UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
8.2 Enforcement of the IMO 2020 Rule Relating to Limitation on the Sulphur Content of Fuel Oil Since 1 January 2020, the UAE has implemented the IMO 2020 regulations, which limit the sulphur content of fuel oil used on board ships to 0.50% mass by mass (m/m). This regulation applies to vessels operating within UAE territorial waters and calling at UAE ports. The Ministry of Energy and port authorities are responsible for enforcing the sulphur content limitations in the UAE. Vessels are required to comply with these regula - tions by either using compliant fuel (with sulphur content not exceeding 0.50%) or by having an approved alternative means of compliance, such as an exhaust gas cleaning system (scrubber). Fuel Compliance Vessels refuelling at UAE ports with high-sulphur fuel oil (HSFO) must provide an International Air Pollution Prevention (IAPP) certificate, which confirms that the vessel has a working scrubber system. This allows the vessel to continue using HSFO while complying with the sulphur limit. Vessels entering UAE territorial waters or ports with non-compliant fuel must submit a fuel oil non-availability report (FONAR). However, sub - mitting a FONAR does not exempt the vessel from the requirement to carry compliant fuel. Enforcement Actions While there have been no reported enforcement actions or sanctions for violations as of now, the UAE authorities are monitoring compliance actively. Any violations would typically lead to penalties or sanctions, but the exact measures are not publicly detailed.
on the mainland may face higher tax obligations and will likely continue to flag their vessels under other jurisdictions that offer more favourable maritime tax regimes, such as tonnage tax or accelerated depreciation. Tonnage Tax and Accelerated Depreciation The UAE does not currently have a tonnage tax system (which is a tax based on the vessel’s ton - nage rather than its income). Additionally, there is no specific accelerated depreciation system targeted at ships under the UAE tax law. As a result, companies seeking such benefits need to incorporate in jurisdictions that offer these specific maritime tax incentives. 8. Implications of Non- Performance, the IMO 2020, Trade Sanctions and the War in Ukraine 8.1 Force Majeure and Frustration Under UAE law, the concept of force majeure is recognised, and there is relevant case law addressing situations such as pandemics. Force majeure refers to events that, if they occur, make it impossible for a party to fulfil its contractual obligations, as outlined in Article 273 of the Civil Transactions Code. In the case of the COVID-19 pandemic between 1 April 2020 and 31 July 2021 and other specific cases, UAE courts rec - ognised an emergency financial crisis under the previous Federal Decree Law No 9 of 2015 on bankruptcy, along with its amendments. There - fore, circumstances like late delivery, non-arrival of a chartered vessel or delays in loading or dis - charging could be considered force majeure if they meet the criteria of making performance impossible under the contract.
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