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Wednesday 22 November 2017

Moore Stephens says UK Autumn Budget preserves stable tax regime for shipping

The stability of tax rules is of vital importance to the UK shipping sector, and international accountant and shipping adviser Moore Stephens says it is therefore encouraging that the UK government continued to provide a stable regime in its Autumn Budget 2017.

The Budget includes some specific further assistance for the offshore sector, with the introduction of a transferrable tax history mechanism for UK oil producers for deals on or after 1 November 2018. This is designed to facilitate the transfer of late-life oil and gas assets. In addition, the government is to launch a technical consultation on allowing a petroleum revenue tax deduction for decommissioning costs incurred by a previous licence holder.

While there are no new developments relating specifically to the shipping industry in the Budget, there are some items worthy of note. Under current rules, where a company realises a capital gain, the original cost will be adjusted for an inflation allowance. This allowance will now be frozen from 1 January 2018. Meanwhile, the Research & Development (R&D) tax credit will be increased from 11% to 12%. R&D is interpreted widely, and this may be of interest, for example, to suppliers to the offshore sector carrying out research and development activities, or companies developing software.

Capital gains made by non-residents on all UK property after April 2019 will be taxable, rather than capital gains on just UK residential property. There will be certain exemptions for investors such as pension funds.

Finally, the government will invest a further £155 million in additional resources and modern technology for HMRC to increase tax revenues by targeting the hidden economy, further tackling those engaged in marketing tax avoidance schemes, and addressing non-compliance among mid-sized businesses and wealthy individuals.

Moore Stephens tax partner Sue Bill says: “Once again it is a case of a UK Budget where little or no specific maritime-related news is good news for the UK shipping sector, while the offshore industry has been given some further, welcome help.”

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping, offshore maritime and transport & logistics adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 626 offices of independent member firms in 108 countries, employing 27,997 people and generating revenues in 2016 of $2.7 billion. www.moorestephens.co.uk


For more information:
Sue Bill
Moore Stephens LLP
Tel: +44 (0)20 7334 9191
sue.bill@moorestephens.com

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Tuesday 21 November 2017

London P&I Club warning on excessive position-fixing intervals

The London P&I Club says excessive onboard position-fixing intervals have been a contributory factor in some recent costly claims.

In one case, a laden bulk carrier grounded on a shoal, in circumstances where a previous inaccurate dead-reckoning plot was not detected in time. Although there were several contributory factors to the grounding, the club says that, if a more appropriate position-fixing interval had been employed, it is likely that the discrepancy between the erroneous dead-reckoning plot and the ship’s subsequently plotted position would have been observed in time to correct the situation and execute the course alteration safely.

In another case, a ship proceeding in a ballasted condition between two small islands was unexpectedly affected by a strong current, and grounded half-a-mile to port of track before the next fix was plotted. The ship was not employing parallel indexing, thus denying the officer of the watch two methods of detecting its heavy set to port.

Writing in the club’s latest StopLoss Bulletin, Loss Prevention Manager Carl Durow, says, “Excessive position-fixing intervals can lead to the officer of the watch not detecting an error in navigation. Club inspectors continue to note a lack of guidance in passage plans for the frequency of position-fixing necessary on individual legs of each voyage. This is often accompanied by excessive intervals in closer proximity to land on inbound voyage charts. Naturally, every passage is different, but it is recommended that the passage planning stage considers the appropriate fixing intervals and provides guidance to the officer of the watch.”

The London P&I Club is one of the world’s leading mutual marine liability insurers. It is a prominent member of the International Group of P&I Clubs, playing a key role in co-ordinating and promoting the collective strength of the P&I industry on behalf of the global shipowning community. www.londonpandi.com

More information:
Carl Durow
London P&I Club
Carl.Durow@londonpandi.com
Tel: +44 (0)207 72 8039



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Monday 20 November 2017

Liberia strikes blow for global shipping with challenge to Brazilian court ruling


The Liberian Registry, in co-operation with the International Chamber of Shipping (ICS), has succeeded in helping the holder of a Liberian mortgage to overturn a decision of the Brazilian courts which, if left uncontested, could have had serious adverse legal and economic consequences for the international shipping industry.

