We have learned from Dias Co., Ltd., our correspondent in Odessa that foreign vessel owners often face customs clearance problems in Ukrainian ports. Attached please find a copy of E-mail from Dias Co., Ltd.

We hope this information will be of assistance to you.

- quote - To: Japan P & I Club From: DIAS Marine Consultants, Odessa, Ukraine RE: Loss Prevention Circular - Customs Clearance Problems in Ukrainian Ports Dear Sirs, Foreign shipowners often face customs clearance problems in Ukrainian ports with considerable losses arising from incomplete filling-in of the customs declarations/documents, in particular Ship's Stores List, Medicines List, Drugs List. In accordance with Ukrainian Law Customs Authorities are entitled to inspect all compartments of the vessel anytime during the vessel's stay at the port. If undeclared things are found Ukrainian customs regulations provide for such kinds of penalty as a fine from USD 1,600 to 3,200, confiscation of undeclared things or both a fine and confiscation. Formally the kind and amount of penalty are to be determined at the court hearing within three months. However in order to secure payment of penalty the customs collect either the maximum fine (USD 3,200) or the cost of undeclared things (sometimes higher than the fine) or confiscate the things themselves right on board. Theoretically, the money collected in excess of the penalty imposed by the court may be returned but in practice it never is and the maximum possible sum of a fine is usually awarded as the money is collected in favour of the state budget. In case of a confiscation it takes a long time and a good deal of trouble and efforts to get the confiscated things back The Master's unwillingness to pay cash as a security for the fine or any counteraction from his part aggravates the situation as a rule and provokes the customs officers to launch painstaking investigation with interrogation of all crew members in order to determine whether the failure to declare things was deliberate or not, and if it was charge smuggling. This results in the vessel's delays and more severe sanctions on the Master. In our practice there were cases when the fine was imposed for undeclaring of minor quantities of oil, sand, paint kept on board the ship for technical purposes and once even a spare gyrosphere from gyrocompass was confiscated. In this regard we would recommend the shipowners to instruct the Masters to pay their special attention to filling-in of customs declarations and to declare thoroughly all ship's stores, medicines, drugs, spare parts, etc. to be on the safe side as the local Customs regulations do not provide for a comprehensive and itemized list of things which are to be declared. Hope the above will be of help. Best regards, DIAS Co. Ltd. 1 Bazarnaya Street, Odessa, 65014, Ukraine Tel.: +38 0482 346124, 377696, 323582, 323564 Fax: +38 0482 373873 E-mail to:company@dias-co.com - unquote -