The convenience flag (FOC) is a business practice in which the ship owner enrolls a merchant ship in a list of state ships other than the ship owner, and the vessel raises the country's civil base, called the flag state. The term is often used in contemplative terms, and its practice is considered controversial. Each merchant ship is required by international law to be registered in a registry made by a country, and a ship is subject to the laws of that state, which are used also if the ship is involved in a case under the admiralty law. The shipowner may elect to register ships in a foreign country which enables him to circumvent the regulations of the owner country which may, for example, have more stringent safety standards. They may also choose jurisdiction to reduce operating costs, bypassing laws that protect wages and working conditions of seafarers. The term "comfort flag" has been used since the 1950s. Registries that do not have citizenship requirements or shelter for ship registration are often described as open registry . Panama, for example, offers the advantage of easier registration (often online) and the ability to hire cheaper foreign labor. Furthermore, foreign owners do not pay income tax.
The modern practice of ships registered in foreign countries began in 1920 in the United States when shipowners, frustrated by increased regulations and rising labor costs, began registering their ships in Panama. The use of open registration continues to increase, and in 1968, Liberia grew beyond the UK as the largest ship registers in the world. In 2009, more than half of the world's merchant ships were registered with open registries, and nearly 40% of all world fleets, in terms of deadweight tonnage, were registered in Panama, Liberia and the Marshall Islands. In 2006, up to 20% of high-sea fishing vessels were registered in countries not connected to them. According to IHS Markit, in March 2017, Panama has 8,052 ships in the registry, Singapore has 3,574 ships, Liberia has 3,277 ships, Marshall Islands has 3,244 ships and Hong Kong has 2,594 ships.
Open registries are criticized, especially by trade union organizations based in the developed world, especially from Europe. One criticism is that ship owners who want to hide their ownership may choose a flag-of-comfort jurisdiction that allows them to be legally anonymous. Several ships with convenience flags have been found to be involved in crime, offering substandard working conditions, and negatively impacting the environment, mainly through illegal, unreported and unregulated fishing. The shipowner may choose jurisdiction with a measurement rule that reduces the size of a certified GRT from a vessel, thereby reducing the cost of the docks of the next call dock. Such was the consideration when Carnival Cruise Line changed the flag of RMS Empress of Canada in 1972 to Panama. In 2011, the Cunard Cruise line listed all of its ships in Bermuda, which, in addition to other considerations, enabled the captain of his ship to marry a spouse at sea, maritime marriages portrayed as a lucrative market.
In 2009, thirteen flag countries have been found by international shipping organizations to have substandard rules. On the other hand, maritime industry practitioners and seafarers from other countries argue that this is a natural product of globalization. Exercise supporters, however, demonstrate economic and regulatory advantages, and increased freedom in selecting employees from an international labor pool. Shipowners from developed countries use this practice to compete in a global environment. As of 2009, ships of thirteen convenience flags have been targeted for special enforcement by countries when they visit ports in those countries, called port state controls.
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International law requires that each merchant ship is registered in a country. The country in which the ship is registered is the flag state, and the flag state gives the ship the right to fly its civilian flag. A ship operates under a flag state law, and this law is used if the ship is involved in an admiralty case. A flag state regulatory ship exercises control over vessels and is required to regularly inspect, certify ship and crew equipment, and issue security and pollution prevention documents. The actual organization registering the ship is known as the registry. The registry may be a government or private institution.
The reasons for selecting an open list varied and included tax evasion, the ability to evade labor regulations and the national environment, and the ability to hire crews from low wage countries. A national or closed registry usually requires that ships are owned and built by national interests, and at least partially controlled by their citizens. Instead, open registries often offer on-line registration with some of the questions asked. The use of convenience flags lowers registration and maintenance costs, which in turn reduces overall transportation costs. Accumulated profits can be significant, for example in 1999, 28 fleets of US companies from 63 foreign-flagged ships, saving companies up to US $ 3.5 million per ship annually.
The environmental disaster caused by the sinking of the MVA vessel Amoco Cadiz , which flew the Liberian flag, spurred the creation of a new type of maritime enforcement. Due to strong political and public criticism of the sinking of Amoco Cadiz, fourteen European countries signed the 1982 Paris Memorandum of Understanding on the Control of the Port State or the Paris MOU. Under the control of the port state, ships in international trade are subjected to scrutiny by the countries they visit. In addition to living conditions and ship work, this inspection includes items related to marine life safety and pollution prevention by ships. In cases where the inspection of the port status reveals a problem with the ship, the port state may take action including holding the vessel. By 2015, the member states of the Paris MOU conducted 17,858 inspections with deficiencies, resulting in 595 vessels held and 11 banned. The member states of the Tokyo Memorandum of Understanding conducted 17,269 ship inspections by 2015, noting a shortfall of 83,606 which resulted in 1,153 detentions.
