Stakeholders explain anti-corruption clause for shipping contracts

shippingTHE largest international shipping association, Baltic and International Maritime Council (BIMCO), has issued explanatory notes following the publication of its Anti-Corruption Clause for Charter Parties, to provide an explanation for each of the six sub-clauses and how they are to work in practice.

The notes explained that the Anti-Corruption Clause provides market users with a regime for responding to unlawful demands for gifts in cash or kind, such as cigarettes or alcohol.

It clarified that the  clause can be used in voyage and time charter parties, noting that  it sets out in a series of steps a process for the contracting parties to work together to resist such demands.

Part of the clarification reads: “If the measures fail, however, the owners’ rights to hire or uninterrupted laytime and demurrage are protected.

“Termination, by either party, is the ultimate sanction under the Clause. A high threshold has been set so that the termination provisions cannot be easily used as an exit from an inconvenient charter, a BIMCO statement said.

The use of the Clause is optional – owners and charterers can agree when fixing whether they wish to include the anti-corruption clause.

The association explained that the new clause will give owners and charterers a contractual platform for cooperative action to resist demands for illegal payments from port officials and others.
BIMCO Secretary General, Angus Frew, was quoted by Shipping News as saying: “BIMCO recognises the importance of a united approach by the shipping industry towards stamping out corruption in the ports and places where the world’s merchant fleet trades.”

Angus added: “Use of the clause is entirely voluntary – it has been developed for owners and charterers who want to combat corrupt practices in ports by using a clearly worded framework in their charter parties..”

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