U.S. Security Clause for Time Chartering 2002

BIMCO U.S. Security Clause for Time Chartering 2002

If the Vessel calls in the United States, including any U.S. territory, the following provisions shall apply with respect to any applicable security regulations or measures: 

Notwithstanding anything else contained in this Charter Party all costs or expenses arising out of or related to security regulations or measures required by any U.S. authority including, but not limited to, security guards, launch services, tug escorts, port security fees or taxes and inspections, shall be for the Charterers’ account, unless such costs or expenses result solely from the Owners’ negligence.

Explanatory notes

In the wake of the events of 11 September 2001 the U.S. has been imposing on the shipping industry new security regulations and measures, which have caused increased expenses and delays to vessels calling in the U.S. In an effort to protect owners against the consequences of these new security measures, a set of standard clauses have been produced by BIMCO for incorporation into voyage and time charter parties, as appropriate.

The “U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) Clause”, was drafted to take into consideration the situation where the charterers have voluntarily signed the so-called C-TPAT Agreement, but the owners have not. Owners who wish to help the charterers comply with their obligations under the C-TPAT Agreement may use the Clause, although they are not legally bound to do so. (For more information on the C-TPAT Agreement, please refer to the U.S. Customs and Border Protection website)

The two remaining clauses, “U.S. Security Clauses” (one for voyage chartering and one for time chartering), were drafted to establish between the parties the liability for time lost and expenses incurred associated with the new U.S. requirements, e.g., consequences of new reporting procedures and the posting of security guards on board vessels calling U.S. ports.

Although under a voyage charter party it is usually for the owners to comply with and pay for port related requirements and costs, the Clause focuses on items that nevertheless ought to be for the charterers’ account because they are cargo related. Such items would include time lost in obtaining entry and exit clearances, which is not attributable to the vessel, counting as laytime or time on demurrage and any expenses or additional fees relating to the cargo, even if levied against the vessel, being for the charterers’ account. Finally the Clause stipulates that notice of readiness may be tendered even when the vessel has not been cleared for entry by the authorities. This provision is designed to attempt to protect the owners against any arguments that the vessel is not legally ready although she is ready for all other purposes.

The time charter party clause is less complicated and simply proposes that all costs and expenses arising out of security regulations or measures will be for the charterers’ account as the employment of the vessel is solely the charterers’ prerogative.

Originally published in BIMCO Special Circular No. 3, 4 December 2002 - U.S. Security Clauses to be used in voyage and time charter parties

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