Contract analysis

I. Purpose This memorandum analyzes whether the Financial Lines Policy issued by Oceanos Underwriters Société Anonyme ("Oceanos") to Thalassa Shipping & Logistics Société Anonyme ("TSL") under Policy No. OCU-FIN-2021-GR-0487 (the "Policy") provides coverage for the customs classification and valuation dispute arising from the Independent Authority for Public Revenue of the Hellenic Republic ("AADE") Assessment Notice

II. Policy Summary A. Key Policy Parameters The relevant parameters of the Oceanos Financial Lines Policy are summarized as follows: The Policy is a claims-made policy, meaning that it covers claims first made against the insured during the policy period, regardless of when the underlying conduct occurred. This is a critical structural feature: because the Assessment Notices were issued on August 12, 2022, and the Po

Section 4.3(a) — Fraud/Willful Non-Compliance Exclusion

Section 4.3(a) provides that the Policy does not cover any Loss: "arising from or attributable to Fraud, willful non-compliance, or deliberate evasion of any tax, duty, or customs obligation by the Insured or any officer or director of the Insured acting in such capacity." The Policy defines "Fraud" in Section 1.10 as: "Any dishonest, fraudulent, or criminal act committed by the Insured with the intent to deceive or

Section 4.3(b) — Deliberate Undervaluation Exclusion

Section 4.3(b) provides that the Policy does not cover any Loss: "arising from or attributable to the Insured's deliberate undervaluation of imported goods for the purpose of reducing customs duties payable." This exclusion has two cumulative elements: (1) the undervaluation must be "deliberate," and (2) the undervaluation must be undertaken "for the purpose of reducing customs duties payable." Both elements must be

Section 5.1 of the Policy requires the insured to provide notice of a Tax or Regulatory Authority Claim to the insurer "as soon as practicable but in any event within sixty (60) days of the Insured first becoming aware of the Tax or Regulatory Authority Claim." Notice must be provided in writing and must include a description of the claim, copies of the relevant assessment or demand documents, and a summary of the in

III. Chronology of the Insurance Claim The following timeline sets forth the key dates relevant to the insurance coverage analysis. This chronology is limited to insurance-related events; a more comprehensive timeline of the underlying AADE customs dispute is set forth in the classification and valuation analysis memoranda referenced above. The timeline demonstrates that TSL acted promptly in engaging counsel and pro

IV. Oceanos Reservation of Rights Letter — Summary Oceanos's Reservation Letter, dated November 22, 2022, acknowledges receipt of TSL's insurance claim notice and confirms that Oceanos is investigating the claim under Policy No. OCU-FIN-2021-GR-0487. The Reservation Letter does not constitute a denial of coverage; rather, it preserves Oceanos's right to deny coverage in the future based on the exclusions cited in the

1. Willful Non-Compliance — Section 4.3(a). Oceanos reserves the right to deny coverage if it is determined that TSL's classification of the STS gantry cranes and ASC systems under Combined Nomenclature code 8426 41 00 constitutes "willful non-compliance" within the meaning of Section 4.3(a) of the Policy — that is, a "deliberate decision by the Insured to disregard a known legal obligation" with respect to customs c

2. Deliberate Undervaluation — Section 4.3(b). Oceanos reserves the right to deny coverage for the valuation adjustments assessed in AADE/ADAN/2022/0074 if it is determined that TSL "deliberately undervalued" the imported goods for the purpose of reducing customs duties payable. Oceanos specifically identifies two components of the valuation dispute as raising concerns: (a) the Nereus Maritime Advisory Limited procur

V. Analysis of Coverage — Insuring Clause A. The AADE Assessment Qualifies as a "Tax or Regulatory Authority Claim" The threshold question in any coverage analysis is whether the underlying event falls within the scope of the insuring clause. Here, the AADE Assessment Notices satisfy each element of the Policy's definition of a "Tax or Regulatory Authority Claim" under Section 1.22. First, the AADE is the Independent

VI. Analysis of Exclusions The core of the coverage dispute centers on the two exclusions cited by Oceanos in its Reservation Letter. For the reasons set forth below, neither exclusion applies to the present claim. A. Willful Non-Compliance Exclusion — Section 4.3(a)

1. Definition and Standard As noted above, the Policy defines "willful non-compliance" as "[a] deliberate decision by the Insured to disregard a known legal obligation with respect to tax, duty, or customs classification, valuation, or reporting." This definition imposes two cumulative elements that must both be satisfied for the exclusion to apply: (a) The decision must be "deliberate" — meaning that the insured mus

2. TSL's Classification Does Not Constitute Willful Non-Compliance The willful non-compliance exclusion does not apply to TSL's classification of the STS gantry cranes and ASC systems under CN 8426 41 00. This conclusion is supported by multiple independent grounds, any one of which would be sufficient to defeat the exclusion. (a) No "known legal obligation" was disregarded. The foundation of the willful non-complian

Article 34(10) of the UCC provides a mechanism for resolving divergent classification interpretations among EU member states. The fact that AADE invoked this mechanism — rather than simply issuing a BTI based on its own independent analysis — is a tacit admission that the classification question is genuinely uncertain and requires harmonized EU-level guidance. A classification dispute that rises to the level of requi

1. Definition and Standard The deliberate undervaluation exclusion under Section 4.3(b) requires the insurer to establish that the insured engaged in "deliberate undervaluation of imported goods for the purpose of reducing customs duties payable." As noted above, this exclusion has two cumulative elements: (a) The undervaluation must be "deliberate" — meaning that the insured must have intentionally and knowingly und

2. TSL's Valuation Declarations Do Not Constitute Deliberate Undervaluation The deliberate undervaluation exclusion does not apply to the valuation adjustments assessed in AADE/ADAN/2022/0074. This conclusion is supported by multiple independent grounds. (a) No motive for undervaluation — 0% duty rate. This is the single most powerful argument against the deliberate undervaluation exclusion, and it is, in our view, d

VII. Coverage Estimate — Quantum Analysis A. Covered Components The following table sets forth the estimated amounts that qualify as covered "Loss" under the Policy: The defense cost estimates reflect our current projections based on the scope of work anticipated through the administrative appeal phase. If the matter proceeds to judicial proceedings before the Greek administrative courts, or if the DG TAXUD referral

VIII. Response to Oceanos Reservation of Rights — Strategic Considerations A. Grounds for Challenging the Reservation As set forth in detail in Section VI above, both exclusions cited by Oceanos in the Reservation Letter require elements of deliberateness and intent that are not present in this case. The factual record provides a strong basis for challenging the Reservation and demanding that Oceanos acknowledge cove