Qatar Diplomatic Crisis/ Trade Embargo

9 June 2017

A number of countries in the Gulf region have cut diplomatic and trading ties with the State of Qatar, and this development is expected to have a direct effect in sea traffic in the region.

More particularly, with effect as from 6^th June 2017, UAE, Saudi Arabia and Bahrain port authorities have banned from their territorial waters:

all ships flying Qatari flags
ships owned by Qatari companies or individuals
all ships destined for or arriving from Qatari ports, regardless of the nature of their call. To this last point, S. Arabia is currently an exception, as only discharging goods of Qatari origin is prohibited.

Above restrictions are not limited to cargo purposes (loading or discharging) but are extended to crew matters, bunkering, repairs or any other business. Hence, and considering that Fujairah is the main bunkering port in the area, there is high probability of increased costs and delays for ship operators.

Qatar on the other hand currently has not imposed any restriction or ban declared on any vessel arriving from/proceeding to Saudi Arabia, UAE and Bahrain.

Egypt/ Suez Canal
In regards to Egyptian ports, Qatari flagged ships will be prohibited from entering any Egyptian ports, unless permission is obtained from the Ministry of Defense.
Ships coming from Qatar flying foreign flags will be permitted to continue cargo operations in Egyptian ports.
All Ships are be permitted to transit the Suez Canal irrespective of their flag and the general consensus is that there will not be a restriction in place for Qatari vessels but Qatari crew mid-transit changes in Egypt are not allowed.

Yemen and one of the competing governments of Libya have also indicated their intention to similarly cut relations with Qatar.

No restrictions are announced by Oman, Iraq and Kuwait.

It is very important to realize that we are not faced with a Sanctions regime against Qatar (similar to those recently implemented against Iran or Syria), but with a form of trade embargo with complications varying from crewing issues to cargo claims and charterparty disputes.

Notwithstanding the above, as at today, IG Clubs’ published Circulars make no specific reference to cover implications as Insuring a ship trading in Qatar or owned by Qatari companies or individuals or carrying Qatari cargo is not prohibited (as was the case with Sanctions).
However, liabilities and losses directly or indirectly arising out of breach of the trade embargo may not be covered by the P&I Clubs.
This is also applicable to liabilities arising out of a deviation or departure from the agreed voyage as a result of the trade embargo.

Since the political situation in the Gulf region remains volatile and advice concerning operational and legal consequences of this diplomatic crisis may change rapidly it is strongly suggested that:

Ship operators refer to local sources of information on a frequent basis to ensure that latest and reliable information available at any given time is obtained.
Vessels already performing contracts of carriage with existing obligations to call at Qatari ports, should give careful consideration as to whether they will be able to fulfill the contract and/or whether they are legally obligated to proceed, if possible before loading any cargo.
Vessels who are considering to call at Qatari ports in the near future should fully assess the implications of calling Qatar before agreeing to do so by contacting their Insurers in order to properly address the risks and exposures associated with such trades.
Review existing (and/or future) charter party arrangements and ensure that same contain suitable and appropriate contractual wordings and clauses (such as “liberty clauses”), that will either allow them to avoid such port calls or otherwise address the potential consequences. Liaising with your Insurers in order to preserve your rights under the contract of carriage -to the extent possible- is highly advisable.

For your ease of reference, we list here below IG Clubs articles/alerts as at today 9/6/17:

The Swedish Club
http://www.swedishclub.com/main.php?mcid=1&mid=109&pid=19&newsid=1959&query=QATAR

UK P& I Club
https://www.ukpandi.com/knowledge-publications/article/uae-saudi-arabia-bahrain-yemen-and-egypt-sever-diplomatic-ties-with-qatar-138496/?dm_i=33T,4ZGO7,MGGKLJ,IZ4A3,1

Skuld
https://www.skuld.com/topics/voyage–port-risks/port-news/asia/qatar-boycott-by-other-nations/

Britannia
https://www.britanniapandi.com/news/qatar-a-guide-to-the-current-situation/

Steamship Mutual
https://www.steamshipmutual.com/publications/Articles/Qatar_Sanction0617.htm

Gard
http://www.gard.no/web/updates/content/23473952/qatar-ships-affected-by-rising-diplomatic-tension-in-the-middle-east

The London P&I Club
https://www.londonpandi.com/club-news/news-alerts/

West of England
http://www.westpandi.com/Publications/News/qatar—update-1/

North of England
http://www.nepia.com/insights/industry-news/qatari-trade-sanctions-notices-announcements/
http://www.nepia.com/media/759149/Qatari-Trade-Sanctions-Notices-and-Announcements-08-06-2017v2.PDF

Shipowners’ Club
https://www.shipownersclub.com/developing-news-fellow-gulf-states-cut-off-ties-qatar/

American P&I
http://www.american-club.com/files/files/MA_060717_Several_Middle_Eastern_Nations_Cut_Diplomatic_Ties_with_Qatar.pdf