Lloyd's Maritime and Commercial Law Quarterly
The future of open registers in the European Union
Michael Frendo *
The spectacular rise of open registers has meant a steady erosion of shipping tonnage registered in the Member States of the European Union. The EU continues to seek to stop this migration and attract back shipping tonnage, in order to safeguard employment and promote the competitiveness of the EU fleets in the global shipping market. After the failure of EUROS, the 1997 Community Guidelines on State Aid to Maritime Transport allow the reduction to zero of taxation and social charges for seafarers and of corporate taxation, and the replacement of corporate tax by a tonnage tax. The possible addition of the shipping registers of the candidate countries, Malta and Cyprus, would signify a “return” of tonnage to the EU and place it in a position of global superiority.
The rise of open registers
The past decades have seen major changes in the world shipping industry, including two important aspects. First, the controlling interest in shipping has migrated to countries such as Japan, Norway and Greece, to mention three major shipping nations, to the detriment of traditional maritime countries such as the United States and the United Kingdom, France and other Member States of the European Union. Secondly, open registers have risen to the forefront of the leading shipping fleets in the world and have absorbed the migration of shipping tonnage from the traditional shipowning States.
This has placed the issue of ship registration at the top of the agenda of the international maritime community. Ship registration grants nationality to a vessel and provides proof of title. Every ship needs to have its own nationality in order to enjoy the exclusive jurisdiction of the Flag State over the high seas. In the words of the Privy Council, this is needed “in the interest of order on the open sea”.1
It is national laws which regulate registration and the grant of the right to fly a national flag.2
The registration and flag of the vessel, not its ownership, determine the nationality of the ship.3
It is the novelty of the decision in the Muscat Dhows
case that set the scene for registration’s taking a juridical
* LLM (Exon), LLD, MP, Managing Partner of Gatt Frendo Tufigno, Advocates, former Minister of Shipping, Malta; Part-time Senior Lecturer in European Law, University of Malta. This paper was presented at an International Conference entitled “EU Membership: The Challenge for Maritime Malta” organized by the Malta Maritime Law Association in collaboration with the European Maritime Law Organization on 29 October 1999.
1. Naim Molvan
v. A.-G. for Palestine (The Asya)
[1948] A.C. 351; 81 Ll.L. Rep. 277 (Palestine P.C.) The case of the vessel Asya,
in Michael Frendo and Jonathan Pace, “Current Trends in the Regulation of Ship Registration”, in Elda Turco Bulgherini, Studi in Onore di Antonio Lefebvre d’Ovidio
(Giuffre, 1995).
2. UNCLOS 1982, Art. 91 and Geneva Convention on the High Seas 1958, Art. 5.
3. Muscat Dhows
case, Permanent Court of Arbitration at The Hague, Hague Court Reports 196, 93.
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