Access of foreign-flagged vessels to Russia: cabotage permits

Any vessel flying a non-Russian flag is not allowed to enter Russian territorial waters by default. The access is granted only to vessels under Russian flag with no restrictions. At the same time, many international companies are interested in participating in dredging, carriage, oil and gas industry projects without a long-term flag change.

Russia’s Federal Agency of Maritime and River Transport (the “FAMRT”) therefore is authorized to review applications of shipowners for issuance of cabotage permits. These permits allow for involvement of foreign-flagged vessels in carriage of goods and performance of offshore works in Russian territorial waters.
Issuance of cabotage permits is regulated by several Russian laws, including Merchant Shipping Code and Order of Ministry of Transport of Russian N 274.

Who receives the permit?

The cabotage permit is issued to the applicant who is a shipowner and an actual operator of a foreign-flagged vessel. The application can be passed via a local agent or a lawyer who is in possession of power of attorney.

What vessels are eligible for issuance of the permit?

The permit is issued for any non-Russian flag vessels which are involved in specific project ordered by Russian companies (customers, charterers, ordering parties) in Russian territorial waters but only if there are no substitute Russian-flagged vessels of the same type available in agreed region and in agreed period to perform this project.

In case an owner of a similar vessel under Russian flag notifies FAMRT about his readiness to perform the project in the named region and with the same deadline, the foreign-flagged vessel will not receive the cabotage permit.
Additionally, only vessels with international style classification and insurance certificates are considered for issuance of permits. Local style national certificates may not be accepted by FAMRT.

What documents should be provided for application?

The shipowner should attach the contract with the Russian ordering company / charterer which contains details of the project to be executed by the vessel in Russian territorial waters. Full information should be provided on what type of works / carriage has been planned, period for start and end of works, ports of entry of the vessel, type and amount of cargo to be carried, if any.

The shipowner should also provide FAMRT with data about himself, including company registration number, address, contact details, IMO number and corporate form of the company.

Full description of the vessel should be outlined, including name, flag, IMO number, year of built. The shipowner attaches vessel’s international style certificates (class, tonnage, insurance in respect of liability for bunker oil pollution and oil pollution damage), an onboard equipment list and a crew list with all crew member’s names and nationalities. All certificates should be valid through the duration of the project.

The shipowner additionally provides written evidence of title to the vessel and evidence of vessel having a right to fly her foreign flag (extracts from shipping register, title certificate, etc.).

How long does it take to receive a permit?

Notwithstanding any time for collection of documents, FAMRT decides on the application in 20 calendar days. It takes up to 3 working days for FAMRT to additionally review the contents of application and to register it with all attachments.
It is recommended though that collection and review of vessel’s documents should start at least two or three months before the start of project which the vessel is involved in. This will provide extra time for proper application.

What are the grounds for refusal of issuance of the permit?

The application can be refused for vessels without complete set of necessary documents available.

Additionally, the permit cannot be issued if a Russian-flagged vessel of the same type is free and can be involved on the same project as per statement of her Russian shipowner.

Finally, refusal can follow in case formal objections will be received from Ministry of Defense of Russian Federation for reasons of national security.

What is the period of permit’s validity?

The permit is issued for the period of vessel’s actual involvement in the project as per statement of the shipowner. The vessel should leave Russian territorial waters before expiration of the permit to avoid detention.

Are there any compulsory payments or expenses to obtain the permit?

Application to FAMRT is free of charge.

Expenses can be incurred for collection of documents, postal charges, issuance of power of attorney and for local representation.
Source: Inmarine St. Petersburg Law