Insurer Swedish Club is advising shipowner members to exercise caution following the sanctioning of Ventspils Port Authority by the US.
The company was one of four blacklisted by the Treasury Department’s Office of Foreign Assets Control (Ofac) due to links to suspended Ventspils mayor Aivars Lembergs.
Ofac said Lembergs is "responsible for or complicit in, or directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery."
In an alert, the Swedish Club said members should wait if they needed to make a payment to allow a ship to leave or enter the terminal.
It advised them to contact its experts, and each case will be considered separately and advice given.
Club correspondent Pandi Balt also said: "The Latvian government has decided to take over management of the Ventspils port due to inclusion of the Ventspils Freeport Authority to the sanctions list.
"The government also is in a process of negotiations with US authorities regarding exclusion of the Ventspils Freeport Authority from the sanctions list."
Lembergs is one of the authority's board members, but he has recently announced his decision to resign, Balt added.
According to the official information of the Latvian Financial and Capital Market Commission, the authority's bank accounts are blocked.
"We expect that this situation will be solved soon," Balt said.
The state is also taking over management at the Freeport of Riga.
This is not on the sanctions list, but it is one of the members of one of the associations which is, Balt added.
Owners beware
The West P&I Club said: "There is risk of sanctions if a non-US entity utilises a Ventspils port after General License 1 expires on January 8.
"As to the booking of cargoes or charters which would require the use of the Ventspils port after January 8, there would be a risk that the US authorities could consider any use of the port as material assistance to or financial support for Ventspils."
It added that OFAC has not clarified how the wind-down period will be construed, but based on guidance provided in other sanctions programmes with wind-downs, it is likely that a new charter entered into today which contemplates a port call to Ventspils before January 8 would fall within the wind-down period provided there is some history with the charterer.
Legal history
Lembergs was suspended as mayor by Latvian prosecutors and courts due to an ongoing investigation and charges of corruption and money laundering. Lembergs has denied any wrongdoing.
In 2012, TradeWinds reported that he was being pursued by tanker owner Latvian Shipping Company over more than $100m of losses allegedly suffered as a result of alleged undervalued and fraudulent charters.
A UK High Court judge ruled that year that he did not have jurisdiction to try the claims.
The company said at the time its claims were continuing.
Up to $135m of Lembergs' assets had been frozen by the English courts as the dispute over 63 charters arranged between 2003 and 2005 progressed through the courts.
