Gard rules amendments re sanctions

Gard has explained the reasoning behind its amendments to the Rules for P&I and Defence cover for ships and other floating structures and the Rules for P&I and Defence cover for mobile offshore units for both Assuranceforeningen Gard – gjensidig – and Gard P.& I. (Bermuda) Ltd.

They will enter into force at noon GMT on February 20th 2023.

Gard said that, as a result of changes to the terms of the applicable reinsurances  due to amendments of the war programme – a consequence of the ongoing war between Russia and Ukraine –  there would be additional changes to both the Rules for Ships and the Rules for MOUs.

These additional changes would be communicated as soon as all reinsurance terms have been agreed and the subsequent changes to the Rules for Ships and Rules for MOUs had been endorsed by the Boards of the Associations.

Rules For Ships – P&I Entries

Sanctions clauses

Gard said that a challenging sanctions landscape had emerged after Russia’s invasion of Ukraine. The sanctions regimes of the EU, UK and the US were not entirely aligned, and this had resulted in the need to amend the sanctions clauses in the Rules for Ships.

The first change is to remove Russia (and China and France) as countries whose sanctions would trigger the clause. Gard said that this change was implemented in order to mitigate potential issues with EU, US and UK sanctions on the one side and potential Russian counter-sanctions on the other. Gard said that the change was in line with the amendment of the Cefor Sanction Limitation and Exclusion Addendum released on February 28th 2022.

The second change is to further clarify that the Associations and their agents (Gard AS and its subsidiaries) were not to be exposed to a risk of being or becoming subject to sanctions. “Whilst the trigger under the sanctions clauses as per today is whether the Association is exposed to a risk of being or becoming subject to sanctions, the sanctions clauses have now been amended so that the trigger is whether the Association or its agents are exposed to a risk of being or becoming subject to sanctions”.

A definition of the agent in Rule 1 has also been included.

Gard also released an update on deductibles. Appendix V – Deductibles:

An amendment has been made to Appendix V to remove the application of a double deductible in the circumstances such as where a Member diverts a ship for the purpose of securing treatment for an injured or sick person on board, or for the purpose of saving persons at sea.

Specifically, the deductibles for claims arising under Rule 31 and for claims involving having persons saved at sea onboard under Rule 32 have been removed (although the deductible for costs related to having stowaways onboard remains).

https://www.gard.no/Content/34806181/cache=1674116852000/MemberCircular_15_2022.pdf