The Cabinet of Ministers of Ukraine has approved the Procedure for providing guarantees of compensation for damage suffered by charterers, operators and/or owners of sea and inland waterway vessels as a result of armed aggression by the russian federation. This applies to vessels flying Ukrainian and foreign flags (except for russia and belarus). The Government has adopted a resolution to this effect.

“Stable operation of civilian shipping in the Black Sea, including within the framework of the grain initiative, is impossible without insurance coverage of all risks associated with the aggression of the russian federation. We see that insurance companies are reluctant to cover such risks, which poses a threat to civilian shipping from Ukrainian ports. The introduction of the compensation mechanism will allow charterers and shipowners to continue to secure calls at our ports regardless of whether the grain deal works or not. As a country that has ratified international conventions, Ukraine has the right to free commercial navigation. And we, for our part, are doing everything we can to find solutions that will open traffic to and from our ports and not depend on the aggressor country, which has been blocking traffic for more than seven months, even within the framework of the grain initiative,” said Oleksandr Kubrakov, Deputy Prime Minister for Restoration of Ukraine and Minister for Communities, Territories and Infrastructure Development.

According to the procedure, compensation will be provided to the shipowner who has been denied compensation in writing by the insurer for damage caused by the armed aggression of the russian federation.

Only shipowners who have concluded an insurance contract or P&I (Protection and Indemnity) policy in accordance with the procedure established by the legislation of Ukraine or another state are entitled to compensation.

The damage to be compensated includes:

• losses incurred by the vessel due to irreparable loss or destruction;
• the cost of repairing structural damage to the vessel which has rendered it unseaworthy;
• losses due to loss of or damage to cargo;
• expenses relating to damage to the health or life of a passenger or crew member.

For this purpose, the shipowner may submit a set of documents to the Ministry for Communities, Territories and Infrastructure Development no later than 90 calendar days from the date of receipt of the insurer’s refusal to provide insurance compensation.

In February this year, the Verkhovna Rada of Ukraine approved amendments to the Law of Ukraine “On the State Budget of Ukraine for 2023”, which provide charterers, operators and/or owners of sea and inland waterway vessels with guarantees of compensation for damage caused by russian aggression. Up to UAH 20 billion has been earmarked for this purpose.

Source: https://www.kmu.gov.ua