Ukraine to compensate damaged cargo ships, as Russia rejects Black Sea proposal

Ukraine plans to provide financial assistance to civilian ships damaged by Russian strikes in the Black Sea, as Russia has rejected a proposal from Kyiv and its allies to ensure safe passage through the Black Sea. The Ukrainian Infrastructure Ministry has developed a mechanism under which Kyiv will compensate shipowners, operators, and charterers for up to 80% of the assessed damage, should insurers not cover the risks.

The compensation will cover damage to or destruction of ships, loss or damage to cargo, and emergency and rescue operation costs. The goal is to mitigate financial risks for those involved in maritime shipping and maintain the continuity of Ukraine's export and import logistics. Despite ongoing threats, Ukraine's maritime logistics continue to operate.

Foreign partners, including Turkey, India, and Egypt, proposed transporting food from both Ukrainian and Russian ports, but Russia declined to guarantee safe passage. Russia intensified attacks on cargo ships in the Black Sea during the summer, with 52 vessels hit in just six weeks in July and August. The attacks have effectively halted Ukraine's agricultural exports, putting around 32 million metric tons of agricultural products worth approximately $10 billion at risk.

Insurance rates in the Black Sea have surged, and alternative routes, such as the Danube River ports and railways, cannot handle the necessary cargo.