Ministry proposes to reserve shipment of exports, imports via seaports for Russian cos

MOSCOW. May 31 (Interfax) - Russia's Transport Ministry has proposed to reserve shipment of Russian exports and imports for domestic vessels, making exceptions only if Russian shipowners do not have the required type of vessels or they cannot ship the necessary volume on time, national daily Kommersant reported on Tuesday.

The ministry has specified how Russian vessels can be given preference in serving marine cargo traffic to and from Russia. On May 18 the ministry sent out for approval to relevant agencies a set of rules for issuing permits to ship the cargo of Russian shippers and receivers in Russian seaports using "vessels, the shipowners or beneficiary owners of which are not Russian legal entities," the paper said.

The document states that shipments of exports and imports through Russian seaports should be made using the vessels of Russian legal entities. Exceptions would be possible if a specialized fleet is needed that does not exist in Russia or if shipments need to be made within a timeframe and in amounts that domestic vessels cannot handle. In these cases, special permission would be required from the Federal Maritime and River Transport Agency, the paper said.

Under the proposed procedure, the agency would send a request for shipment to the Russian Chamber of Shipping. If the chamber or shipowners with beneficiary Russian legal entities do not notify the agency within three days that the shipment can be made with "Russian" vessels, the agency would assume that it cannot. The document does not specify what happens if the beneficiary owner of the vessel is a Russian individual and not a legal entity, the paper said.

A memo attached to the document said that, due to sanctions, "foreign cargo receivers and Russian cargo shippers give preference in chartering vessels to foreign flags and foreign shipowners, which leads to revenue losses for Russian shipping companies and a significant decrease in tax revenues." This could ultimately lead to the shutdown of shipping companies, their bankruptcy and Russia losing a trading fleet it controls, the memo said.

In an earlier version of the Transport Ministry document the restrictions applied to cargo whose shipment by sea or internal waterway is deemed strategically important for the country's defense and security, such as crude oil, coal, ore, fertilizer, liquefied petroleum gas (LPG) and liquefied natural gas (LNG). But there were objections to this concerning the share of foreign vessels in long distance shipments of ore (100%), fertilizer (95-97%) and coal (97-98%), including from big business lobby RSPP.

In the May 18 version, the ministry proposed to apply the restrictions to cargo that only Russian vessels ship - crude oil and oil products, and to impose this measure only until December 31, 2023.

In April, as a measure to counter sanctions, the Transport Ministry drafted changes to the federal law on seaports that would give the Federal Maritime and River Transport Agency the power to determine the types and volumes of cargo shipped out of seaports by the vessels of Russian shipping companies. This referred to reserving marine exports for vessels under the Russian flag or vessels sailing under foreign flags but owned or beneficially owned by Russian legal entities.

The bill, drafted pursuant to President Vladimir Putin's instructions to look into the situation regarding the use of Sovcomflot vessels by Russian cargo shippers, was intended to ensure maximum utilization of vessels controlled by Russian shipping companies.