The Container Security Initiative (CSI) that will screen all high-risk cargo destined for shipment to the United States entered into force in Dubai last week.
Dubai is the first port in the Middle East to join the programme.
A Declaration of Principles was signed last December by Sultan Ahmad Bin Sulayem, Executive Chairman of the Dubai Ports, Customs and Free Zone Corporation, and the US Customs and Border Protection (CBP) Commissioner, Robert Bonner (Sea Views, December 28).
Dubai is the 35th port to join CSI. The programme was launched following the September 11 attacks to secure maritime cargo shipments against the global terrorist threat.
A statement by CBP explained that Dubai Customs Administration officials will be responsible for screening any container identified jointly as a potential terrorist risk.
"I applaud the Government of Dubai for assuming a leadership role in this region of the world. Dubai has acknowledged the absolute importance of securing cargo against terrorists. [Dubai's port facilities], which include the much larger seaport of Jebel Ali, are modern and extremely efficient. I am confident the CBP officers stationed there will benefit greatly from this remarkable opportunity," Bonner said.
India to divest SCI stake
According to the Business Standard (India), as part of the Indian Government's divestment strategy for the 2005-2006 fiscal year, it has commenced to sell off 15 per cent of its 80.1 per cent stake in the Shipping Corporation of India (SCI).
The action is significant because it will reduce the government's equity to less than 75 per cent, thereby resulting in the loss of its veto power in SCI.
Furthermore, officials were quoted as saying the government was only selling 15 per cent, or about 40 million shares, in SCI because the market would not be able to absorb a larger sale of sales.
The article maintained that no time frame had yet been decided.
"Even though our view on disinvestment is known, we are yet to finalise our stand on the issue," a shipping ministry official said.
The remaining 19.9 per cent of SCI is owned by financial institutions, mutual funds, banks and insurance companies.
Corporate bodies, non-resident Indians and the Indian public hold a total of 4.5 per cent.
Concern over Indian tax
One aspect of the new service tax framework presented in the recent Union Budget is causing concern within the Indian shipping industry.
The new rules imply that an Indian ship picking up a consignment in a foreign port and dropping it in another foreign port will now have to pay a service tax of 10.3 per cent on all services that the ship uses in foreign ports, to be paid on its return to India.
It also seems the ship might be required to pay the same rate of tax on the port charges it incurs in a foreign port.
Opinion within the shipping industry is concerned this new tax burden will more than neutralise the benefits given in the tonnage tax regime announced last year. Some also worry company profits will be significantly reduced.
The competitive edge of Indian shipping companies versus their foreign counterparts will be undermined, some observers fear.
The Ministry of Shipping is expected to ask the Ministry of Finance to reconsider this aspect of the framework.
The prognosis is dim, however, since the Indian Ministry of Finance is already on record saying the new norms regarding service taxes were in accordance with international practice.
Tanker deadline looms
New regulations pursuant to the International Convention for the Prevention of Pollution from Ships, 1973 (as modified by the Protocol of 1978) MARPOL 73/78 enter into force this week, on April 5.
Revised Regulation 13G brings forward the phase-out (or conversion to double-hull) of single-hull tankers.
Depending on their age and respective categories (as defined in the regulations), the phase-out commences on April 5.
Revised Regulation 13H bans the carriage of heavy grade oil in single hull tankers of 5,000 deadweight tonnes (dwt) and above after April 5. It also bans the carriage of heavy grade oil in those between 600-5,000 dwt after the 2008 anniversary of their delivery.
Tankers found to be in contravention of the new regulations are liable to detention by Port State Control authorities.
TT Club profit soars
The TT Protection and Indemnity (P&I) Club has reported an after-tax profit of $32.19 million (Dh118.1 million) for 2004, marking an increase of about 351 per cent over 2003.
Gross earned premiums rose by more than 20 per cent to about $180 million (Dh660.6 million). Net claims incurred fell by 37 per cent. Total assets grew 15 per cent to more than $446 million (Dh1.6 billion).
The total surplus and reserves reached a record $89.53 million (Dh328.6 million), a 56 per cent increase over 2003.
"This exceptional set of results represents the accomplishment of the three-year recovery programme that was put in place by the board in early 2002. We now have a strong balance sheet and a competitive business that is recognised as the clear market leader in our chosen niche," said Sir David Thomson, TT Club president and chairman.
The results exceeded financial targets, a company statement said.
The company is increasingly confident of regaining its A-minus grade from ratings agency AM Best, the statement continued.
The writer is a Dubai-based marine consultant.
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