Geopolitical shift prompts new sanctions clauses from BIMCO
Overview
BIMCO is updating its suite of sanctions clauses to reflect changes in the sanctions’ environment. The new clauses are expected to be launched at the end of 2019.
Sanctions have a significant impact on companies operating in international trade. Having a poorly worded sanctions clause in a contract could cause a number of problems.
Such problems could include not being contractually able to terminate a contract with a sanctioned entity, despite the fact that the performance of the contract is prohibited under certain laws, as well as banks refusing to proceed transactions combined with a potential claim for damages.
BIMCO’s clauses will be designed to address these issues.
“This is an important task. We need to ensure that sanctions clauses continue to meet the changing political environment given the significant consequences of sanctions violations,” says Alan Mackinnon, Chairman of BIMCO’s Sanctions Clause Subcommittee and Chief Claims Officer, Thomas Miller.
BIMCO is therefore revising its Sanctions Clause for Time Charter Parties and developing a new voyage charter party version. Both clauses will integrate the Designated Entities Clause.
In addition, the “new” sanctions clauses will be more user-friendly as they will provide a one all-encompassing solution for each type of contract.
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