Shipmanagement

Charting Clear Waters: How BIMCO’s USTR Clause Shields Against U.S. Sanctions

30/07/2025

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(www.MaritimeCyprus.com) As part of the United States Trade Representative’s (USTR) “Section 301 Investigation of China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” the USTR announced actions to impose fees on Chinese-related ships calling at US ports.

This clause addresses fees incurred under Annexes I and II of the USTR Notice, specifically for vessels with a nexus to the People’s Republic of China in a time charter context. This clause may be incorporated into new charterparties and into existing charterparties.

The clause stipulates that these fees are primarily the responsibility of charterers, except in certain circumstances outlined in subclause (c), where the fees may be split between owners and charterers, or in subclause (d), where the fees may be entirely the responsibility of the owners.

Recognising that owners are best positioned to verify whether a connection exists, subclause (a) obliges owners to declare, on charterers’ request, whether the vessel or its related entities are linked to the People’s Republic of China. This also avoids the need for owners to disclose personal details of individuals within their organisational structure.

BIMCO USTR Clause for Time Charter Parties 2025

"USTR Notice" means the ‘Notice of Action and Proposed Action in Section 301 Investigation of China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance, Request for Comments’ by the Office of the United States Trade Representative published on 23 April 2025 in the Federal Register, (90 FR 17114), any subsequent notices related thereto, and any enabling rules, regulations or guidance issued by a US federal agency ("US Agency") in furtherance thereof.

"US Service Fee" means any taxes, fees, dues, levies, port entrance fees, or other charges imposed by any US Agency on the Vessel, the Vessel’s owners or operators pursuant to Annexes I and II of the USTR Notice.

(a) For the purpose of the USTR Notice, the parties agree at the date of this Charter Party that, if so requested by the Charterers, the Owners shall declare in writing to the Charterers whether:

(i) the registered owners, the bareboat charterers and/or the disponent owners (if applicable) or their managers are a Chinese vessel owner and/or if the vessel operator is a vessel operator of China, as defined in the USTR Notice; and/or

(ii) the Vessel is built in China.

The Owners shall also be obliged to notify the Charterers as soon as reasonably practicable of any changes or corrections to the requested information declared under subclauses (a)(i) and (a)(ii) above occurring at any time after the date of the Charter Party and during the duration of this Charter Party.

(b) Subject to subclauses (c) and (d) below, and notwithstanding any other provision of this Charter Party, if at any time the Vessel is ordered by the Charterers to call at any port or place in the US and a US Service Fee is incurred, the Charterers shall be solely responsible for such US Service Fee.

(i) the Owners’ declaration under subclauses (a)(i) and (a)(ii) to the Charterers is inaccurate and/or incomplete or the Owners failed to provide the declaration requested under subclause (a) above;

(ii) any US Service Fee or any such increases are directly incurred as a result of any change by the Owners of the registered owner, the bareboat charterer and/or disponent owner (if applicable) or their managers; or

(iii) any US Service Fee or any such increases are directly incurred as a result of any change by the Owners of the vessel operator as defined in the USTR Notice,

provided always that the Charterers will remain responsible if there is any reduction in the US Service Fee incurred and for any US Service Fee which would have been incurred regardless of the events in subclauses (c)(i), (c)(ii) and (c)(iii) above.

(d) The Charterers shall not be responsible for any US Service Fee incurred as a result of the Owners’ breach(es) of this Charter Party, any off-hire event, or any use of the Vessel outside of the Charterers’ instructions.

For the avoidance of doubt, nothing in this Clause shall affect any rights or obligations of the parties in respect of General Average.

(e) The Charterers, or the Owners if subclauses (c) or (d) are applicable, shall promptly remit such US Service Fee directly to the relevant US Agency. Such payment shall be effected in compliance with the US Agency’s payment instructions and such fee shall not be advanced or remitted through the local port agent appointed under this Charter Party.

(f) To the extent that the US Agency's payment instructions require payment other than by a responsible party under this clause, that party shall pay the US Service Fee directly and the responsible party shall reimburse the paying party promptly.

(g) Where the Charterers fail to make payment (or reimbursement) of the US Service Fee as required by this Clause:

(i) the Charterers shall take immediate steps to rectify such failure;

(ii) the Owners shall be entitled to suspend performance under this Charter Party without liability and the Vessel shall remain on hire;

(iii) any time lost, delays, detentions, costs, losses, fines, damages, or expenses whatsoever arising from such failure shall be for the Charterers’ account; and

(iv) the Charterers shall indemnify, defend and hold harmless the Owners and the Vessel against all consequences, claims, or demands howsoever arising from such failure

For the avoidance of doubt, the Owners’ right to suspend performance with the Vessel remaining on hire under subclause (g)(ii) shall prevail and apply notwithstanding any other provisions of this Charter Party, including any off-hire provisions.

(h) Where the Owners fail to make payment (or reimbursement) of the US Service Fee as required by this Clause:

(i) the Owners shall take immediate steps to rectify such failure;

(ii) any time lost, delays, detentions, costs, losses, fines, damages, or expenses whatsoever arising from such failure shall be for the Owners’ account; and

(iii) the Owners shall indemnify, defend and hold harmless the Charterers against all consequences, claims, or demands howsoever arising from such failure.