Shipping in Venezuela: Legal Trends, Sanctions and Risk for Ship-Owners
A summary of events
Since 2015, Venezuelan oil and energy maritime operations have been subject to USA and European sanctions. This has led to a significant number of owners being reluctant to bring vessels into the country, and to insurers being reluctant to cover the risks of vessels coming to Venezuela for charging and discharging operations. Venezuela has the biggest reservoir of oil in the world and this activity has been sanctioned, which has caused serious difficulties for the Venezuelan economy.
In addition, the Venezuelan political landscape increases the risk for foreign ships. Unfounded arrests and seizures of vessels have occurred over recent years. Furthermore, a number of ships coming to the country are not protected by traditional insurers for war, riot and political risks.
The near future for shipping in Venezuela
Some sanctions have been relaxed in 2022 and 2023, which has led to oil companies from the USA and Europe restarting oil operations in Venezuela. Vessels carrying oil products would assist in an increase of trade and income.
Containership vessels from the major shipping lines are already reactivating an increase of TEUs in the principal ports of Venezuela, such as La Guaira and Puerto Cabello.
No strong institutions – no future for shipping
Tax, port, maritime and customs authorities are the key elements to regaining the trust of foreign investors, especially in the maritime sector. There have been a significant number of cases where containers have been retrieved from ports without the proper bill of lading or other documentation. These acts are perpetrated by individuals, but the authorities play an important part and could be deemed liable for letting this happen and for the lack of proper procedures as Maritime and Port Authorities.
At oil terminals, acts of smuggling, wrongful arrests, common crimes and security and safety concerns have not been properly controlled by the Port State Control and other authorities. In summary, if the institutions are not reorganised and assume their duties to facilitate shipping operations and procedures, shipping will not have a promising future in Venezuela.
National and international legal framework
Venezuela is an active member state of the International Maritime Organization, so the following international conventions apply in Venezuelan ports, alongside Maritime Safety Committee/Marine Environment Protection Committee Directives:
According to the UN Convention on the Law of the Sea and the human rights to due process, the Port State Control and enforcement authorities are also obliged to inform the flag of a vessel when she is detained and arrested for commercial or criminal reasons.
Recommendations for vessels intending to reach Venezuela for shipping operations
Operators intending to enter Venezuela should consider the following policies.
Conclusion
To summarise, Venezuela is a land of real opportunity for shipping, even when political tensions and sanctions can obscure the sun behind the clouds. Operators just need to be certain that the type of business, cargo and stakeholders are on the same page, that the ports are safe and that the trade will generate an interesting revenue.
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Venezuela
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