Bill to Amend Special Measures Law on Specified Vessels
Overview
On October 16, 2026, the Cabinet approved a bill to amend the law to address foreign governments’ suspension of reinsurance for shipowners’ liability insurance and ensure stable maritime transport of crude oil, liquefied natural gas, and petroleum products. The bill adds liquefied natural gas and petroleum products to the covered goods. The countries covered will be designated by Cabinet Order based on criteria including being subject to a reinsurance prohibition. In line with these amendments, the current law’s title will be changed to the Act on Special Measures Concerning Contracts to Secure the Performance of Specified Liability Obligations Relating to Specified Vessels.
Key points
- On October 16, 2026, the Cabinet approved the amendment bill.
- Liquefied natural gas and petroleum products will be added to the covered goods.
- The law’s title will be changed to the Act on Special Measures Concerning Contracts to Secure the Performance of Specified Liability Obligations Relating to Specified Vessels.
Overview
Shipowners must have shipowners’ liability insurance to cover damages to third parties, and compensation for incidents such as oil spills can be substantial. The Japan Shipowners’ Mutual Protection and Indemnity Association, an insurance provider, receives reinsurance from shipowners’ liability insurance associations in Europe and the United States.
The current law, enacted in 2012, allows the government to pay the Japan Shipowners’ Mutual Protection and Indemnity Association an amount equivalent to the reinsurance portion of shipowners’ liability insurance. Amid unstable international conditions, stable maritime transport must be maintained for vessels carrying crude oil, liquefied natural gas, and petroleum products, including when reinsurance is suspended.
Impact
The bill aims to ensure stable maritime transport of crude oil, liquefied natural gas, and petroleum products essential to Japan, in response to foreign governments’ suspension of reinsurance.
Details
Liquefied natural gas and petroleum products will be added to the currently covered crude oil. Petroleum products designated by Cabinet Order will be covered.
Countries subject to a reinsurance prohibition imposed by foreign governments or similar entities will be designated by Cabinet Order based on the prescribed criteria.
In line with amendments ① and ②, the current law’s title will be changed from “Concerning Specified Tankers” to “Concerning Specified Vessels,” resulting in the title Act on Special Measures Concerning Contracts to Secure the Performance of Specified Liability Obligations Relating to Specified Vessels.