Frequent Legal Issues for Contractors on
Sakhalin Oil and Gas Projects
(Appearing soon in the Russian Energy Law Journal)

XIV. Cabotage

Presented by Natalia Prisekina, senior associate attorney and Director of the Vladivostok branch office of Russin & Vecchi.

Russian maritime law requires that Russian flag carriers be used for domestic cabotage, which is all marine transportation between Russian ports. There are two exceptions to the requirement of Russian flag carriers: (1) when a specialized vessel is needed, and no such vessel is available in the stock of Russian flag vessels; and (2) when use of a foreign flag vessel is needed for urgent carriage and towage, and there is no possibility for vessels flying the Russian flag to render the required service (157). Cabotage by foreign flag vessels is permitted only between Russian ports that are open to foreign vessels (158). A list of such ports is published and periodically updated in the official publication "Notifications to Navigators."

The Russian Ministry of Transport issues permits for cabotage by foreign flag vessels. Applications should be submitted directly to the Ministry, not to local offices. Ministry of Transport Regulations set forth detailed requirements for applications for permission to use foreign flag vessels for cabotage in Russian waters (159). Separate permission is required for each foreign flag vessel.

Despite the exceptions set forth above to the Russian flag carrier requirement, a cabotage permit applicant need not prove that Russian vessels are unavailable, as the Ministry makes this determination on the basis of its own roster of available Russian vessels. The applicant also is not required to state when the vessel is needed.

A person using a vessel in his own name, irrespective of whether he is the owner of the vessel or has a different legal title, should file the cabotage permit application (160). The applicant should submit the application in Russian with the RF Ministry of Transport, addressed to the Head of the State Sea Fleet Service of the RF Ministry of Transport, specifying the following:

- name and address (location) of applicant;
- vessel name;
- vessel flag;
- name of the port (place) where the vessel is registered;
- identification number of the vessel, assigned by International Maritime Organization;
- call signal of the vessel;
- place and the year of vessel construction;
- type and purpose of the vessel, area of her sailing;
- main technical specifications of the vessel including tonnage (gross and net), full carrying capacity and main dimensions of the vessel;
- vessel class and term of validity of classification certificate;
- name and quantity of the cargo declared for carriage (data sufficient to allow identification of vessels subject to towage or other floating objects);
- port of loading (departure) and port of discharge (destination).

Copies of the certificate of ownership to the vessel, the certificate of the right of use of the foreign flag vessel, and the classification certificate should accompany the application.

The State Fleet Service of the RF Ministry of Transport considers the necessity of involving foreign tonnage in the carriage (towage) within five days from receipt of the application and notifies the applicant of its decision. Permission may be denied if the application is filed by an improper person (not the ship owner or the person using the ship in his name), or if the documents filed do not meet the established requirements. A denial must be issued in written form with details explaining the reasons for such denial. Documents filed as part of the application are returned to the applicant.

If permission is granted, the Navigation Security Department of the RF Ministry of Transport notifies the captains of ports within which foreign flag vessels have been permitted to carry (tow) cargo.

(157) Russian Government Resolution No. 404 of May 24, 2000, Item 1.
(158) Russian Government Resolution No. 404 of May 24, 2000, Item 2.
(159) RF Ministry of Transport Regulation, August 23, 2001.
(160) RF Ministry of Transport Regulation, Item 5, August 23, 2001.