COVID-19 Impact

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Dear VIPCA Members,

GOVERNMENT UPDATE FOR THE U.S. VIRGIN ISLANDS MARCH 20th:

The U.S. Virgin Islands has 3 individuals who have tested positive at this time, 8 tested negative, and 33 test results are pending. The Government is strongly urging that residents and visitors utilize social distancing to help us contain the Virus and prevent spreading throughout the U.S. Virgin Islands (https://doh.vi.gov/). Effective March 21 at 6 a.m., a maximum of 10 people will be enforced on all social gatherings/events, including bars and restaurants. Large retailers (Home Depot, Kmart, PriceSmart, Plaza Extra & Cost-U-Less) will still be allowed a maximum of 50 and on Mondays from 7 a.m. to 10 a.m., Plaza Extra will be open for senior shopping only. Please refrain from shopping during this time if you are not a senior citizen. Government services will be restricted March 23 through April 6. There will be a 60 day extension on license renewals to include motor vehicles and business licenses. There is also no curfew in place at this time; however, the Governor would prefer if all businesses suspend or highly restrict services and there are national recommendations to refrain from non-essential travel.

MINUTES FROM EMERGENCY VIPCA BOARD MEETING MARCH 19th:

1. Since an arriving charter guest or yacht owner could be exposed to COVID-19 during air travel and may not be able to social distance adequately upon arrival in the U.S. Virgin Islands, VIPCA recommends to its members that charters are discontinued as of March 22nd for 30 days minimum. 

VIPCA’s concerns are for…

a. …the crew who could be exposed to COVID-19 through contact with the charter guest / yacht owner;

b. …the people of the U.S. Virgin Islands who could be exposed to COVID-19 through contact with the charter guest / yacht owner between the airport and the yacht; and,

c. …the charter guest or yacht owner who could contract the virus during travel either to, from, or in the U.S. Virgin Islands.

GUIDANCE FOR CHARTERER: As of today, Cyril E. King Airport on St. Thomas and Henry E. Rohlsen Airport on St. Croix are open for inbound and outbound travel;  however VIPCA has been advised by the Governor that guidance from the CDC should be utilized: https://www.cdc.gov/coronavirus/2019-ncov/travelers/travel-in-the-us.html

GUIDANCE FOR CAPTAINS: Please talk to your clearing house if you have concerns and refer to this document for further support. You may always reach out to VIPCA. https://www.ics-shipping.org/docs/default-source/resources/coronavirus-(covid-19)-guidance-for-ship-operators-for-the-protection-of-the-health-of-seafarers.pdf?sfvrsn=6

NOTE ON BEACHES AND RESTAURANTS: If voluntary social distancing is not maintained by beachgoers, the Governor will consider beach closures as of this weekend. Restaurants have a limitation of 10 people as of Saturday March 21 at 6 a.m., and therefore will likely transition to take-outs only.

2. VIPCA’s Recommended Protocol for Charter Cancellation / Re-Scheduling:

 
a. The specific terms of the particular charter contract control, but there are many different contracts, and even the “standard” CYBA contract is often changed by brokers through their insertion or deletion of clauses. Given that there is no one standard contract, and the facts and circumstance can vary widely, VIPCA cannot recommend a set course of action for yachts regarding cancellations, rescheduling, or escrowed funds.  Worldwide, great legal minds are looking at various force majeure clauses as a result of the pandemic and they are often unable to agree on whether Covid-19 is or is not a force majeure event given a clause’s particular wording.  Ultimately, the courts will need to resolve many force majeure issues. For that reason, VIPCA recommends, whenever possible, that the parties to the contract amicably agree to any required changes by way of addendum to the contract. And, of course, if the yacht is unsure of their legal obligations under a contract, they should contact an attorney.
 
b. While the charter contracts may contain a cancellation clause, VIPCA recommends that in order for the charter industry to remain competitive in tourism that re-scheduling should be permissible for charters that are 30 days out.  Clients should be able to reschedule a charter to occur within one year of their original dates. If the charter rate has increased, the guest should be expected to pay the additional amount. 

a.    HOWEVER, yachts may wish to inquire if there is trip insurance available. While it appears “most” trip insurers are not providing pandemic coverage under “most” policies, if there is a “Cancel for Any Reason” (CFAR) trip insurance policy, then the guest has the ability to cancel the charter – usually this needs to be done at least 48 hours before the start of the charter, but the particular policy terms will control.  Often times the payout under CFAR is not for the full charter amount, but if there is insurance available, the client should avail themselves of the coverage and allow escrowed funds to inure to the benefit of the yacht, at least in part, if not entirely.  If necessary, the yacht could work with the guest in terms of pricing for the second charter.  There is no reason for the yacht to take a financial hit when there are insurance benefits available.  

b.    If there are no insurance benefits available and the client reschedules their current charter for either later in 2020 or 2021 and the client subsequently cancels for any reason, there should be 100% forfeiture of the funds.  Guests should be encouraged to purchase trip insurance for a rescheduled charter if they have none.

d. The addendum should be signed PRIOR TO the current charter date. 

e. VIPCA does not condone Charter Brokers threatening to blacklist any yacht which requests a rebooking fee since same is a commercially reasonable item. It should be left up to the guest as to whether they accept a rebooking fee, and not for the charter broker to dictate. VIPCA would encourage yachts to be reasonable in regard to any rebooking fees and would not recommend yachts requesting a rebooking fee in excess of 10%. 

3. VIPCA will continue to serve as a conduit for information and to send emails to members pertaining to:

a. Virgin Islands Government updates

b. U.S. Coast Guard updates

c. V.I. Port Authority updates

e. Marine Vendors (chandleries and marine service suppliers)

For updates with regards to marine vendor hours of operation or potential temporary closure: Please see this link to a google spreadsheet being updated where members can learn of the marine businesses status of operation; VIPCA encourages members to comment if they learn new information not included already.

4. VIPCA has inquired as to the Government’s actions with regards to business loans and unemployment:

The following was replied by the Governor’s Office March 20th: “$30 million dollars in small interest loans was made available by a Presidential Emergency Economic Injury Disaster Declaration, last week, through the U.S. Small Business Administration for Coronavirus-related economic disruptions. The process for U.S. Virgin Island’s business, to include charter vessels and maritime support business, to access SBA’s Coronavirus (COVID-19) Disaster Relief Lending requires Governor Bryan to issue a U.S. Virgin Islands Economic Injury Disaster Loan Declaration. Today we have successfully completed and forwarded our  package requesting an SBA Economic Injury Declaration. Our SBA representative forwarded our package to headquarters shortly after receiving it. We were informed the process may take up to five days before we obtain approval. However, at the rate headquarters has been processing requests, the time frame may be shorter.” Mr. Toya V.A. Malone, Policy Advisor, Officer of the Governor.

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