Ukraine has agreed a compensation arrangement for shipowners whose vessels have been damaged by the war.
The procedure will apply to Ukrainian and foreign-flagged vessels, but will exclude those flagged with Russia or Belarus, according to a government statement.
Ukraine said up to UAH 20bn ($547m) has been set aside for the initiative. However, the maximum amount of compensation is limited to the amount of insurance indemnity under each policy.
The Ukrainian authorities expect this new programme to facilitate shipping within the framework of the Black Sea Grain Initiative (BSGI).
It is also hoped it will ensure that ships will continue to call at Ukrainian ports in the event of Russia withdrawing its participation in the BSGI.
Compensation will be provided to the shipowner who has been denied it in writing by the insurer for damage caused by the “armed aggression of the Russian Federation”, Ukraine said.
Only shipowners who have concluded an insurance contract or protection and indemnity policy in accordance with the procedure established by the legislation of Ukraine or another state will be entitled to compensation.
The damage to be compensated includes losses incurred by the vessel due to irreparable loss or destruction; the cost of repairing structural damage to the vessel which has rendered it unseaworthy; losses due to loss of or damage to cargo; and expenses relating to damage to the health or life of a passenger or crew member.
Ukraine said a shipowner must submit a set of documents to the government no later than 90 calendar days from the date of receipt of their insurer’s refusal to provide compensation.
“Stable operation of civilian shipping in the Black Sea, including within the framework of the grain initiative, is impossible without insurance coverage of all risks associated with the aggression of the Russian Federation,” said Oleksandr Kubrakov, deputy prime minister for restoration of Ukraine and minister for communities, territories and infrastructure development.
“We see that insurance companies are reluctant to cover such risks, which poses a threat to civilian shipping from Ukrainian ports.
“The introduction of the compensation mechanism will allow charterers and shipowners to continue to secure calls at our ports regardless of whether the grain deal works or not,” he added.
Kubrakov said that as a country that has ratified international conventions, Ukraine has the “right to free commercial navigation”.
“And we, for our part, are doing everything we can to find solutions that will open traffic to and from our ports and not depend on the aggressor country, which has been blocking traffic for more than seven months, even within the framework of the grain initiative,” he said.
