SECTION I. General Provisions.

Chapter 1. General Rules.

Clause 1. Objectives of Navigation of Ukraine.

Merchant Shipping Code of Ukraine (thereafter called "Code") shall regulate relations arising in and out of merchant shipping, which in this Code means activities connected with the use of vessels for carrying cargo (goods, passengers, luggage and mail), for fishing and other sea trades, exploration and extraction of minerals and raw materials, performance of towing, ice-breaking and salvage operations, laying out cables, as well as for other economic, scientific and cultural purposes.

Clause 2. Right for Merchant Shipping.

The activities in compliance with Clause 1 of this Code, defining the notion of "merchant shipping" may be carried out by legal and physical persons (entitles) who own, use and dispose of vesels, provided they possess a special permit (licence) for such activities issued in accordance with current legislation of Ukraine.

Clause 3. Regulation of Merchant Shipping and working Conditions on Sea Transport (Merchant Marine).

The State shall regulate merchant shipping through the central body of executive power, which provides shaping and implementing public policy in the areas of maritime and river transport, other central executive authorities and the National Commission for the State Regulation of transport.

In accordance with this Code and other legislative acts and international treaties of Ukraine central executive agency that provides public policy in the transport sector, within its powers with the concerned central authorities develop and adopt regulations on merchant shipping, guidelines, rules freight, passenger, mail and baggage regulations in direct intermodal transport and direct water communication, which are mandatory for all legal and natural persons.

Regulation for fishing vessels shall be approved by the central executive body to the state policy in the field of maritime safety fleet vehicles Fisheries.

Clause 4. Applying the General Principles of the Legislation of Ukraine.

Civil, administrative, economic and other legal relations that arise in and out of merchant shipping and are not regulated by this Code, shall be regulated by the rules of civil, administrative, economic or other legislation of Ukraine.

Clause 5. Legal Liabilities in Case a Vessel Inflicts Damage and/or Losses.

In case a vessel inflicts damage and/or losses not provided for under Clauses 296 and 314 of this Code, reimbursement of the losses insured shall be regulated by the Law of the state where the action or other circumstance that has caused a claim for reimbursement of losses took place, and if a loss has been inflicted in the open sea - by the Law of the flag state.

Clause 6. Applying the Foreign Law.

Inclusion of provisions for applying the foreign law and merchant shipping practice into the treaties provided for by this Code, shall be allowed in those cases when the parties may, in compliance with this Code, depart from its rules.

Clause 7. International Treaties to Which Ukraine Is a Party on Merchant Shipping Issues.

International treaties to which Ukraine is a party, concerning merchant shipping aspects are applied in Ukraine in accordance with the Law of Ukraine "On International Treaties to which Ukraine is a party" (3637-12).

Clause 8. Selection of Court or Arbitration.

Property disputes arising out of agreements or other civil-and-legal relations connected with merchant shipping and referred to the, competence of the Marine Arbitration Commission of the Chamber of Trade and Industry of Ukraine (thereafter called Marine Arbitration Commission) are decided by this Commission, provided there is an agreement of the parties concerned.

Property dispute connected with merchant shipping, wherein a foreign legal or physical person is a party, may be, by agreement of the parties, passed for consideration to a foreign court of arbitration.

Clause 9. Payment Unit.

Payment unit mentioned in Clauses 131, 194, 309, 318 and 352 of this Code, is the unit of "special drawing rights" defined by the International Monetary Fund. The amounts denoted in Clauses 181, 194, 319, 309, 318, 352 of this Code, shall be converted into national currency of Ukraine by official exchange rate of national currency and "special borrowing right" published by the National Bank on the day of setting-up a limited fund and, if such a fund is not provided for-on the day of payment.

Clause 10. State Supervision over Merchant Shipping.

State supervision of merchant shipping in Ukraine rests with the central body of executive power, providing the implementation of the state policy in the sphere of security in the maritime and river transport, which monitors compliance with the legislation on Maritime and international treaties of Ukraine's navigation, as well as the supervision of the state of sea routes and the total management of the state registration of ships, certificates of proficiency Navy, and rescue pilot service.

State supervision over safety of fisheries and fishing trade, as well as observance of international treaties to which Ukraine is a party pertaining to fishing trade regulation, is effected by the Ministry of Fisheries and Fishing.

Clause 11. Tariffs.

Tariffs on carriage of passengers and baggage in coastal trade as well as the rules stipulating the implementation of such tariffs shall be approved in accordance with the legislation of Ukraine in force.

Clause 12. Allotment of Land and Water Areas for the Purposes of Merchant Shipping.

Allotment of land and water areas for commercial navigation, as well as for the implementation of projects of construction or carrying out any work in the area of ​​the navigation and maritime routes in the procedure established by the Land and Water Code of Ukraine.

Legal entities and individuals who violate the rules of this Article, shall at the request of the central executive authority, provides for the formation of state policy in the field of transport, within a defined period after their own expense, demolition, moving, or the changes of buildings and structures that create obstacles to navigation, or the action aids to navigation.

The central body of executive power, providing the establishment and implementation of the state policy in the field of maritime and river transport, coordinates the allotment of land and water areas for commercial navigation, as well as for the construction or carrying out any work in the area of ​​the navigation and shipping lanes provided there is a central executive agency that provides implementation of state policy in the sphere of security in the maritime and river transport.

Proposals to demolish, move or need to change the buildings and structures that create obstacles to navigation, or the action of aids to navigation, is the central body of the executive power, providing the implementation of the state policy in the sphere of security in the maritime and river transport.