Policy and Regulatioin
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2016-08-03 13:03:03

Indian seafarers could well start to price themselves out of the market with shock news that the income tax department will now tax them up to 30% of their salaries whether working on local or foreign flagged ships.

Until this month, Indian crew who spent more than six months at sea had enjoyed similar benefits to non-resident Indians, but now following an income tax tribunal in Kolkata that could all change. Tax authorities are also looking at taking tax income from the previous six years.

India is one of the world's largest suppliers of crews to the world's merchant fleet.

Two seafarers associations, the Maritime Union of India (MUI) and the National Union of Seafarers of India (NUSI), are set to challenge the tax tribunal decision.

2016-08-02 16:40:42

Global Shippers' Forum (GSF) has developed a plan to end container shipping surcharges within five years, GSF said during its Annual Meeting in Colombo, Sri Lanka.

GSF is looking to end "the imposition of surcharges on shippers by 2020" through a series of actions "that will expose the scale and injustice of the practice to world trade bodies," said Chris Welsh, Secretary General of the Global Shippers' Forum.

The reasons given for applying a surcharge and the scale of charges are growing, but shippers claim they are not related to the true costs of the service being provided.

Examples of surcharges amounting to US$250 per container, were given by GSF members using Asia-Europe trade routes. The cost can sometimes exceed the contracted price for shipments making the management of total shipping costs unpredictable for cargo owners, GSF said.

"Our campaign will expose the extent of surcharging and make it an issue in future trading agreements," said Welsh.

He added that GSF "is determined to end these practices and restore visibility to shipping rates and confidence to shippers."

2016-08-02 13:26:57

The Italian government led by the prime minister Matteo Renzi is shaking up the national law on ports and ships. The latest Council of Ministers has just approved some important changes dealing with port authorities and the so called motorways of the seas.

Starting with the ports law, the Cabinet said yes to a new regulation aiming at cutting bureaucracy, reviewing a system regulated by a 1994 law and assigning to port authority presidents more managerial tasks. The two main points of the new law are: decrease from 25 port authorities to 15 regional Port System Authorities and transformation of the former Port Committee (which included representatives also of the private stakeholders) into a lighter Management Committee (where the new members will be named only by local political institutions). As for the bureaucratic simplification, the new law establishes that all the administrative port-related procedures will be united in a new Customs and control single window.

Some big changes regard the Italian local cabotage rules too. Following a fierce competition between Grimaldi Naples (on one side) and Tirrenia, Moby and Snav (on the other side) on the motorways of the seas market where some extra-EU seafarers were embarked thanks to tailor-made agreements with labour unions, the minister of transport decided to limit the access to the Italian international registry's fiscal benefits only for the Italy flagged ro-ro and ro-pax ships with 100% Italian or EU crew members onboard on the routes linking two national (continental or insular) ports.

As of today, Italy's government did not amend yet its tonnage tax scheme in order to allow other EU flag ships to access the regime that basically allows for the determination of presumptive income based on the net tonnage of the qualifying ships apportioned to the effective shipping days (tonnage income).

2016-07-26 15:13:48

US Customs and Border Protection (CBP), the largest agency within the Department of Homeland Security, has created the National Jones Act Division of Enforcement to enhance implementation of the Jones Act.

The new division, to be known by the acronym JADE, will be dedicated to making sure that the 1920 Act is observed. The Act has been focus of some controversy in recent times.

It requires all cargo vessels on internal US routes – meaning the nation's inland waterways or on routes between US ports (including ones beyond the contiguous 48 states) – must be US-built, US-flagged, US-owned and crewed by US citizens or resident aliens.

Calls for the requirements to be loosened have come from Hawaii, Alaska and territories such as Puerto Rico and Guam, their main claim being that the Act unfairly inflates the cost of imported goods to those states and territories.

But security hawks and US maritime industry representatives say that now more than ever the Act must be preserved in light of the global terrorism threat.

