Opinion & Comment:
JAMAICA’S OPEN REGISTRY FOR INTERNATIONAL
SHIPPING
By: Captain Ed Dangler, Esq.
(Published February 2004)
The concept of a registry for a country’s shipping engaged in international trade can be found as far back as the period of the Codes of Oleron and even some references to the earliest days of ocean commerce by the ancient Phoenecians. The reason for registration was to have a public record of the vessel and the nation state to which its jurisdiction and identification pertained. The “flag state” then, as now, determines the nationality of the vessel and maintains a registry of such vessels possessing that nationality.
To this date one cannot finance, purchase, or sell a vessel without it being registered to some country. Registration provides a means to protect proprietary interests, including but not limited to prima facie evidence of mortgages, title, and a legal regime for vessel, crew and commercial interests. Traditional registries were usually limited to those individuals or entities that were physically located or otherwise had allegiance to the registry nation state.
“Open” registries, on the other hand, while not as ancient as the traditional “closed,” have actually been in existence longer than most realize. References can be found to the use of the Spanish flag by English merchants in the 16th century, when trading in the West Indies was limited to Spanish vessels claiming monopoly rights. There exist similar references to British fishing fleets using Norwegian flags during the 19th century. The modern phenomenon of “open” registry is basically one expanded in the 20th century, where Canadian vessels engaged in the rum running trade were able to register with Panama. As early as the1920s, U.S. ship owners benefitted from “open” registries through transfer of flag from U.S. to other nations, particularly for the purpose of selling liquor onboard passenger vessels when Prohibition Acts entered into force for U.S. flag vessels. Shortly thereafter, we see many patentes de navegacion issued by not only Panamanian Consuls, but by U.S. Consuls acting for Panama, and further transference of U.S. Flag vessels of the United Fruit Company to Honduras. Post World War II saw some dissatisfaction by several owners as to the Panamanian flag, and with the strong support of a former U.S. Secretary of State Edward R. Stettinius, Jr., an active “open” registry developed in Liberia. In fact, the first ship to enter into the new Liberian registry did so in 1948 with the flagging of the super tanker WORLD PEACE owned by the Niarchos interests.
In spite of changing economic situations in the shipping industry, it is now well accepted that “open” registries are here to stay. William O’Neill, Secretary General of the IMO, in an address to the IMO Assembly recently stated, “ . . . international shipping is now virtually in the hands of the developing world, and the process is irreversible.”
While some of Jamaica’s Caribbean neighbors have been active players in “open” registry activities since the early 20th century period, Jamaica has only recently considered this option and has developed a unique and very efficient registry mechanism. Based on recent problems with other flag states, including potential U.N. sanctions against Liberia, interest has arisen in many sectors of the maritime industry to look toward Jamaica as an acceptable alternative.
During a recent address by Admiral Peter L. Brady, Director General of The Maritime Authority of Jamaica, to attendees of the Monaco International Yacht show, he stated he believed Jamaica can provide for the cruise vessel industry, in particular, advantages which mega yacht and tanker owners/operators are already actively pursuing. Admiral Brady stated:
“International ship registration is highly competitive. However, we are confident that Jamaica can establish a presence in this market, as we have already put in place the necessary legal and administrative framework to support the establishment of a quality register. The features of our registry include:
- A 24-hour service, backed by a state-of-the-art infor- mation technology system, that will provide for e-commerce transactions in the short term. The advanced IT linkup will ensure access to the service of the Registry from almost anywhere in the world, allowing ship owners to get necessary information, documentation or feedback to facilitate smooth operation of their vessels.
- Double taxation treaties with several states.
- The range of fiscal incentives which are standard in the industry (e.g,,
no taxes on income, capital gains,
etc.), as well as operational incentives. - A modern legal regime based on the English Common Law system, with adequate provisions as to mortgages and innovative provisions to encourage ship financing.
- Competitive pricing without compromise to quality of service.
- Trained staff in both the commercial and technical aspects of shipping
to ensure efficient registration
services and appropriate oversight of technical standards. - Highly trained seafarers.
- A global network of Embassies and Consulates to provide support to our ship owners worldwide.
- A network of non-exclusive surveyors.
- Agreements with the main IAACS members.”
In discussing the current status of the Jamaica Ship Registry with staff of the Maritime Authority, it was brought out that the long-term goal is for more large-scale development of the country’s shipping industry. Thus, the registry services are but one facet of the long-range plan for the ship owning community to establish administrative or operational offices in Jamaica, which has the infrastructure and amenities to support the maritime industry. Of particular interest is the fact that the only IMO-accredited training institution for maritime officers in the Caribbean area is located in Jamaica and is included in the first “white list” published by the IMO.
As an island state, shipping and related activities play an important role in development of the local society. Jamaica’s shipping policy, as codified in the Shipping Act of 1998, enforces the concept of compliance with International standards, age limits on vessels, and requirements for surveys as a pre-condition for permanent certificates of registry. Jamaica is internationally accepted as an active Port State Control state, meeting IMO targets for inspections. It has been a member of the Caribbean MOU on Port State Control since its inception in 1995, and is now the host state of the Secretariat.
It appears that ship owners around the globe will be examining the opportunities presented by the Jamaica “Open” Registry as an attractive alternative in flagging and registration decisions.
Captain Ed Dangler started his nautical career of a half-century by enrolling at the State University of New York Maritime College. After four years and several training cruises to Mediterranean ports, he was awarded a license as Third Mate, Steam and Motor Vessels, Unlimited, a commission as Ensign USNR, and a degree of Bachelor of Science in Marine Sciences.
He eventually retired from the Navy with the rank of captain. As a merchant seaman he climbed the ladder, sailing on U.S., Israeli and Indonesian flag vessels, up to and including Master. He later held positions in a large aerospace company, with responsibilities for systems engineering and marketing of highly classified and commercial undersea research projects. He also continued his education and was awarded an MBA from U.S. International University. He became affiliated with Kaye, Rose & Partners as a maritime consultant a decade ago, continued in that role while a law student and after passing the California Bar in 2000, and continues to provide the firm and its clients maritime technical and legal support. Next month he will relocate to the Bay Area and take up residence in the firm’s San Francisco office.
During the period 1977 through 1982, Captain Ed served as a technical advisor to the U.S. delegation to the United Nations Conference on Law of the Sea. He has written and lectured extensively on this subject, both overseas and in the United States. He is currently an adjunct professor at Western Sierra Law School and guest lecturer at Thomas Jefferson Law School. In 2003, he was appointed by the State of California, Department of Fish and Game as the Office of Spill Prevention and Response’s Harbor Safety Committee’s voluntary Legal Counsel. He is a member of the Board of Governors of the Port of San Diego Propeller Club and is an active member of the Monaco Propeller Club. He is fluent in French, Spanish and Indonesian languages.
