BIMCO is working on a charter party clause to help tackle potential abuse of the automatic identification system (AIS), which is mandatory for all ships to carry under Safety of Life at Sea (SOLAS) regulations.

The AIS transmits information about a ship, including its identity and position, and it should not be switched off or disabled at any time other than for very specific safety and security, such as avoiding detection by pirates in high risk areas. The system has been subject to abuse from those wishing to avoid sanctions.

In May 2020, the US Office of Foreign Assets Control (OFAC) issued a shipping advisory on sanctions that recommended that the shipping industry should develop contractual provisions in the form of an AIS ‘switch off’ clause. The intention was that the clause would allow shipowners, charterers and operators to terminate work with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS”.

BIMCO’s concern is that some charterers may, in their haste to be sanction compliant, develop their own AIS switch off clauses that might expose owners to the risk of being terminated even when the AIS has been switched off for legitimate reasons, or the signal has failed to transmit or be received for reasons outside the owners’ control.

The new BIMCO clause will address not only the use of the AIS during the charter party but also prior to the contract. This is important because the OFAC guidelines are focused on identifying patterns in AIS manipulation by ships rather than isolated, one-off incidents, said BIMCO.

The BIMCO AIS “Switch Off” Clause for Charter Parties is targeted for publication in May.