What are the determining factors when registering a ship under a flag? i.e.- Why do so many vessels fly und?

Question

What are the determining factors when registering a ship under a flag? i.e.- Why do so many vessels fly und?

Answer 1

Pre-requisites for registering a vessel are:-

Bill of sale (duly authenticated) from the previous owner, non-encumbrance and deletion certificates, port clearances and a 'Class' certificate from the appropriate Shipping Register.

A complete ship plan including details of hull, machinery, electrical and radio and navigation aids.

The 'Flag' is determined by the country of registration. The vessel must fly this flag at all times in order to be easily identified.

I do not understand what you mean by "why do so many vessels und". Please elucidate this in order to get a correct answer.

Answer 2

so as to pay as little taxes as possible

Answer 3

merchant ship owners prefer to fly their flags from neutral countries that won't or can't takeover their ships in a time of war. They also look for countries that won't tax and regulate them to death. Thus most ships fly a Panamanian or Liberian flag neither country will take over the ship or tax it too much nor do they regulate them.

Answer 4

govt regulations easy,,,low or no insurance,,,no min wage for crews.... i remember in the 60s and 70s..." a Liberian freighter has sunk..."

Answer 5

Simple explanation:

Quite straight forward really. Not every nation is as particular in applying regulations with regard to working conditions and safety. The UK is quite stringent on both. It is therefore easier for ship owners to sail under a flag of convenience, such as that of Liberia, where safety and working conditions are slacker and less rigidly enforced.

Long Explanation:

Flags of Convenience - described by Franz Fishler, former EU Commissioner for Fisheries, as "the scourge of today's maritime world" - represent one of the key ways by which fishermen can circumvent management and conservation measures and avoid penalties for IUU fishing. Under international law, the country whose flag a vessel flies is responsible for controlling its activities. However, certain countries allow any vessel, regardless of nationality, to fly their flag for a few hundred dollars, and then ignore any offences committed.

Unscrupulous ship-owners have long used Flags of Convenience (FOC) to evade tax rules, licence regulations, safety standards and social requirements for the treatment of crew. In more recent years, however, as fishing fleets have increased and marine resources plummeted, FOC have increasingly been used as a means of avoiding measures taken by countries or regional fisheries organisations to manage fisheries and conserve stocks.

Flags of Convenience facilitate IUU fishing in a number of different ways. Firstly, FOC registration greatly reduces operating costs for vessel owners. They can avoid paying for fishing licences, onboard observers, vessel monitoring systems or catch documentation systems. In addition, vessel owners can avoid regulations and laws on aspects of life at sea such as insurance, training of crew, and purchasing safety gear, all of which cost money. Crewmembers employed on FOC vessels are often subject to abuses, including very low wages, poor on-board conditions, inadequate food and clean drinking water, and long periods of work without proper rest leading to stress and fatigue.

The second loophole reflects the difficulty of managing an open access resource such as the open ocean, which all nations are equally entitled to exploit. In international waters, measures to regulate fishing only apply to countries that are members of regional fisheries management organisations (RFMOs). Therefore, if a vessel re-flags to a State that is not a party to these agreements - and often FOC countries are not members of RFMOs or other fishing agreements - then it is free to fish with total disregard for regionally agreed management measures. FOC vessels are therefore generally considered to be beyond the reach of international law when operating in international waters. Further complicating the situation, however, is the fact that in recent years many FOC countries have become members of RFMOs, and do, for a while and up to a point abide by regulations, making them much more difficult to attack.

Thirdly, registering under a Flag of Convenience is quick, easy and cheap, and can be performed over the internet (for example, see http://www.flagsofconvenience.com). IUU vessels can therefore re-flag and change names several times in a season to confuse management and surveillance authorities, a practice known as "flag hopping". Backed by shell companies, joint-ventures and hidden owners, FOC are therefore considerable constraints to combating IUU fishing as they make it extremely difficult to locate and penalise the real owners of FOC vessels that fish illegally. A key aspect of combating IUU fisheries is therefore to ensure greater transparency in the flagging and ownership information of fishing vessels. Ideally, they should be registered in publicly available, up-to-date and reliable databases where the basic information would appear: current and previous vessel names and flags, owners and beneficial owners, country of ownership, details of IUU-related prosecutions, call-sign, tonnage, etc.

Generally, a "flag of convenience" country is considered to be a country with what is called an open registry, which makes a business from granting its flags to all kinds of vessels, including fishing vessels, that are owned by nationals from other States. Classic examples include Panama, Belize, Honduras, and St Vincent and the Grenadines.

The definition of FOC country can also be extended to include any country granting authorisation to a vessel to fly its flag as well as authorisation to fish, if that country lacks the resources (or the will) to monitor and control vessels flying its flag, especially when the fisheries being plundered do not belong to it. For instance, Equatorial Guinea and Sierra Leone have been subject to trade sanctions by the International Commission for the Conservation of Atlantic Tunas (ICCAT) because vessels flying the flags of these countries were fishing in contravention of ICCAT rules. These sanctions were lifted in 2004 as both countries took steps to delete the offending vessels from their registries - the only action that they could take to manage the activities of their high seas tuna vessels.

A very large proportion of IUU fishing could be eliminated if the loophole in international law that allows states to issue flags of convenience was closed. However, up to now, all attempts to eliminate the FOC system have been unsuccessful and, as a result, FOC fishing vessels have proliferated over the past 20 years.