What are the penalties for non-compliance in the UK?

The EU Regulation is already in force and binding but the precise enforcement process is left to Member States. The UK Government has published the draft Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) Regulations 2017 (the “draft UK Regulations”). The key point to note is that under the proposed UK Regulations a Company could be made criminally liable.

The potential fines should a Relevant Ship:

enter or leave a port in the United Kingdom without a valid DoC; and/or
fail to keep on board a valid DoC or to present a valid DoC upon inspection,

are unlimited in England and Wales and subject to the then statutory maximum in Scotland and Northern Ireland. For instance the current statutory maximum in Scotland is £10,000.

Importantly, under the draft UK Regulations there are wide powers of enforcement including the power:

To detain a Relevant Ship by serving it with a ‘detention notice’ if anyone attempts to navigate it out of a port without a valid DoC; and
Where a Member State has informed the Secretary of State that it has issued an expulsion order, refuse entry for the particular Relevant Ship to any port in the UK.

The draft UK Regulations make provision for arbitration in the event that a Company alleges that a Relevant Ship was improperly detained. In the event that an arbitrator finds in favour of the Company following detention of a Relevant Ship, compensation will be payable in respect of any loss suffered in consequence of the detention of the Relevant Ship as the arbitrator thinks fit. If approved the draft UK Regulations are due to enter into force on 1 April 2017.

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