Sanctions clause
Meaning
A sanctions clause allocates the risk of sanctions: the owner can refuse orders exposing the ship to sanctions, and the charterer warrants it will not give them.
Also written as Sanctions compliance, Price cap
Sanctions clause explained
Tanker sanctions compliance has become a central part of chartering, covering Russian oil price cap rules, sanctions on Iran and Venezuela, and sanctioned ships and companies. Charter parties now include detailed sanctions clauses, often BIMCO's standard wording plus the charterer's rider.
Ship-to-ship transfers, AIS gaps and opaque ownership are the red flags compliance teams look for.
Related terms
Ship-to-ship transfer
A ship-to-ship (STS) transfer moves cargo directly between two tankers moored alongside each other, at anchor or under way, instead of via a terminal.
Vetting
Vetting is an oil company's or charterer's risk assessment of a tanker, using inspection reports and history, before agreeing to charter it or accept it at a terminal.
War risks clause
A war risks clause sets out what the owner may do, and who pays extra costs, if the voyage is exposed to war, piracy, terrorism or similar dangers.