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Ukraine humanitarian corridor insurance protection announcement expected

Image: Screenshot from Marinetraffic Primus-track-marinetraffic.jpg
As a second ship has made its escape from the war in Ukraine, the Kyiv government is struggling to agree a new insurance deal that will underwrite vessels using the new corridor.

VesselsValue AIS shows the 32,600 dwt Primus is now in international waters, about 100km north of Istanbul, with its cargo of steel bound for Senegal in West Africa. Ukraine Deputy Prime Minster Oleksandr Kubrakov posted on X, formerly Twitter, on Sunday that the Primus had sailed from Odessa port having been there since 22 February 2022.

Other vessels may follow, but discussions over the implementation of a scheme to underwrite shipping using Ukraine’s Black Sea ports is coming under fire.

A local transport source said that the government’s plan to use fuel duties, paid by Ukrainian road users, to jointly underwrite the cost of insurance with international insurance companies, is coming under scrutiny.

The source believes that an announcement by the Ukrainian Government on the insurance plan is imminent.

Under the terms of the plan a majority of the risk is expected to be taken by Ukrainian taxpayers, and some in Ukraine are baulking at this suggestion. But if Ukraine is to maintain its grain exports it will need to persuade vessel operators that they can be compensated given the level of threat from Russian mines and its navy, mainly in Ukrainian waters.

The humanitarian corridor, announced last month by Kyiv following the dissolution of the grain corridor, which Russia decided to leave, has left vessel operators nervous, though the Ukrainians believe they can adequately protect a corridor that runs close to the shore.

Russian military has in the last few weeks bombed the uninhabited ‘Snake Island’, scene of the famous stand-off between the Russian and Ukrainian military in the early part of the war, but these attacks are seen as a warning to shipping in the area that Russia is capable of targeting vessels in the region.

The source was sceptical, however, that vessel operators would risk sending vessels into the war zone. “I think more ships will leave, but I doubt that any more ships will come to Ukraine,” he said.

A package under discussion, first reported by the Financial Times on 21 August, is coming under scrutiny in Ukraine with locals wondering why major multi-billion-dollar companies, making a profit from transporting Ukrainian grain need Ukrainian taxes, used to repair roads, to underwrite their operations.