BIMCO has published a useful clause which deals with the commercial and operational implications of certain vessels calling at US ports following the US Trade Representative’s recent actions to tax certain PRC owned or built vessels.
This clause is limited to PRC owned or operated vessels (Annex I) and certain PRC built vessels (Annex II). It does not deal with non-US built car carriers which will also subject to the USTR port taxes when they come in on 14 October 2025.
The BIMCO clause requires full disclosure of PRC ownership, operation or management. It remains the case that third party PRC managers may be liable to pay the charge if they are listed in Form 1300 or on the COFR. The intention is that the charge falls on PRC owners or operators of all vessels and/or non-PRC owners or operators of certain PRC built vessels. We expect the US will be quick to pick up on suspected circumvention. Many ships are financed via PRC leasing structures. It is possible that the US authorities may go beyond the named owner/ operator/ manager to determine who is the “real” owner/ operator. We can expect to see disputes in this area particularly if the US then seeks to back charge USTR and/or impose penalties or fines.
There is a carve out in the BIMCO clause for unauthorised deviation or off-hire. In those circumstances, the owners would remain liable for any port taxes in the first instance, although they could perhaps recover this in General Average. However, under some forms of time charter deviation to save life or property and/or due to a cargo incident is not an off-hire event (and it would not necessarily be a breach) such that the charterers may remain liable in the first instance for any USTR charges during an emergency deviation.
Hopefully the BIMCO clause will lead to greater operational certainty and reduce the number of disputes that may arise once the USTR port charge comes into effect in October 2025.
Nick Burgess
Partner