2016-07-26 14:38:50

The European Community Shipowners' Associations (ECSA) has supported the European Commission's newly published communication on a European Strategy for low-emission mobility which points out that all transport sectors, including maritime shipping, need to contribute towards reducing the EU's greenhouse gas emissions and air pollutants.

The communication calls for further work on the introduction of an "Energy Efficiency Design Index" for new ships engaged in international shipping.

The EU also affirmed its commitment to securing a mandatory global agreement for the collection and reporting of greenhouse gas emissions from international shipping in the International Maritime Organisation later this year.

The measures need to be complemented soon by an international agreement on an emission reduction objective for the shipping sector, according to the communication, which should be followed by measures to mitigate emissions in the international maritime sector.

The EU already has in place legislation that will, as from 2018, require ships that use EU ports to monitor, report and verify emissions. The EU may align this legislation in the event of an international agreement on a global system.

In relation to air pollutants, the Commission supports further measures by the International Maritime Organisation to reduce these emissions, such as the designation of additional Emission Control Areas and the implementation of a global cap on sulphur in fuel in 2020.

"We believe that shipping obviously must be part of the global solutions to limit the increase in the global temperature as we clearly are also a global contributor to the carbon emissions," said ECSA Secretary General Patrick Verhoeven.

"We fully agree with the aim of the EU to secure a robust and mandatory global agreement for the collection and reporting of greenhouse gas emissions from international shipping in the International Maritime Organisation as mentioned in the Commission's communication. We also look forward to seeing a proposal to align the EU MRV Regulation with the global system. Finally, we support the Commission in ensuring that IMO timely delivers on the next steps. We believe that a global agreement is both needed and possible."

2016-07-22 11:44:51

Hong-Kong listed shipping and logistics company China COSCO Holdings Co (CCHC) received on July 18 a subsidy amounting to CNY189m (USD28.3m) from China COSCO Corporation, the indirect controlling shareholder of the company, for the decommissioning and upgrading of its vessels.

The company said the subsidy will be recognized as a non-operating income and will be included in the profit and loss for this year.

China COSCO Holdings reported in April a major rise in its net loss from CNY1bn (USD154.1m) seen in the quarter ended March 31, 2015, to CNY4.5bn (USD690m) in the corresponding period this year.

The loss was mainly attributed to a weak demand in the container shipping market as the company's container shipping business recorded a loss of approximately CNY1.4bn. The loss was also assigned to the disposal of 100 percent equity interests in China COSCO Bulk Shipping Co., and 100 percent equity interests in Florens Container Holdings Limited, as well as to an imbalance of supply and demand in the dry bulk shipping market and low levels of freight rates, which affected the company's profit.

2016-07-15 14:16:38

The South Korean shipping company Hyundai Merchant Marine (HMM) has signed a Memorandum of Understanding (MOU) to join the 2M Vessel Sharing Agreement (2M VSA) starting from April 2017, upon finalizing negotiations and approval procedures in each country.

The company signed the MOU following agreements with bond-holders to adjust debt and shipowners to adjust charter-hire.

Signed between HMM and the 2M carriers, Maersk Line and Mediterranean Shipping Company (MSC), the MOU is a binding agreement regarding HMM's entry to the 2M VSA.

"By accessing 2M VSA network, HMM will be able to strengthen its service offering and achieve improved cost competitiveness. The 2M carriers will benefit from a reinforced service competency in Asia and improved network cover in the trans-pacific area," said the company.

HMM has now completed all conditions set out in the voluntary agreement with creditors from March 2016 and in accordance with the completion of such preconditions, "the planned debt-for-equity swap by creditors will be executed as planned."

"Based on the company's sound financial structure, HMM will put its utmost efforts into improving our service offering to clients and to continue increasing operational competency in the second half of this year to continue improving profitability of our company," HMM's spokesperson said.

HMM started discussions to join the world's largest alliance 2M in June after the company reached agreements with containership owners on 20 percent charter rate cuts and with owners of bulk carriers for 25 percent charter rate reductions, which are expected to take effect over the next three and a half years.

