or on LinkedIn by clicking here.

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