Types of Ship Registers Are Divided Into Classes
Transportation and Maritime Services
A ship registration system has existed since ships began to sail under national flags, which was around a thousand years ago. The ‘nationality’ of a ship, which is determined by its affiliation with different countries, provides not only protection of the owner’s rights, support, and other advantages, but also responsibilities and certain limitations. The act of registering a ship means that the ship is subject to the jurisdiction of a particular country. The methods and approaches used for ship registration, on the other hand, were not rigid and inflexible. Aside from the national registers, which existed only until the 1980s, there were no other types of ship registration practices. However, several developing countries, such as Panama, Liberia, and the Bahamas, were responsible for the emergence of so-called “open registers.” The conditions were more flexible, and the costs were lower, than those offered by national registers. Ship owners were drawn to open registers because they allowed them to become more competitive in comparison to their competitors. The response of the developed countries was to establish international or second registers that provided greater opportunities than national registers while also providing better technical support and service to the member-vessels of those registers. According to the current literature review, ship register types are broadly classified, with particular emphasis placed on the four registering companies: NIS (Norwegian Ship Registers), NOR (Norwegian Ship Registers), IOM Ship Register (Isle of Man), and UK Ship Register.
Ship Registers are defined, classified, and have specific functions.
Rayfuse (2004) argues that, according to existing international legislation, ships are only permitted to sail under the flag of a single country at any given time. As a result, the concept of a ship register or flag state refers to the fact that a vessel is addressed to the state that is in charge of regulating the vessel (Harwood, 2006). This registration, on the other hand, will necessitate additional certification and inspection of the ship. Ship registers place a high priority on the enforcement of environmental regulations and the prevention of polluting the environment (Raikes, 2009).
The entry of foreign owners and cargo or passenger transportation companies into the Norwegian internal market is prohibited. Foreign vessels are not permitted to be transported between Norwegian ports under the terms of the NIS legislation. This disadvantage, on the other hand, is only recognized by foreign owners. It is widely acknowledged that the Norwegian authorities have a competitive advantage in the sea transportation market because they protect themselves against additional competition.
It is not possible for foreign ships to seek Helpance from their home country’s technical and financial support services.
In accordance with Norwegian law, shipowners are required to coordinate their payments to their employees.
Participation of the Norwegian representative in all communications with the Norwegian government is mandatory under Norwegian law.
Ordinary Register of the Kingdom of Norway (NOR)
Background
The Norwegian Ordinary Register (NOR) shares some characteristics with the Norwegian Industrial Register (NIR), but the primary difference is the class of the register. According to the classification described above, the NOR is a type of register that is found in national governments. This means that it draws attention to the direct connection that exists between the nationality of the owner and the host country. The NOR register can be thought of as a ‘closed’ register. When it comes to vessel registration, the NOR legislation provides for two options: mandatory registrations and voluntary registrations. It is mandatory to register all Norwegian vessels with a length of 15 meters or more in order to operate on the Norwegian waters. It is not necessary to register with the NOR if they are already registered in other countries (either through international or second registration).
The voluntary option of registration is available to Norwegian vessels with a length ranging from 7 to 15 meters, which can be applied to. According to the NOR, other vessels that are not used for commercial purposes can also be registered on their own initiative. Floating docks and cranes, hovercrafts and installations, and moving platforms are all eligible for registration on a purely voluntary basis. There are a few exceptions to this rule, which are outlined in more detail in The Act Concerning the Registration and marking of Fishing Vessels. In all other cases, vessel registration is required.
The NOR has some limitations.
As stated by the Organization for Economic Co-operation and Development (2005), the NOR’s primary limitations can be attributed to the fact that it is a national or closed register. In particular, in order to be registered with the NOR, the shipping company must be owned by a citizen of the European Union. Nonetheless, non-EEA ownership is permitted, but the share held by EEA citizens must account for at least 60% of the total share capital. When compared to the NIS, such a restriction does not exist in that system. When a vessel is registered in the NOR, the company that owns the vessel is transformed into a limited liability company. A cargo or passenger transporter’s headquarters must be located on the territory of the European Economic Area. The crew of a vessel that has been registered in accordance with NOR standards is subject to similar requirements. The vast majority of the crew members, including the captain, must be citizens of the European Economic Area (EEA) who have resided in the EEA area for the two years prior to the voyage.
