Page 67

Registration proves an excellent means of identification, not only for general reference purposes but to provide the legal basis for all commercial contracts; to facilitate court actions (claims and litigation); and to facilitate mortgages and maritime liens. For practical purposes, not all ships (pleasure vessels, fishing vessels or small craft) are required to be registered. The rule for granting of nationality cannot be uniformly applied to all ships. Certain ships may be exempted or may be subject to different rules. In many states, ships not exceeding a certain length usually less than 24 meters or not exceeding a certain tonnage usually less than 15 gross tons are exempted from registration under their respective Merchant Shipping Acts or Maritime Codes. Different states set different criteria for registering ships, such as the ownership, crewing (manning) and management of the ship by nationals, as such different registration regimes have resulted and could be categorized as open, closed and second registers. Open registers allow ships beneficially owned by non- nationals to fly the flag. Closed registers stipulate stringent national requirements regarding ownership and manning (crew nationality) and does not allow non- nationals to fly the flag. On the other hand, second registers established by traditional maritime countries have flexible manning requirements but maintain strict national requirements on beneficial ownership of ships. Over the past sixty years, several open registry countries have emerged and continue to be emerging, thus creating a phenomenon in the international shipping community, providing ship registration facilities or services to ship-owners from other countries.

nationality to ships. Accordingly, Article 94 of the United Nations Convention on the Law of the Sea (UNCLOS 111), 1982 provides: 1. Every State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are entitled to fly‌ 2. Every State shall issue to ships to which it has granted the right to fly its flag documents to that effect. Every state maintains ship registers in which particulars of merchant ships, pleasure vessels, fishing vessels, boats and small craft flying its flag are entered. The entry of a ship in the register of a state is known as ship registration. The responsibility for administering the registration of ships is usually entrusted in the Maritime Administration or Maritime Authority of that state.

Essentially, countries operate open registers for economic reasons. The main income comes from the registration of ships and annual fees. Apart from the direct income accruing from fees or levy, economic benefits may accrue indirectly through employment of nationals whether directly or indirectly through the provision of various services to the ship. However, in order to develop and maintain a high quality competitive international ship registry most open registries have to strike a good balance between adherence to high international shipping safety standards of the International Maritime Organization and the commercial concerns of the shipowner as it relates to competitive fees; competitive fiscal and other incentives; efficient and effective legal and administrative infrastructure providing a high level of professional service; simple registration procedures; flexible manning requirements on the nationality of crew; good communications infrastructure; political, social and economic stability; and effective marketing.

Ship Registration is a legal and administrative act by which in addition to nationality, collateral rights and duties are conferred on a ship. These rights include the right for diplomatic protection and consular assistance by the flag state; the right of naval protection and the right to engage in certain activities (fishing or trading between ports of the flag State) within the territorial waters or jurisdiction of the flag state. BusinessFocus • December/January 11/12

| 65

Business Focus Antigua Issue 40  
Business Focus Antigua Issue 40  

As 2011 comes to a close and we enter 2012, the forecast for the world economy continues to be news of job cuts and hints of a "double dip"...