On April 18, 2019 an international conference titled “Saint Petersburg Maritime Forum: Pressing Problems of Marine Navigation” organized by the Admiral Makarov State University of Maritime and Inland Shipping and River Fleet, and the Maritime Arbitration Commission at the Chamber of Commerce and Industry took place in collaboration with Egorov Puginsky Afanasiev & Partners. The Firm’s Senior Associates Alexey Karchiomov and Andrey Tuzov spoke at the event.
Alexey Karchiomov, Senior Sssociate at the Maritime Shipping / Transport Law Practice of the Firm, delivered a report at the second session of the conference devoted to the Northern Sea Route (NSR).
Legal Regulation of Navigation along the Northern Sea Route: National and International Interests
“The strategic importance of the Arctic for contemporary and prospective development of Russia and the entire world is a generally accepted fact. In order to implement the Russian national strategy to develop the Arctic, objectives were set such as proper international law formalization of external borders of the Arctic zone and improvement of the national legal framework, legislative definition of the Arctic’s status and government regulation of navigation along the Northern Sea Route”, Alexey Karchiomov noted.
Addressing the issue of the Arctic waters’ legal status, Alexey clarified that according to the United Nations Convention on the Law of the Sea, coastal Arctic territories enjoyed the status of internal waters whereas the issue of the legal regime of the Arctic waters running through the exclusive economic areas of coastal states remained open until today from the viewpoint of other countries’ interest.
Alexey spoke about international legislative initiatives in the Arctic, in particular, provisions of the International Code for Ships Operating in Polar Waters (Polar Code) and expects a ban on the use and transportation of fuel oil in the Arctic waters. Alexey added that one of the recent Russian initiatives in respects to the Northern Sea Route was to establish the exclusive right of Russian ships to carry oil, natural gas, including liquefied gas, gas condensate and coal produced in the Russian Federation and/or territories under its jurisdiction. This would include the continental shelf, and allow Russian ships to be loaded in the water area of the Northern Sea Route, and to relax requirements on ships’ ice classes.
Criminal risks in the maritime business
The Firm also organized a section titled “Criminal Risks in Electronic Document Management in the Maritime Business”.
Andrey Tuzov, Senior Associate at the White Collar Crime Practice of the Firm, opened the session with his report on major criminal law risks when doing business in Russia, including specifics on the maritime and shipping industries. Andrey emphasized that administrative audits by government authorities over safety of transport operation, compliance with standards and rules may become the basis for prosecution. Alexey Karchiomov added how the arrest of cargo on a ship may be used as a mechanism in competition wars: “The reason for arresting a ship may also be the arrest of cargo therein. If the arrested cargo is transferred for safe custody to a vessel owner, the cargo must remain in port and it is difficult to unload it”, Alexey emphasized.
Mitigating risks of top managers’ prosecution
The lawyers dwelled on the issue of how confidential information was kept by top management and employees because information obtained during audits by supervisory and audit authorities may be passed to relevant authorities and operate as a basis for prosecution. “From the viewpoint of information safety, special attention must be paid to the granting of access for line personnel to the information related to the company’s operations. Given existing criminal implications and risks, the ship’s captain should restrict access to confidential information depending on the crew member status”, says Andrey Tuzov.
The environmental aspect of criminal liability sparked a lively discussion. The lawyers shared about the risks of prosecution over environmental damage, injury and harm of human activity, noting that the key specific of such crimes is the connection between violations of safety rules and rules for environmental protection and the inflicted harm.
Cyber-crime in maritime shipping
Alexey Karchiomov spoke of cyber-crime threats in the maritime shipping industry. The consequences of cyber-crime could include not only material losses but also injury and wrongful death. Alexey talked about the main types and techniques of cyber attacks and gave some practical examples of how to counter them.
“A big number of participants in the working process, the need to make decisions promptly, dependence on electronic interaction and matters of trust – these are the vulnerable areas in the maritime shipping industry that criminals take advantage of”, Alexey notes.
The ongoing process of ensuring information security and raising employees’ awareness of potential risks is one of the important recommendations to mitigate cyber-crime risks for business.
After discussing practical recommendations on how to mitigate risks of cyber attacks, the event ended with a lively discussion among participants and a questions & answers session.