2016-07-15 14:10:39

The adoption of a decision that renders legally binding the commitments offered by fourteen container shipping companies, which brings more transparency to the maritime transport of containers price politics, "does not solve" the price fixing problem, according to the European Shippers' Council (ESC).

The decision, adopted by the European Commission on July 7, makes legally binding the commitments which were placed in order to increase price transparency and to reduce the likelihood of coordinating prices, as well as to stop the current inquiry made by the Commission about competition breach within container transport sector.

"The liner operator practice of announcing GRIs may have harmed competition and shipper's interests. In these commitments, the carriers proposed a new model of announcements. They will stop using GRIs, but will announce freight rates that include at least the five main elements of the total price," ESC said, adding that the price announcements would be considered as maximum prices for the declared period of validity and would not be made more than 31 days before their entry into force.

The purpose of this pledge is, according to the EC, "to increase the committal value of the parties involved, especially to the customers."

"However, this increased committal value does not take away shippers' serious concern that the new model may allow the parties to explore each other's pricing intentions and to coordinate their behaviour," ESC said.

The new model still enables the liner operators to test their new price policy without incurring the risk of losing customers and monitor whether or not they can reasonably implement this new price level. It also provides the operators with the ability to reduce strategic uncertainty and reduce the risk for losing competitiveness in the market, according to ESC.

2016-07-13 11:30:30

The prospect of the United Kingdom leaving the European Union has raised a number of questions regarding the status of sulphur regulations in the UK, according to the International Bunker Industry Association (IBIA).

The EU's sulphur regulations go beyond the minimum requirements of the International Maritime Organization's (IMO) MARPOL Annex VI. Although the EU and IMO regulations are aligned regarding the 0.10% fuel sulphur limit for ships operating within an emission control areas (ECAs), the EU Sulphur Directive has three key extra requirements.

Firstly, it sets a 0.10% fuel sulphur limit for ships berth in any EU port. Secondly, outside ECAs, there is a 1.50% sulphur limit for passenger ships on regular service between EU ports until 2020. And thirdly, the EU has decided that a 0.50% will apply within EU waters from 2020 regardless of the timing of the IMO's global 0.50% sulphur cap.

Until the UK's divorce from the EU is complete, which is not likely to happen before October 2018, EU regulations will continue to apply, however, the UK could, if it wants to, decide to replace the EU sulphur regulations and go for different requirements, either more or less stringent, after exiting the EU.

"The UK, as a party to Annex VI, would have to call for an amendment to the geographical reach of the ECA if it wanted to allow ships to use fuel above 0.10% sulphur along its eastern seaboard," IBIA said, adding that this "is not considered a likely scenario."

IBIA believes that, in theory, the UK could allow vessels to use fuels with up to 3.50% sulphur while at berth in the ports that are not inside an ECA, as well as in UK waters, until the global 0.50% sulphur cap takes effect.

"Should the UK decide to ease sulphur restrictions compared to the EU Sulphur Directive, there may be a potential for the UK's west coast to attract more shipping and boost activity in ports like Liverpool and Bristol, which could develop existing container and breakbulk hubs," said IBIA.

2016-07-08 13:54:53

China's Ministry of Industry and Information Technology (MIIT) has released a bulletin asking for opinions on proposed new regulations for domestic shipyards.

The proposed new regulations intend to improve the shipyard white list, which was unveiled in 2014, through adding new requirements.

According to the release, shipyards that haven't delivered ships and received new orders and haven't had ships under construction for more than one year, shipyards that haven't delivered ships and received new orders for more than two years, shipyards that have suspended operations and declared bankruptcy, and shipyards that have been acquired and lost legal independency, will all be removed from the white list.

So far, seven of the 71 shipyards on the white list have already suspended operations or declared bankruptcy including Rongsheng Heavy Industries, Sinopacific Offshore, Mingde Heavy Industry, Sainty Marine, JES International Holdings, Zhenghe Shipbuilding and Zhejiang Shipbuilding, while four affiliate shipyards of CSIC are currently under a merger process.

The new regulations also request the shipyards to submit a self-examination report every year and authorities will conduct investigations at the shipyards every two years.

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