"Flags of Convenience" or "Open Registry" have developed in recent years as an economic necessity allowing costs to be cut in response to an over-tonnaged marketplace where low to non-existent profit margins were the norm under the registers of the tr...
"Flags of Convenience" or "Open Registry" have developed in recent years as an economic necessity allowing costs to be cut in response to an over-tonnaged marketplace where low to non-existent profit margins were the norm under the registers of the traditional maritime nations.
As such, it has been used to characterize national maritime sectors, however, there is still not complete agreement as to its proper definition and objectives.
According to the ITF, the most important of these criteria in classifying a register as an FOC is whether the majority of vessels on the register are foreign owned or controlled.
Second Registers are sometimes referred to as "Offshore" or "International Registers"and generally perceived as a response by the TMNs to the steady decline of tonnage registered under the flags of such countries.
From the perspective of the ITF, a second register emulates an FOC in nearly all its criteria except that tonnage mostly consists of nationally-owned ships and the register usually has conditions in place which are acceptable to the unions of the flag state.
Most of the Second Registers were specially created during the 1980s with the specific purpose of stemming the tide of flaggong-out.
In addition to the definitive lists, where a vessel operates under the flag of a second register but ownership lies outside the flag state, ITF will categorize and treat it as an FOC ship.
Conversely, where owners of vessels are genuinely located within a designated FOC state, then the ITF advocates that their ships should not be treated as FOC.
The NIS was established by the Norwegian government in 1987 as a means to halt this reduction of the Norwegian fleet and thereby maintain Norway's traditional maritime infrastructure.
Foreigners owned 54 per cent of the total NIS tonnage in 2004. This is an increase of 21 percentage points since 1998. The Norwegian-owned NIS tonnage was below 10 million gross tonnes in both 2003 and 2004. This is the first time this has happened since the NIS was established in 1987.
The Singapore Registry of Ships (SRS) was established in 1966 and efforts to promote it continue. The Singapore merchant fleet has been growing at a rate of about 10% in recent years.
The autonomous Hong Kong Shipping Register was set up on 3 December 1990 under the Hong Kong Merchant Shipping (Registration). Upon the reunification with the People's Republic of China (PRC), the Hong Kong Special Administrative Region (HKSAR) is authorized by the Government of the PRC to maintain a separate shipping register and issue certificates using the name "HONG KONG, CHINA."
This article analyses the growth of the Norwegian International Ship Register(NIS), Singapore Registry(SRS), Hong Kong Shipping Register and the basis for this growth. By way of introduction, the establishment of the NIS, SRS, Hong Kong Shipping Register and the motivation for the changes in main country shipping policy are presented.