BIMCO is Taking on AIS Abuse to Protect Shipowners

Singapore freight forwarders – Star Concord
04-Feb-2021

The shipping industry is working to curb abuses of the Automatic Identification System (AIS) satellite positioning data and the practices of switching off these mandatory systems. The shipping association BIMCO is taking on the practice, specifically the abuses by charters, as a means of protecting shipowners and the industry.

Required under SOLAS regulations, AIS transmits information about a ship including its identity and position. It should not be 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. Recent incidents in the Gulf of Guinea where ships have “gone missing” raising fears of hijackings or assaults highlighted the practice of turning off AIS and the dangers.

Switching off AIS is most often associated with clandestine activities. In 2020, when the United States issued an advisory on the deceptive practices used by rogue nations and shipping interests to avoid sanctions, they specifically highlighted switching off AIS as a practice that shipping companies should be monitoring for and one that could lead to the black listing of shipping assets. 

The U.S. Office of Foreign Assets Control (OFAC) recommended in May 2020 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 work with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS.”

The Panama Maritime Authority also in May 2020 issued a stern warning to all Panamanian flagged vessels that deliberately deactivate, tamper, or alters the operation of the AIS or Long Range Identification and Tracking System. Panama warned that it would impose sanctions up to $10,000 and/or de-registration or de-flagging of the vessel from the Panama registry fur these abuses. 

BIMCO’s concern is that some charterers may, in their haste to be sanctions compliant, develop their own AIS “switch off” clauses that might expose owners to the risk of being terminated even when the AIS has been switched off for legitimate reasons. They also cite instances when the signal has failed to transmit or be received for reasons outside the owners’ control.

BIMCO is developing a new clause for charter parties that will address not only the use of the AIS during the charter party but also prior to the contract. Targeted for publication in May, BIMCO says the form is important because the OFAC guidelines are focused on identifying patterns in AIS manipulation by ships rather than isolated “one-off” incidents. Their clause will recognize that there may be legitimate reasons why the ship’s AIS signal has been interrupted but will help tackle potential abuse by sanctions busters providing additional protections for the ship owners and the overall industry.

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