• General Average

YAR 2004 Interest Rates

The original version of the YAR 2004, in its Rule XXI, provided for the necessity to fix an interest rate for every calendar year. This has been altered at the CMI Conference held in Antwerp in October 2022, implementing an automatic market-oriented interest rate linked to the USD Prime Rate, but for older cases the need remains.

Rule XXI of the York-Antwerp Rules 2004, in its original version, stated the following:

1. Rule XXI. Interest on losses allowed in general average interest shall be allowed on expenditure, sacrifices and allowances in general average until three months after the date of issue of the general average adjustment, due allowance being made for any payment on account by the contributory interests or from the general average deposit fund.
2. Each year the Assembly of the Comité Maritime International shall decide the rate of interest which shall apply. This rate shall be used for calculating interest accruing during the following calendar year.

The Plenary Session of the CMI Vancouver Conference adopted the following guidelines for fixing the rate of interest:

Guidelines for the Assembly of the Comité Maritime International when deciding the annual interest rate provided for in YAR Rule XXI
The Assembly is empowered to decide the rate of interest based upon any information or consideration, which in the discretion of the Assembly are considered relevant, but may take the following matters into account:

The rate shall be based upon a reasonable estimate of what is the rate of interest charged by a first class commercial bank to a ship owner of good credit rating.Due regard shall be had to the following:

–        That the majority of all G.A. adjustments are drawn up in USD.
–        That therefore the level of interest for one-year USD loans shall be given particular consideration.
–        That most adjustments, which are not drawn up in USD, are drawn up in GBP, EUR or JPY.
–        That, if the level of interest for one year loans in GBP, EUR or JPY differs substantially from the level of interest for one year loans in USD, this shall be taken into account.
–        That readily available information about the level of interest such as USD – prime rate and LIBOR shall be collected and used.
–        Any amendment of these guidelines shall be made by a decision of a conference of the CMI.

A small Standing Committee on General Average Interest Rates was appointed to investigate the rates of interest applicable to moneys lent by a first class commercial bank to a ship owner of good credit rating, and to make annual recommendations to the CMI Assembly.

The following annual rates of interest were decided upon by the Assembly of the CMI under Rule XXI York-Antwerp Rules 2004 having considered the recommendations from the Standing Committee: