George Naumof
Senior inspector
Romanian Naval Authority
Dear Professor Erik Rosaeg,
My name is George Naumof.
I am employed by Romanian Naval Authority as senior inspector.
I received your letter addressed to the participants in the IOPC Correspondence Group on non collectable levies to the LNG separate account of the HNS Fund, even I am not a member of this group. Probably, somebody knows that I participated at the seminar organized by EMSA on November 2006 on the issue of HNS Convention.
Though, I am very interested in the issue of HNS Convention, because I am in charge with the drafting of the Romanian law for accession to and implementation of this Convention.
I did the translation in Romanian of this convention and now I am drafting the law for implementation. The draft law is almost ready. I informed myself on the issue of HNS Convention studying a lot of materials found on internet and not only.
My general opinion is that the HNS Convention is very difficult to be properly implemented and will have an unpredictable effect to persons liable to pay contributions to the HNS Fund who will be very exposed to failure.
Actually in Romanian ports does not exist any berth or terminal for operating LNG carriers.
Regarding the collecting of levies for LNG cargo discharged, about my understanding, the difficulty appears because of the change of the general rule. The general rule for the general account and for the separate accounts - oil account and LPG account – is: the persons liable to pay contributions in respect of the State Party are the receivers of the HNS cargo, and the receivers have to be subject to the jurisdiction of the State Party.
The special rule for LNG can be formulated as: The annual contributions to LNG account shall be made in respect of each State Party by any person who in the preceding calendar year, or such other year as the Assembly may decide, immediately prior to its discharge, held title to an LNG cargo discharged in a port or terminal of that State.
Reading this rule it is understandable that the person liable to pay contributions is not the receiver of the HNS cargo and this person is not compulsory to be subject to the jurisdiction of the State Party, but it has the obligation to pay contributions in respect of the State Party. Also, the State Party has to include its name and address in the report communicated to the Director of HNS Fund.
In my opinion, it is no way to oblige, via implementation law, other person, as the physical receiver of LNG cargo or the provider of security or additional debtors, to pay contributions on his/her/its behalf.
I see two ways to make the contributions in respect of LNG more collectable.
I.
In the implementation law to have provisions to oblige the title holder immediately before discharge of the LNG cargo to declare all the information necessary for its identification and about its jurisdiction and also to declare that he/she/it agrees to pay the contribution which will be established by the HNS Fund Assembly. This declaration should be used by the Director of HNS Fund in his actions against the persons who are in arrears, according to Art. 22 (2) of the HNS Convention. The presentation of this declaration has to be a condition to allow to berth and to unload the LNG carrier in the port or terminal of the State Party.
(A similar situation appears in the case of HNS cargo received in a port of a State party by a receiver who is an agent of the principal who is under the jurisdiction of another State Party, which is an enclosed country. In this case, the State Party where the port is located has to report to the Director of HNS Fund the name and address of the principal who is not under its jurisdiction and the quantity of HNS cargo discharged/received in the port or terminal.)
II.
The second way means the implementation of the article 23 of the HNS Convention. That means that the State Party to introduce, via implementation law, some special port dues to be levied from the title holder immediately before discharge of the LNG cargo (or from its agent in the port) as a condition to discharge the LNG cargo in the port or terminal of the State Party. It is understandable that the State Party will not include this title holder of LNG cargo in the reports sent by it to the Director of HNS Fund. In such a case the State Party assumes its risk if a difference appears between the amount collected by him from port dues and the amount for total levy established by HNS Fund for the total LNG cargo discharged in its ports and terminals, which must be paid by the State Party. I suppose that such a way is affordable only by the very powerful states, because it is very risky to establish the amount for such a port due, having no information about the amount which will be established by HNS Fund for the future incidents and for an unknown share of contribution.
In the draft law I prepare now I will use the first way.
The spirit of this convention is that the institution of the HNS Fund establishes the amount for each levy and the same institution is in charge to collect levies from the persons liable to pay contributions. Also, the spirit of the convention is that persons who make profit using HNS cargo carried by sea are to contribute to the HNS Fund.
For this reasons I do not agree that the title holder immediately before discharge of the LNG cargo to be replaced by other person in satisfying his/her/its obligations against the HNS fund.
Also, the HNS Convention does not contain any provision regarding the necessity for the insurance of the persons liable to pay contributions to HNS Fund for the case of insolvency. For this reason I consider that to introduce, via implementation law, provisions regarding the surety/provider of security or receiver of the LNG cargo who to be obliged to pay contributions to HNS Fund, replacing the title holder immediately before discharge, is an addition to the HNS Convention provisions and not an appropriate measure under Art. 6 of the HNS Convention. Also, I consider that if such “an appropriate measure” would be adopted by a State Party, then this State Party could be called in court by the persons obliged to pay undue contributions to HNS Fund.
The difficulty to collect levies for the HNS Fund is not only for LNG cargo. In my opinion, the most difficult will be to avoid the practice of the companies (off-shore or local) established for only one business – the carriage of only one (or very few) LNG cargo or other HNS cargo – and suppressed after the business is completed. In this way, at the date of charging for levies by HNS Fund, which will be after few months or more than one year after the moment of the discharge of LNG cargo in the port, the company liable to pay contribution will not exist more.
This are my comments to the issue raised in your letter of 19 June 2007. If you consider that my comments are to be presented to the correspondence group, please be so kind and inform me. If I am not right in my considerations presented herewith, please let me know your opinion.
Yours sincerely,
George Naumof