We have obtained the following information from Huatai Insurance Agency & Consultant Service Ltd., our correspondent in Beijing:

In recent days, we have heard and encountered some cases of ships failing to sign SPRO agreement when calling Chinese ports, bringing about administrative penalty to the owners. To alert the owners with the current situation here, we have prepared this circular.

According to Article 33 under Regulation on the Prevention and Control of Vessel-induced Pollution to the Marine Environment (“Regulations” hereafter), for the vessels carrying bulk liquid cargoes with hazardous pollutants and other vessels with a gross tonnage of 10,000 tons or more, the owners thereof shall, before conducting operations or entering or exiting ports, conclude an agreement on pollution clean-up operations with the entities having obtained the qualifications for pollution clean-up operations, which shall specify the rights and obligations of pollution clean-up of both parties in case of any vessel-induced pollution accident occurs. A fine from RMB10,000 to RMB50,000 shall be imposed by local MSA to the owners that are in violation of the above requirement.

So far as we know, the onboard inspection to SPRO agreement by local MSA is conducted randomly in conjunction with other inspections. As a SPRO agreement is compulsory at most of Chinese ports, the owners are highly recommended to check with local agents or us in advance and sign SPRO agreement in time. A copy of the signed agreement should be sent to the ships for record and for local MSA’s spot check in order to avoid any delay and penalty to the owners.