Another restriction relates to the management of the registered vessel’s technical and financial systems. Only a Norwegian technical service provider is permitted to provide technical support for a vessel under NOR legislation. Although the maintenance can be performed in another country, the company must ultimately be based in Norway.
The total number of ships that have been registered
In 2007, the total number of vessels registered in the Norwegian Register of Shipping (NOR) was 749. It increased by 2.8 percent in 2008, reaching a total of 770 in the year. It was calculated that the NOR registration in tonnage amounted to 2,411 gross tons in 2007. In 2008, this figure decreased to 2,305 gross tons, which was a decrease from the previous year. It is difficult to make generalizations about the trend in NOR registrations because the past two years have seen a small increase in the number of registrations but a decrease in the tonnage.
Advantages
The following are some of the benefits that are commonly associated with the NOR.
High-quality support and protection from foreign competitors are provided to vessels operating in the inner market, which is advantageous to them.
It is important to note that the development of sea transportation businesses for various types of vessels is greatly Helped by a sophisticated and highly experienced maritime tradition.
The fact that the country has two types of ship registers, one for national ships and another for international ships, is advantageous to ship owners.
Disadvantages
The NOR registration for vessels has a number of drawbacks, which are listed below.
The registration fees are not stable and fluctuate from year to year depending on the requirements of the Maritime Act, which is currently in effect.
There are only a few options for technical Helpance available to those who provide this service in their home country.
In conclusion, because the Norwegian International Ship (NIS) Register and the Norwegian Ordinary Registers (NOR) are both owned by the same country, they have a great deal in common. There is one significant difference between the two types of registers, and that is that they are classified into two different register groups: national (NOR), international or second (NIS), and international or third (NIS). With the NOR, the registered ships are completely bound to the host country of Norway. In terms of ownership, collaboration with maintenance and support services, as well as the location of the company’s headquarters, there are some differences to note. Foreign ownership is permitted by default under the NIS, but mandatory service remains a restriction on ownership. Furthermore, companies are required to have a Norwegian representative on their staff.
Registrar of Companies in the United Kingdom
Background
The Maritime and Coastal Agency (MCA), which regulates and monitors all maritime activity in the United Kingdom, is responsible for maintaining the UK register. Because the United Kingdom is a monarchy, all of the country’s activities are ultimately accountable to Her Majesty the Queen of Great Britain. The register in the United Kingdom is a ‘closed’ register.
The following are the responsibilities of the UK register:
Merchant ships are vessels that transport goods.
Vessels for fishing
Yachts of a certain size
Pleasure Crafts/small ships are vessels used for recreational purposes.
All of the vessels listed above can register and receive a flag from the United Kingdom, which has 116 ports (according to the UK Ship Register, 2010). However, despite the fact that the register contains a list of restrictions on who can be registered, it encompasses a fairly broad range of geographical locations (e.g. British Dependant territories citizens, EEA countries, those that have a registered business in one of the EEA countries).
The Advantages of Having a UK Flag
On the Paris MoU list, the UK flag is ranked third (lowest in terms of risk) and is described as follows: “The ‘UK Flag’ is considered to be one of the best performing flags in the world, ranking third (lowest in terms of risk) on the Paris MoU “White List” (UK register, 2010). The register is pleased to provide Helpance to their customers both before and after they have registered. When it comes to finances, it rewards its members with low annual renewal fees and makes a contribution of approximately £1.4 million to a Crew Relief Cost Scheme.
Furthermore,
” Ships registered in the United Kingdom are not targeted by port state control regimes in the world’s major trading areas,” says the UK government.
Owners and operators will not be charged for the approval of ISPS plans or for verification audits.
An international reputation for expert advice and guidance, as well as a proactive leadership role at the International Maritime Organization, the European Union, and the Quality Shipping Committees
World-wide security threat level information is provided to UK-registered ships, with Helpance for British nationals on board provided by British Consuls and Royal Navy protection contingent on availability of assets and the specific situation.
Quality Assurance services include certification to ISO 9001 and ISO 14001 standards, as well as audits conducted in accordance with ISM guidelines.
Alternate Compliance Scheme: A voluntary scheme that streamlines the survey and certification process by minimising duplication of effort with Classification Societies. “Eligibility is contingent on the fulfillment of certain requirements” (UK Register, 2010).
