Monday, 29 November 2010

Port State Control or extortion?

Cash strapped Spain makes ‘fine’ move

P&I club Skuld has warned the industry that Spanish PSC inspectors are targeting foreign ships in a bid to raise revenues to help the country’s shaky economy. Skuld’s caution is based on a report by its correspondents Bull Marine Surveyors of Spain. “Due to the current financial situation in Spain, and due to the fact that the Spanish government urgently needs income, they have instructed the Treasury office inspectors to increase their surveys/inspections in all companies in order to get an extra income of EUR 4 billion”, it says. “In our opinion, the Spanish government has also instructed the Head Office of PSC in Madrid to trace, arrest and fine vessels in order to get extra income”.

“According to this new regime, PSC Inspectors will aim to find detainable deficiencies, resulting in large fines and delays”.

It is believed that Treasury inspectors in Spain leaked the government’s plans to local newspapers. Skuld says that ships have been fined between EUR 60.000-90.000 in the past- normally EUR 60.000, which is the minimum amount that has to be guaranteed in order to release the vessel.

Masters are always liable to find their vessels arrested if any serious deficiency is found anywhere in the world. However, there is a world of difference between not allowing a vessel to sail on genuine grounds and targetting foreign ships for revenue. Spanish law, like in some other countries, requires a Master to declare any material or serious deficiencies in the ship to the authorities before arrival. Shipowners fear that the authorities in Spain will misuse this law, finding small deficiencies at PSC inspections and claiming that they were not properly notified by the Master beforehand.

Bull says that “even a small failure or lack of an official stamp in the normal books can be a reason to arrest and fine a vessel. As everyone knows, anyone who wishes to find things amiss on board can find them without any problems, as even new ships are not perfect ships. We recently had a detention and fine of a vessel which was only 6 months old.”

The Club says that Spanish Flag vessels are not being targeted, and neither are passenger vessels or those owned by bigger owners because of obvious implications. “The focus is on non-ECC flags and medium to small tonnage”.

Worse, the Notification of Arrest is delivered on board in Spanish, and the amount of fine must be deposited before any appeal can even be made. “After approximately one month, depending on each port and workload they have, the final fine is imposed, and then this new amount must be placed before the first guarantee is returned,” Skuld says. “No matter if the Owners agree or not with the deficiencies traced, the only way to release the vessel is to place the amount without any arguments. The vessel is released and allowed to sail only after the amount requested by the PSC has been transferred”. Payment normally takes three hours after the money and documents have been gathered by the shipowner’s representatives.

“Presently the situation is so drastic that any silly excuse is used to detain vessels following all laws and regulations, including article 105.3 lay 27/92 which states that the Master must advise of any deficiency on board. The article considers this a minor offence, but the fine imposed is EUR 60.000, so perhaps it’s a minor offense with expensive consequences”, Bull says. The Club says that the matter can take between one to three years to be finally resolved, in case the owners or their P&I Club allege unfair detention.

Shipowners can only hope that other countries in the Eurozone- with more than a few shaky economies- do not follow the Spanish ‘model’ for raising revenues through unfair fines. Although PSC has been misused by officials in many parts of the world for extortion, that is very different from an official policy that threatens to promote this practice. Moreover, from one of the Paris MOU countries too.

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