Pursuant to the acquisition of the FPSO (Floating, Production, Storage, and Offloading vessel) OSX-3 in March 2012 by a Dutch company and following re-registration under the Liberian flag, the vessel was mortgaged in favour of Nordic Trustee ASA, a Norwegian entity acting as the security trustee and mortgagee of the vessel.

In an action before the lower court in Brazil, an unsecured third-party creditor, Banco BTG Pactual S/A Cayman Branch, successfully challenged the status of the Liberian mortgage in Brazil on the grounds that the mortgage was not registered with the Admiralty Court of Brazil and that it was only filed with Liberia.

On 16 November, 2017, the Superior Court of Justice in Brazil unanimously granted Nordic Trustee’s special appeal and the amicus (‘friend of the court’) motion filed jointly by the Liberian Registry and the ICS, of which the Liberian Shipowners' Council is a member, against this decision. The motion sought to clarify and rescind the lower court ruling, on the ground that it created uncertainty around the enforceability of mortgages for the majority of the world fleet - including those registers in major flag states such as the US, the Marshall Islands, China and Germany - when such vessels were trading in Brazil.

Liberia took swift and decisive action following the decision of the lower court by filing the joint amicus motion to the main proceeding through its local counsel, Basch & Rameh. Liberia successfully submitted to the Court that the decision of the lower court would have an adverse legal and economic impact on the shipping industry, that it overlooked international conventions, and that it ignored international custom.

Other ship registries, meanwhile, decided not to join the motion despite having major interests in Brazil and notwithstanding the possibility that their mortgages could be questioned and invalidated.

Hara Gisholt, Vice-President, Business & Legal Affairs for the Liberian Registry says, “This has been a long and difficult process but one we were determined to see through. Recognizing that the lower court decision could have been detrimental to international maritime trade, we decided to join as an amicus party early on. Although we were navigating uncharted waters, we knew this was the right decision.”

Scott Bergeron, CEO of the Liberian Registry says, “This is an historic victory for ship financing, international commerce and the Liberian maritime programme. The Liberian Registry’s swift and meticulous actions exemplify what we stand for – excellence, quality and being a true partner for our clients.”

To request an English translation of the court decision, please email Hara Gisholt at hara.gisholt@liscr.com


The Liberian Registry is the world’s most technologically advanced maritime administration. It has a long-established track record of combining the highest standards of safety for vessels and crews with the highest levels of responsive and innovative service to owners. Moreover, it has a well-deserved reputation for supporting international legislation designed to maintain and improve the safety and effectiveness of the shipping industry and protection of the marine environment.
www.liscr.com



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Thursday 2 November 2017

ITIC settles off-hire dispute resulting from ship manager’s negligence


International Transport Intermediaries Club (ITIC) recently settled a claim brought against a ship manager for failure to maintain its obligations under a technical management contract, leading to liability for costs incurred when the vessel was denied permission to berth by port authorities in Australia.

The manager was responsible for the technical management of a bulk carrier which called regularly at an Australian port to load iron ore. The master had notified the manager of a problem with the winch used for the vessel’s mooring rope which, although still operational, needed its worn pinion gear replaced.

The manager had taken no action to arrange the repairs and, over the following months, the vessel called several times at the same port. Each time, when the pilot went on board, the master explained the problem to him, and the pilot was satisfied that, as the mooring lines could be lifted by the winch, the vessel was able to berth safely.

The situation continued until one pilot decided that he would not accept the master’s assurances and refused to allow the vessel to berth. The pilot spoke to the harbour master, who instructed the vessel to go to the anchorage until the winch could be repaired. This caused a four-day delay, during which time the vessel went off-hire in accordance with the terms of the charter-party.

The owner subsequently brought a claim for approximately $150,000 against the manager for the hire not paid to it by the charterer during the off-hire period, and for the additional costs incurred in rectifying this problem outside of scheduled maintenance.

The owner argued that, had the manager responded when it was first made aware of the issue, the repairs could have been carried out without the vessel having to go off-hire. Investigations confirmed that this was indeed the case.

ITIC reviewed the owner’s claim, and determined that some of the losses claimed would have been incurred irrespective of the manager’s negligence. Ultimately, however, it was clear that the manager had breached its obligations to the owner under the ship management agreement and a settlement of $120,000 was negotiated by ITIC.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

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