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June 2016

Customs fines at Nikolaev

The European Union’s Emissions Trading System (EU ETS) was extended to cover emissions from shipping as of 1st January 2024.

The EU ETS is limited by a 'cap' on the number of emission allowances. Within the cap, companies receive or buy emission allowances, which they can trade as needed. The cap decreases every year, ensuring that total emissions fall.

Each allowance gives the holder the right to emit:

  • One tonne of carbon dioxide (CO2), or;
  • The equivalent amount of other powerful greenhouse gases, nitrous oxide (N2O) and perfluorocarbons (PFCs).
  • The price of one ton of CO2 allowance under the EU ETS has fluctuated between EUR 60 and almost EUR 100 in the past two years. The total cost of emissions will vary based on the cost of the allowance at the time of purchase, the vessel’s emissions profile and the total volume of voyages performed within the EU ETS area. The below is for illustration purposes:
  • ~A 30.000 GT passenger ship has total emissions of 20.000 tonnes in a reporting year, of which 9.000 are within the EU, 7.000 at berth within the EU and 4.000 are between the EU and an outside port. The average price of the allowance is EUR 75 per tonne. The total cost would be as follows:
  • ~~9.000 * EUR 75 = EUR 675.000
  • ~~7.000 * EUR 75 = EUR 525.000
  • ~~4.000 * EUR 75 * 50% = EUR 150.000
  • ~~Total = EUR 1.350.000 (of which 40% is payable in 2024)
  • For 2024, a 60% rebate is admitted to the vessels involved. However, this is reduced to 30% in 2025, before payment is due for 100% with effect from 2026.
  • Emissions reporting is done for each individual ship, where the ship submits their data to a verifier (such as a class society) which in turns allows the shipowner to issue a verified company emissions report. This report is then submitted to the administering authority, and it is this data that informs what emission allowances need to be surrendered to the authority.
  • The sanctions for non- compliance are severe, and in the case of a ship that has failed to comply with the monitoring and reporting obligations for two or more consecutive reporting periods, and where other enforcement measures have failed to ensure compliance, the competent authority of an EEA port of entry may issue an expulsion order. Where such a ship flies the flag of an EEA country and enters or is found in one of its ports, the country concerned will, after giving the opportunity to the company concerned to submit its observations, detain the ship until the company fulfils its monitoring and reporting obligations.
  • Per the EU’s Implementing Regulation, it is the Shipowner who remains ultimately responsible for complying with the EU ETS system.

There are a number of great resources on the regulatory and practical aspects of the system – none better than the EU’s own:

‍https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02003L0087-20230605

‍https://climate.ec.europa.eu/eu-action/transport/reducing-emissions-shipping-sector_en

‍https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/what-eu-ets_en‍

Sayin Ilgili;

Nikolayev/Ukrayna'da gümrük deklerasyonunda yapilan hatali bildirimlerin yuksek meblaglarda gumruk cezalarinin kesilmesine neden oldugu yonunde uyari içeren sirkuler asagida bilgilerinize sunulur.

Sirkulerde; neredeyse gemide bulunan herseyin özellikle de yakitin eksiksiz olarak bildirilmesi gerektigi ve yapilacak en ufak yanlis bildirimlerin dahi ciddi oranda cezalara yol acabilecegi açiklamalari yer almaktadir.

Konu ile ilgili olarak asagidaki sirkuler birçok kulübün Ukrayna'da yerel temsilciligini yapan Dias firmasi tarafindan hazirlanmis olup P&I Sigortacisi Lodestar araciligi ile elimize ulasmistir.

--------------------------------------------------

Good Morning,

Our Correspondents Dias, in the Ukraine, have kindly made us aware of customs fines being imposed in Nikolaev.  The following information further explains the situation:

"Customs fines at Nikolaev

Customs Authorities in Nikolaev Port imposing large fines for small declaration errors.

We have been made aware of the following by our Ukrainian Correspondents, Dias.

We have repeatedly reported to our Principals and their Assureds an outrageous Customs "activities" in Nikolaev sea port. In particular we mean their practice of imposing huge fines on foreign-flagged ships for failure to declare the ship's stores and any goods on board. Unfortunately, this practice is not only still going on but it's getting more frequent of late.

We have to remind all parties concerned that before entering this port, almost everything on board shall be inserted in the Customs declaration: medicines (drugs), cash (both that of the ship and the crew members' personal savings), barrels/tins of paint or oil, as well as any other stores and various commodities on board.

The Nikolaev Customs officers do the sounding of the ship's bunker tanks, i.e. actually perform a bunker survey of fuel and diesel oil and if they found any discrepancy between their findings and figures declared by the Chief Engineer the fine is inevitable. The sum of the fine is rather big - it is calculated as double cost of undeclared goods. Inaccurately declared bunker leads to particularly high fines.

Our statistics shows that every week on average one ship is getting fined by the Customs and we would like to urge the ships' Masters to adhere closely to the ship's agents' recommendations/instructions and to declare almost everything on board the ships to comply with strict requirements of the Ukrainian Customs.   As a rule ship's agents provide Master/Owners with Customs' requirements in their pre-arrival notices but we presume that in many cases Assureds do not take adequate care and attention to such notices.

Owners should notify the ship's command to ensure that they are aware of the importance of accurately completing the Customs declaration. If there is any doubt as to what to declare, advice can be sought from our Correspondents directly - http://www.lodestar-marine.com/correspondents/23"

This information is also available on our website : http://www.lodestar-marine.com/claims-loss-prevention/customs-fines-at-nikolaev

Kind Regards,

The Lodestar Marine Team

______________________________

4th Floor

88 Leadenhall Street

London

EC3A 3BP

elliott.watson@lodestar-marine.com

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Lodestar Marine Limited.  4th Floor, 88 Leadenhall Street, London, EC3A 3BP

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