Disadvantages of the UK Flag
The National Audit Office (2009) has reported that the efficiency with which the MAC operates has deteriorated over the years. Until 2000 the agency have managed to carry out all of the required surveys in order to check the quality of the ships that operate under a UK flag. However, by 2007, the targets were not met. Furthermore, it was predicted, that the targets would not be met again in 2008-2009. “Failure to meet its targets will increase the risk that UK vessels which do not comply with regulations operate without detection in UK ports and waters” (National Audit Office, 2009, p.5).
In order to be efficient, the MAC needs more resources However, at the moment, even the cost of surveys are not met by the revenues that are brought in by the owners of the vessels.
Another worrying fact, is that the quality of the UK flag, which has been enjoying a very good reputation over the years, is starting to disappear. The audit has found that an increasing number of UK flag holders are being detained overseas due to the inability to pass quality checks. Although relatively this detention number is lower compared to other flags, it has been argued that the difference is getting smaller every year. Partly, because the quality of the other flags is increasing and partly because the quality of the UK flag vessels is deteriorating.
Registered Ships
In order to increase the growth in registered ships, the Government has introduced a tonnage tax in 2000. In turn, instead of charging vessels on the profits that they make off their activities, they are now charged on the tonnage of their vessels. This regulatory measure has allowed the UK register to see a good increase in the number of vessels. “By the end of 2007 the UK registered merchant fleet had grown from 1,050 to 1,518. Of these, 646 vessels were trading vessels compared with 417 vessels in 2000” (National Audit Office, 2009, p.5). The tonnage that was brought in also increased. In 2007, the average tonnage per vessel increased from 11,000 to 19,000.
This increase had an interesting effect on the number of overseas surveys that the MCA had to perform in 2007. Nearly a quarter of them had to be done overseas. This is a large increase, considering that in 2000-2001, 5% were performed overseas, while the rest were done domestically (National Audit Office, 2009, p.5). Large increases were also seen in the number of Certificates of Equivalent Competency that were issued, from 3,244 in 2003 to 4,722 in 2007.
However, although absolute numbers have increased, the overall rate of growth has declined. In 2007, the fleet grew by 10%, compared to 13.33% average growth from 2001 to 2003. The MAC argues that too many external factors are at play, which do not allow them to enhance the growth with more control. For example, the MAC found that some shipping companies were happy to wait and see whether the EU would bring in a tonnage tax as well, before making the final decision on their flagging. In turn, this shows that although the UK ship register provides a large number of benefits, they are not relatively strong enough to become a deciding factor for the shipping companies.
Isle of Man Registry
Background
Isle of Man Registry (IOM) works closely with the Isle of Man government to provide relevant solutions to its members. Tynwald (the local parliament) is ultimately answerable to the Crown, however, as has long been agreed, the UK government does not legislate the IOM, and therefore, shipping legislation is approved by Tynwald alone. “The Isle of Man operates a Category One, Red Ensign Group British Register that provides for the registration of ships of any size or type. The Isle of Man Register is a component part of the British Register” (The Red Ensign Group, 2010).
IOM registry is relatively new, established only in 1984. Over the years, the IOM has seeked local private solutions for its clients, and today works closely with local marine lawyers, accountants, P&I clubs and even banks, bringing a diverse, ‘one-stop-shop’ solution to anyone who registers.
Due to its offshore jurisdiction capabilities and proximity to Europe, IOM can provide a highly competitive solution. The IOM strongly competes on its tax exemption regime, it’s financial centre capabilities and developed technical solutions whilst on the island.
The IOM registers a large number of different vessels, including VLCC, superyachts, fishing boats and pleasure crafts.
Advantages of the IOM
“The Isle of Man Ship Registry has recently been voted “best in the world”, claiming the top spot in the international shipping industry round table annual flag state performance table” (PDMS, 2008). Like the rest of the registrars, IOM conveys that it will provide the ship owners with the cost-efficient and customer-friendly solution. “Quality is key to the Isle of Man, where our reputation as a high quality jurisdiction makes us the flag of choice for today’s modern maritime business” (IOM, 2010). Furthermore, the website states that this register’s customer service has a ‘can-do’ approach.
” A professional Ship Registry providing a high quality of service available 24/7 with fast response to queries
Reasonable costs and no annual tonnage dues
A favourable taxation regime designed to encourage business
