A large part of the world’s ship chartering and sale & purchase business is negotiated at some stage by members of the London-based Baltic Exchange, the world’s oldest shipping market.
Today, the Baltic warned its U.K. members not to broker, charter or sell vessels to persons connected to Russia, citing U.K. sanctions put in place following Russian’s invasion of Ukraine. Those sanctions cast a very wide net in terms of who they target and who must comply.
Here’s what the Baltic said in its warning to members:
Following discussions with a Baltic Member who received oral guidance from the UK Government, the Baltic Exchange is of the opinion that U.K. persons are prohibited from broking, chartering and selling vessels to persons connected with Russia, and to do so would breach inter alia UK sanctions: Part 5 Chapter 2 Clause 29 (1) of the Russia (Sanctions) (EU Exit) Regulations 2019.
Definition of “Persons connected with Russia”
For the purposes of these sanctions, regulation 57I (5) provides that a person is ‘connected with Russia’ if they are:
- An individual who is, or an association or combination of individuals who are, ordinarily resident in Russia
- An individual who is, or an association or combination of individuals who are, located in Russia
- A person, other than an individual, which is incorporated or constituted under the law of Russia, or
- A person, other than an individual, which is domiciled in Russia.
Definition of “U.K. Persons” set out in U.K. Russia sanctions guidance
U.K. persons includes:
British nationals as well as
- All bodies incorporated or constituted under the law of any part of the U.K.
- All companies established in any part of the U.K.
- Branches of U.K. companies operating overseas.
The Baltic Exchange recommends that U.K. Members urgently take their own independent legal advice on this issue and take extra care in performing background checks on companies and potential clients.
The Baltic says it “is seeking further legal guidance for the U.K. and other jurisdictions, this will be shared with members in due course.”