The principle that there is a genuine relationship between the shipowner and their flag state dates back to 1958, when Article 5 (1) of the Geneva Convention on the High Seas also requires that "the state should effectively exercise its jurisdiction and control in the administrative, technical and social issues of the ship which raises its flag. "The principle is repeated in Section 91 of the 1982 treaty, the so-called UN Convention on the Law of the Sea and often called UNCLOS. In 1986, the United Nations Conference on Trade and Development sought to establish the original link concept in the United Nations Convention on Ship Registration. The Convention for Ship Registration shall require that the flag state be associated with its vessels either by owning an economic share in the ownership of its vessels or by providing seafarers to the crew. To come into effect, the 1986 agreement requires 40 signatories whose combined tonnage exceeds 25% of the world's total. By 2017, only 14 countries have signed the agreement.
Maps Flag of convenience
History
Trade ships have used false flags as tactics to avoid enemy warships since ancient times, and examples can be found from the Roman era to the Middle Ages. After the American Revolutionary War, traders flying the newly emerging US flag quickly found that they offered little protection against attacks by Barbary pirates - many who responded by attempting to transfer their registry back to the UK. The use of false flags was often used by the British during the Napoleonic and US Wars during the War of 1812. During the mid-19th century, slave ships flew various flags to avoid being searched by the British anti-slavery fleet. However, the modern practice of registering ships in foreign countries for economic gain originated in the United States during the World War I era, and the term "convenience flag" began to be used in the 1950s.
Between 1915 and 1922, several laws were passed in the United States to strengthen the United States Merchantal and provide protection for its seafarers. During this period, US-flagged ships were subjected to regular inspections by the US Shipping Bureau. This is also the time of the Robert LaFollette's Act of 1915, which has been described as " Magna Carta the rights of seafarers." The Seamen's Act is governed by the hours of the cardiologist, their payment, and establishes the basic requirements for the food of the ship. It also reduces punishment for disobedience and eliminates the practice of jailing sailors for desertion abuses. Another aspect of Seamen's Act is the enforcement of safety standards, with the requirements on lifeboats, the number of seafarers qualified on board, and that officers and seafarers can speak the same language. This law placed the US-flagged vessels at economic losses to countries that did not have such protection, and the vessels began to be re-enlisted in Panama's open registration from 1919. In addition to overriding the Seafarers Act, Panama-flagged vessels in this early period paid sailors. on the Japanese wage scale, which is much lower than that of western merchants.
The Belen Quezada, in August 1919, was the first foreign ship to be re-registered in the Panama registry, and was employed in running illegal alcohols between Canada and the United States during the Prohibition.
The Liberian Open Registry, founded in 1948, was the brainchild of Edward Stettinius, who had been Secretary of State Franklin D. Roosevelt during World War II. Stettinius created a corporate structure that included The Liberia Corporation, a joint venture with the Liberian government. The corporation was structured so that a quarter of its income would be given to the Liberian government, another 10% to fund social programs in Liberia, and the rest being returned to the Stettinius company. The Liberia registry was created during Panama registration became less attractive due to several reasons including its unpopularity with the US labor movement and European shipping concerns, political unrest in Panama, and rising costs and regulations.
On March 11, 1949, Greek shipping king Stavros Niarchos registered the first ship under the banner of Liberia, World Peace . When Stettinius died in 1949, the ownership of the registry was forwarded to the International Bank of Washington, headed by General George Olmsted. In 18 years, Liberia grew beyond the UK as the largest register in the world.
Because of the Liberia civil war of 1989 and 1999, the recordings eventually became second to the flags of comfort in Panama, but maritime funds continued to supply 70% of total government revenues. After the civil war of 1990, Liberia joined the Marshall Islands Republic to develop a new maritime and corporate program. The resulting company, International Registries, was formed as a holding company, and in 1993 was bought by its management. After taking over the Liberian government, Americo-Liberian warlord Charles Taylor signed a new enrollment contract with the Liberian International Ship and Corporate Registry, commonly known as LISCR. LISCR is one of several sources of legal income for the Taylor regime. The Liberian Registry is operated from Virginia, USA.
In 2009, open registries Panama, Liberia, and the Marshall Islands accounted for nearly 40% of the entire world fleet, in terms of deadweight tonnage. In the same year, the top ten comfort flags accounted for 55% of the world's deadweight tonnage, including 61% bulk carriers and 56% oil tankers.
To ward off class hopping , in 2009 IACS established the Transfer of Class Agreement (TOCA).
Extensive use
The International Transportation Workers Federation (ITF) has a list of 32 registrants who are considered to be flags of convenience (FOC) registrars. In developing the list, the ITF considers the "capability and willingness of flag states to enforce the minimum international social standards on their ships," "the level of ratification and enforcement of the ILO Conventions and Recommendations," and "safety and environmental records." In 2010, the list includes Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Bolivia, Burma, Cambodia, Cayman Islands, Comoros, Cyprus, Equatorial Guinea, Georgia, Gibraltar, Honduras, Jamaica, Lebanon, Liberia, Malta, Marshall Islands , Mauritius, Mongolia, Netherlands Antilles, North Korea, Panama, Sao Tome and PrÃÆ'ncipe, St. Vincent, Sri Lanka, Tonga, Vanuatu and International Ship Registers France and Germany.
