U.S. - COFR Requirements Increase to Match OPA 90 Limits

October 2008

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On 17 September 2008 the U.S. Coast Guard issued a ruling to amend regulatory requirements under the Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act, for vessel operators to establish and maintain evidence of financial responsibility. The amendments ensure that the amounts of financial responsibility that must be demonstrated by vessel operators in their Certificates of Financial Responsibility (COFRs) are consistent with increases to the limits of liability under the Oil Pollution Act of 1990 (OPA 90). The OPA 90 limits were amended in July 2006. (See New OPA 90 Limits and also the table which can be downloaded below).

Effective 15 January 2009 vessel operators must be able to demonstrate this increased financial responsibility. It is understood that the major COFR providers (including SIGCo, Shoreline and Arvak) will provide the U.S. Coast Guard with a master guarantee schedule to which individual vessel guarantees attach up to their limits of liability. These organisations will notify the Coast Guard before the deadline that the new new limits of liability are accepted, obviating the need for vessel operators registered with them to notify the Coast Guard individually.  

Whilst this resolves the problem for a majority of vessels, those owners that arrange their own COFRs, or go through the smaller COFR providers, or have limited cover, or are unsure of their COFR status, will need to consider the need for a new or amended COFR on a case by case basis. Applications must be made at least 21 days before the COFR is required.

The amendments also implement changes in the Coast Guard's administration of the COFR program; effective 17 October 2008 hard copy COFRs need no longer be carried on board a vessel. The U.S. Coast Guard will be able to check if a vessel complies with its COFR requirements by referring to electronic records. 

Further information on the ruling is available in the Federal Register entry for 17 September 2008.