TAX CONFERENCE

The recently enacted "American Jobs Creation Act" gives significant tax breaks to a number of U.S. industries--including shipping.

MARINE LOG and BLANK ROME will present a senior level seminar CHANGES IN U.S. TAXATION OF SHIPPING INCOME in Stamford, Conn. on April 5 & 6, 2004

Make sure you know how the new tax rules work!

February 03, 2005

ICS slams EU pollution moves

Transportation ministers from Greece, Cyprus and Malta may have managed to delay a European Union initiative to impose criminal sanctions in some marine pollution cases. However, the initiative is gathering momentum in the European Parliament.

On January 19, the European Parliament's Transport Committee called for ship-source discharges of polluting substances to be regarded as criminal offenses if committed with intent, recklessly or by gross negligence. In the most serious cases prison sentences should not be ruled out.

Arguing that a European coastguard service could play a crucial role in combatting ship-source pollution, MEPs asked the European Commission to compile a feasibility study on setting up such a service.

To ensure that discharges of polluting substances are detected in time, MEPs would like the role of the European Maritime Safety Agency (EMSA) to be strengthened. They say EMSA should assist the Member States in tracing illegal discharges by providing satellite monitoring and surveillance.

The Transport Committee made these demands in the context of a recommendation made at a second reading of a draft EU Directive on ship-source pollution and the introduction of sanctions. The recommendation, drafted by Corien WORTMANN-KOOL (EPP-ED, NL), was approved by 26 votes to 4, with 20 abstentions.

This is not to the liking of the Executive Committee of the International Chamber of Shipping (ICS) which met in London last week.

"Shipping is an international industry, which depends upon an international regulatory regime to be efficient," noted ICS Chairman Rolf Westfal-Larsen. "Politicians and rule makers must understand that the industry's safety and environmental record is set at risk whenever the global regulatory framework is disregarded."

ICS, said Westfal-Larsen is "very concerned by one of the outcomes of the second reading of the draft EU Directive on Ship Source Pollution by the European Parliament Transport Committee."

If the final Directive permits seafarers to be criminalized and threatened with imprisonment for genuine accidents, said Westfal-Larsen, "it will be in direct conflict with the obligations of EU Member States under the MARPOL Convention."

That convention, he maintained "clearly states that pollution from ships is not a criminal action unless committed 'with intent to cause damage or recklessly and with knowledge that damage would probably result.'"

"The possibility of criminal sanctions for genuine accidents will clearly undermine accident investigations," Westfal-Larsen added.

The MARPOL provisions, he said, "also reflect the view of the global regulators that criminalizing accidents is neither reasonable nor just, given the physical hazards that exist at sea, while the EU's intention to apply criminal penalties to ships and crew in territorial waters would appear to undermine EU plans to require ships that get into difficulties to use designated places of refuge."

The EU Directive on places of refuge is intended to avoid a repetition of the circumstances that led to the break-up of the Prestige off the Spanish coast in November 2002.

"The industry accepts the need for appropriate punishment for deliberate violations of environmental rules and supports the broad intention of the Directive," said Westfal-Larsen, "but only if the relevant EU institutions can make the small changes needed to bring the Directive back into line with international law."

This is not the only recent example of local regulations and policies being in conflict with IMO rules:

* Proposed EU rules on atmospheric pollution from ships are also at variance with MARPOL, says ICS, and are "likely to create huge difficulties for ships that trade internationally." They also pre-empt, unilaterally, a new global agreement to further improve the environmental performance of ships that will be developed after MARPOL Annex VI enters into force, in May 2005, despite the fact that many EU governments have still failed to ratify the existing MARPOL rules.

* In the aftermath of the Prestigeincidence, says ICS, there was the spectacle of several EU states violating the UN Law of the Sea by escorting foreign tankers, that were fully compliant with MARPOL regulations, from their 200 mile EEZs.

Mr Westfal-Larsen commented:

"It is not acceptable for the EU to declare--as the Justice Ministers have recently done with regard to criminalising accidents--that if new EU rules are in conflict with IMO then the solution is simply to amend the global regulations to fit in with their wishes."

The ICS Executive Committee also discussed the continuing impact of tighter maritime security requirements, including the International Ship and Port Facility Security (ISPS) Code which entered in force in July 2004, and problems of over zealous enforcement that have been experienced by some ships.

Mr Westfal-Larsen remarked:

"ICS is particularly concerned about the refusal of some officials to wear identity badges, which prevents ships from adhering to their ship security plans as required by ISPS, creating an impossible dilemma for the crew."

He added "ICS is also concerned about the United States' desire to establish Long Range Identification and Tracking of ships. It was previously understood that the U.S. would seek to avoid the imposition of additional carriage and reporting requirements that involve new costs for industry and extra workload for seafarers, but a recent U.S. submission to IMO suggests this may not be the case."

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