The Ukrainian government has approved the procedure for compensating losses incurred for civilian vessels that call at its ports

The Cabinet of Ministers of Ukraine has approved the procedure for providing guarantees of compensation for damages caused to charters, operators, and/or owners of sea vessels and inland navigation vessels as a result of the armed aggression of the Russian Federation. This applies to vessels flying Ukrainian and foreign flags.

The relevant resolution was adopted at today's Government Meeting.

"Ensuring the stable operation of civil navigation in the Black Sea, particularly within the framework of the grain initiative, is impossible without insurance coverage for carriers facing all risks associated with Russian aggression. We have observed that insurance companies are hesitant to cover such risks, and this poses a threat to the stable functioning of Ukrainian ports.

The implementation of the damage compensation mechanism will enable charterers and shipowners to maintain access to our ports, irrespective of the functioning or non-functioning of the grain agreement. As a state that has ratified international conventions, Ukraine has the right to unrestricted commercial navigation. We are making every effort to find solutions that will facilitate traffic to and from our ports and reduce dependence on the aggressor country, which has been blocking traffic for over seven months, even within the grain initiative," commented Oleksandr Kubrakov, Deputy Prime Minister for the Recovery of Ukraine and Minister of Community, Territory, and Infrastructure Development.

According to the procedure, compensation will be provided to shipowners who have received a written refusal from insurers to compensate for damage caused as a result of the armed aggression of the Russian Federation.

Please note the following points:

! Only shipowners who have entered into an insurance contract or P&I (Protection and Indemnity) policy in accordance with the established procedures of Ukrainian or another state's legislation will be entitled to compensation.

! Shipowners cannot claim compensation for vessels owned by:

• Russian and Belarusian citizens;
• Legal entities registered in these states;
• Legal entities registered in Ukraine whose participants or ultimate beneficiaries are citizens of Russia and Belarus, or directly the Russian Federation and Belarus;
• Individuals and legal entities who are subject to Ukrainian sanctions.

In February of this year, the Verkhovna Rada supported amendments to the law of Ukraine "on the state budget of Ukraine for 2023," which provide guarantees of compensation for damages caused by Russian aggression to charters, operators, and/or owners of sea vessels and inland navigation vessels. Up to UAH 20 billion has been allocated for this purpose.

IC UAC according to the Ministry for Communities, Territories and Infrastructure Development of Ukraine