As port sanctions were implemented on Russian vessels in the EU, Cyprus offers some hope of normalcy to Ukrainian and Russian seafarers who might have seen their bank accounts frozen.
With nearly 14.5% of the global shipping workforce being Russians and Ukrainians, Cyprus is fast-tracking the process for seafarers affected by the war in Ukraine to open accounts, access their salaries and pay bills, which were hindered after Russia’s invasion triggered sanctions on banks.
The EU association of shipowners, ECSA, also highlighted the importance of seafarers amid the Ukraine crisis, urging authorities to guarantee their mobility and rights as essential workers.
“Seafarers are key workers and are at the heart of Europe’s economy.
“They have worked tirelessly to deliver our goods and have made extraordinary sacrifices to keep our economy going in the past two years of the pandemic,” said ECSA President Philippos Philis.
“Ukrainian seafarers are already bearing the impact of this rapidly evolving situation, with seafarers coming to the end of their contracts not being allowed to return home.
“The provision of accommodation and visas for stranded seafarers is crucial for shipowners as they seek to support their crews”.
Last month, the International Chamber of Shipping said: “Seafarers must be able to join and disembark ships (crew change) freely across the world.
“With flights cancelled in the region, this will become increasingly difficult. The ability to pay seafarers also needs to be maintained via international banking systems.”
The Shipping Deputy Ministry issued a circular to shipping companies operating under the Cyprus flag that three brick and mortar banks and two electronic money institutions (EMIs) have responded favourably to a request from the Central Bank of Cyprus to fast-track opening of accounts and secure international IBANs.
“The aim is to assist Ukrainian, Russian, and Belarus seafarers on board Cyprus-flag vessels to receive the salaries, make immediate payments to families and utilities back home, and secure an internationally recognised debit card,” Deputy Minister Vassilis Demetriades told the Financial Mirror.
Under the arrangement, the Bank of Cyprus, Hellenic Bank and Eurobank will require a copy of a passport verified by the employer or some form of digital identification.
Proof of address can be in the form of a copy of a utility bill verified by the employer or a letter from the employer confirming the residence address of the seafarer.
During the first six months after onboarding, the bank may request a virtual meeting or video call with the seafarer, while the debit card will be sent to the employer.
Under the terms of the fast-track arrangement, the current account will have a maximum monthly declared debit and credit turnover equal to the client’s monthly salary, without any additional credit facilities.
Two electronic money institutions (EMIs) operating in Cyprus also responded to the call for assistance, with ECOMMBX and SEPAGA seem to be more flexible than the commercial banks in helping establish digital wallets.
In the case of ECOMMBX, there are limits on the pay-in and pay-out usage of the account, which can only be topped up by the seafarer’s compensation.
SEPAGA requires Russian nationals to have a valid work permit or visa in any other country except Russia.
Clarity on sanctions
Meanwhile, the European Sea Ports Organisation, which has 23 members, said that while it supports sanctions against Russia, there needs to be clarity and uniformity in applying the ban on Russian vessels.
The governments and competent authorities in the EU member states must put everything in place to guarantee smooth implementation of this decision and limit further disruption of the EU supply chain, ESPO said last week.
The fifth sanction package includes a ban on Russian flagged vessels from EU ports, except for agricultural and food products, humanitarian aid, and energy.
It foresees a prohibition on purchasing, importing or transferring coal and other solid fossil fuels from Russia into the EU from August.
“Due to the current crisis, severe crew shortages and, in particular, shortages of officers may occur on EU vessels.
“Payment of salaries for seafarers already under contract is also expected to be significantly affected”.
“European shipowners call on the EU policymakers to do their utmost to guarantee mobility and safety of seafarers and their right to being paid.
“In these extraordinary times, ECSA will continue to liaise with the Commission to ensure the best outcome for the crews,” said Sotiris Raptis, Acting Secretary-General of ECSA.
This is the second time in less than a year the Cyprus shipping ministry has responded to the humanitarian issue of seafarers, calling for international assistance for crew changes amid the pandemic while deploying a Covid vaccination programme for 40,000 crew in May 2021.