A flag state with the lowest fees or the least intrusive regulatory regime is fine when things are running smoothly, but when problems arise you will find out the value of a good flag state. And with Port State Control visits aboard on the increase and detentions more frequent, you’ll want a flag state that can guide you through these issues. “In the Isle of Man,” says Mitchell, “our survey team has developed a unique scheme aimed at helping a commercial yacht navigate Port State Control (PSC). Each commercial yacht
gets an appointment with an experienced surveyor who will help identify areas that PSC may take an interest in and ensure records and paperwork are up to date.”
The attraction of open flags or offshore registries is sometimes seen as low tax implications, low transparency of ownership, low regulatory burden. The offshore Cayman Islands holds approximately 15% of the world’s yacht fleet over 30m on its Ship Register, for varying reasons the most popular of which includes tax savings. The Commonwealth of Dominica also offers an international open register that it operates along the lines of an exclusive club: It claims to be one of the fastest growing registries in the world. A similar set up can be found at the Cook Islands open register which operates via a network of Deputy Registrars around the world.
Cook Islands requires that all ships comply with all of the relevant international maritime conventions but do not impose any additional requirements beyond IMO Conventions and IACS Unified Interpretations. Matheson explains, “Registration of a vessel upon the Cook Islands Ships Registry is governed by the Ship Registration Act 2007; The Act requires that a vessel be owned by or on a demise charter to a ‘qualified person’.”
“There are three ways in which an owner can become a Qualified Person; International Company Incorporation, Foreign Company Registration or as an Island Trust. Each route has its benefits for specific owners and nationalities, so one definitely needs to take professional advice and find the correct solution for the yacht’s registration.”
But MCA LYS sees no benefits in open registers. Says Marshall,”The UK Flag is more interested in attracting owners looking for a tailored, personal service at a competitive cost.” And at the IOM Mitchell explains that the registry tries to limit any restrictions and can welcome clients from around the world. “As a member of the Red Ensign Group of British flags we operate a robust but pragmatic legal framework to ensure ships and yachts registered in the Isle of Man meet high standards of safety and quality. The International Transport Workers Federation (ITF) maintains a list of Flags of Convenience (FOCs) which are traditionally offshore registries; you will not find the Isle of Man on that list. Onshore registries or national registries traditionally have restrictions on ownership which include citizenship, domicile, corporate structures etc.” The final and real ‘benefit’ echoed by all the registries we have spoken to, is above all to provide a service. All the registries are moving more in the digital certification systems to make survey and general certification simpler, but overall, as Matheson agrees, “It doesn’t matter if the flag is an open or a closed registry, what matters is the quality of service it offers and if it can keep the vessel moving without interruption.”
So check that the registries have representation across the globe or at least in the main yachting hubs and that they have technical offices and personnel that are qualified. But perhaps you should even ask the captain next door for his experiences with a specific flag.
The Paris MoU had to scale back efforts like everyone else over the past 18 months resulting in decreasing numbers of inspections, refusal of access orders, detentions and deficiencies. In 2020 there were 7 bans and over the past 3 years 55 ships have been banned.
The detention percentage fell slightly to 2.81% (from 2.96% in 2019). The number of detainable deficiencies decreased to 1,942 (from 2,964 in 2019). The number of inspections carried out was 13,148. Clearly a substantial decrease to 2019: 17,913.
The Paris MoU applies largely to the world of commercial vessels, a far cry away from the superyacht industry. And flag states’ performances across the world fluctuate a little in the right direction with 39 countries on the White List, 22 on the Grey List and 9 on the Black List.
Despite sitting comfortably at 13 (UK MCA) and 18 (IoM) in the middle of the White List the UK and Isle of Man registers are not complacent. The MCA is particularly proud of the direct personal contact it offers its clients and its current goals are ‘to digitise every process that can be digitised’ and simplify the fee arrangement. Marshall adds, “We are also fully committed to the decarbonisation of the maritime industry and have taken a leading role in this process internationally, supporting innovation through regulatory flexibility. We are modernising crew training and certification to ensure the crew of tomorrow are properly prepared for the new challenges they will face.”
The IoM has similar goals to satisfy its clients. “We know that yachting is the ultimate fast paced environment and clients can’t be sitting around waiting for a flag state to take a decision. So we undertake that we’ll be quick to react and we’ll work with our clients to find a pragmatic solution to their regulatory issues,” explains Mitchell. The Register also recently launched the first ever flag state sponsored crew welfare app called ‘Crew Matters’ which allows access features such as live exercise classes and mental health support.
BEYOND THE HORIZON
Changes on the horizon include the recent introduction of the Ballast Water Management convention and the D-2 dates are coming due at the present time; this is the date by which yachts with ballast tanks must have a Ballast Water Treatment system fitted. The date is aligned with the renewal date of the yacht’s IOPP certificate.
Cyber risk is another feature of the future and IMO requires any yachts that have Safety Management Systems to address potential cyber risks. Mitchell adds, “For yachts which are not required to have a Safety Management System, it is still a good idea to consider these risks!”
With climate change, cyber threats and an ever more digitised world, cruising on a yacht is not necessarily always plain sailing, but the support of a robust, respected ship registry will help keep you steering a good and compliant course through the choppy waters of life on the open seas.
“Fair Winds and Following Seas.”