Areas of Practice
5th May 2020
International trade and shipping play a key role in the transportation of essential supplies, foods and other necessities, a role which becomes even more significant during the ongoing COVID-19 pandemic.
Nonetheless, the lockdowns and restrictions on entry imposed by many countries are causing a severe disruption to the industry while reduced manufacturing activity greatly affects shipment volumes and traffic.
The outbreak of COVID-19 almost coincided with the long-awaited 2020 Sulphur cap, which was forecast to cause short-term uncertainty in the industry. While some countries, in an effort to mitigate the impact on supply chains, elected to delay the implementation of the 2020 Sulphur cap, the shipping industry remains under high pressure which is expected to continue for some months.
The cumulative effects of the pandemic on the shipping industry and the consequent insurance and legal implications of the disruption have yet to be clearly determined. As BIMCO stated, “the industry [shall] be pragmatic and work together to find solutions. Not every answer will be found in the contract and parties should do their best to communicate openly about the issues they face and identify compromise solutions to find a way through these difficult times.”
In Cyprus, the Deputy Ministry of Shipping (DMS) reacted immediately and offered support and guidance to the shipping companies and owners of Cyprus-flagged vessels. The DMS remain fully operational and, as stated on its website, “continues to provide its high-quality services without any disruption, so that all ships registered under the Cyprus flag will continue to operate as usual”.
Circular 9/2020 issued on 9 April 2020 purports to support shipping companies and owners of Cyprus-flagged ships by mitigating the impact of the COVID-19 outbreak. The circular contains DMS published instructions concerning the restrictive measures implemented by both the Cyprus Ports Authority and Contractors/Operators/licensed agents for port services and port installations during the pandemic. The announcement can be found here.
Furthermore, the deadline for the payment of the tonnage tax for Cyprus-flagged ships, as well as the Register of Cyprus Ships’ annual maintenance fee for the 2020 tax year, have been extended from 31 March to 31 May 2020
Overall, at a time when the industry was preparing to undertake a more green approach, maritime stakeholders are now having to consider the wider implications of the pandemic, whilst continuing retaining the positive steps have already been taken towards the preservation of the environment.
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