News

Diplomatic dispute affecting shipping trade to Qatar 14/07/2017

Sanction/Trading Restriction

As reported in the international press, a number of countries, mainly in the Gulf of Arabia, have cut diplomatic ties with Qatar. This occurred unexpectedly on 5 June 2017 and involved Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Egypt, Yemen, the eastern government of Libya, and subsequently the Maldives.

Authorities in those countries have issued guidelines to their port operators which, broadly speaking, prohibit ships from sailing directly between them and Qatar. This is the case whether the ships involved are coming from or going to Qatar; or are owned by or chartered to Qatari interests; flagged in Qatar; are carrying cargo from or to Qatar.

The practical response by individual ports is reportedly still developing and may change at short notice. Please refer to BNS 593:

https://www.britanniapandi.com/news/qatar-a-guide-to-the-current-situation/

The action taken by these countries is affecting crew changes, bunkering (in Fujairah, for example) and cargo and/or ship routing. The appropriate operational requirements in response to these restrictions are best assessed by Members with their shipagents and representatives in the region.

There have also been suggestions made to the effect that bank transactions between Qatar and those imposing this embargo may be disrupted. Members should bear this in mind when routing transactions in the region.

By way of comparison, the measures adopted so far are not as complex as sanctions imposed by the United States or European countries in relation to Iran. There has been, to date, no suggestion, for example, that ships that trade to Qatar will be blacklisted from trading to Saudi Arabia, the UAE, Bahrain or Egypt (or indeed other countries supporting their position: Libya, the Maldives and Mauritania). Similarly shipping routes such as the Straits of Hormuz or the Suez Canal have not been closed to ships trading to Qatar. Nonetheless, this economic embargo has been referred to as “sanctions” by UAE authorities and the failure of diplomatic efforts in recent weeks may result in further measures being adopted.

From a P&I cover point of view Members are reminded to consider the terms of Rule 22 (Imprudent Trading) when contemplating trade to Qatar. In that context, it is important that Members carry out their own due diligence checks to ensure that they do not find themselves in breach of the trade restrictions imposed on Qatar.

As regards deviations from contracted voyages, Members are advised to contact their usual claims handling team for advice on any deviation that may have an impact on their liabilities under a Bill of Lading.

In some instances, charterers’ orders or a particular fixture may conflict with these new restrictions. Members are advised to contact their usual FD&D case handler for further advice.