In 2009, Panama, Liberia and the Marshall Islands were the world's three largest in terms of deadweight tonnage (DWT). The three organizations listed 11,636 vessels 1,000 DWT and above, totaling 468,405,000 DWT: more than 39% of the ship's carrying capacity in the world. Panama dominates the scene with more than 8,065 vessels accounting for almost 23% of the world's DWT. Of the three, the Marshall Islands (with 1,265 registered vessels) had the largest DWT increase in 2009, increasing its tonnage by nearly 15%.
The Bahamian Flag is ranked sixth worldwide, behind the Hong Kong and Greek registrars, but is similar in size to the Marshall comfort flag, with about 200 more vessels but a carrying capacity of about 6,000,000 DWT lower. Malta, ninth in the world, has about 100 more ships than the Bahamas, with a capacity of 50,666,000 DWT, representing 4% of the world's fleet with 12% growth that year.
In eleventh position, Cyprus registered 1,016 vessels in 2009, 2.6% of the world's tonnage. The remaining 11 comfort flags are Antigua and Barbuda (# 20), Bermuda (# 22), Saint Vincent and the Grenadines (# 26), and French International Ship Register (FIS) at # 27. Bermuda and FIS have less than 200 vessels respectively, but they are large: the average Bermudan ship is 67,310 DWT and the average FIS ship is 42,524 DWT. (As a reference, the average capacity of ships in the US and UK listed respectively is 1,851 DWT and 9,515 DWT.) Applicants from Antigua and Barbuda and Saint Vincent and the Grenadines both have more than 1,000 vessels with an average capacity of 10,423. each DWT and 7,334 DWT.
21 other convenience flags listed on the ITF each have less than 1% of the world's DWT. In 2008, more than half of the world's merchant ships (measured by tonnage) were listed under the banner of convenience.
Criticism
There are a number of common threads found in criticism of the convenience system flag. One is that these flag countries have inadequate regulations and that their rules are not well enforced. Another is that, in many cases, the flag state can not identify the ship owner, let alone hold the owner in civil or criminal liability for the actions of the ship. As a result of the lack of state control of the flag, the convenience flag is criticized on the basis of enabling tax evasion, providing the environment for criminal activity, supporting terrorism, providing poor working conditions for seafarers, and having adverse effects on the environment.
David Cockroft, former ITF secretary-general said:
Smuggling weapons, the ability to hide large sums of money, trade in goods and people and other illegal activities may also develop in unregulated shelter provided by the flag of the comfort system.
Panama has the largest maritime list, followed by Liberia. The landlocked Bolivia also has a great record, just like Mongolia. Also, some registers are based in other countries. For example, the Panama consulate manages the documentation and collects registration fees, the Liberian registration is administered by a company in Virginia, Cambodia managed from South Korea and the Bahamas from the City of London.
Hidden ownership
The owner of the ship's legal and financial benefits is responsible for the vessel and its activities. For a number of reasons, some are justified and some are suspicious, boat owners who want to hide their ownership may use a number of strategies to achieve that goal.
In the jurisdiction that permits it, the actual owner may form a seashell company to become the rightful owner of their vessel, making it difficult, if not impossible, to track who is the beneficial owner of the vessel. The 2004 report of the UN Secretary-General's Consultative Group on the Implementation of the Flag States reported that "It is very easy, and relatively cheap, to form complex corporate networks to provide highly effective protection against the identity of beneficiaries who do not want to be known."
According to a 2003 report by the Organization for Economic Cooperation and Development (OECD) report entitled "Ownership and Control of Vessels", the structure of these companies is often multi-layered, dispersed in various jurisdictions, and makes the owners of "almost impenetrable" benefits for law enforcement and taxation. The report concludes that "regardless of the reason why anonymity robes are available, if provided it will also help those who may want to remain hidden because they are engaged in illegal or criminal activities, including terrorists." The OECD report concludes that the use of a carrier stock is "probably the most important (and perhaps most-used) mechanism" to protect the anonymity of the ship's beneficial owner. Physically owning shares of ownership ownership of corporation ownership. There is no requirement to report the transfer of the carrier stock, and not every jurisdiction requires that their serial number be even recorded.
Two similar techniques to provide anonymity for the ship's beneficiaries are "nominee shareholders" and "nominee directors." In some jurisdictions requiring the identity of shareholders to be reported, a loophole may exist where the beneficial owner may appoint a candidate to become a shareholder, and the candidate can not be legally forced to disclose the identity of the beneficial owner. All companies are required to have at least one director, but many jurisdictions allow this to be nominated director. The name of the prospective director will appear in all company documents in place of the beneficial owner, and like nominee shareholders, some jurisdictions may force the director of the candidate to divulge the identity of the beneficial owner. The further obstacle is that some jurisdictions allow the company to be called a director.
Crime
The flagship of a comfort ship has long been associated with crime on the high seas. For example, in 1982, Honduras closed its open registration operation for allowing "illegal traffic of all kinds and has given Honduras a bad name."
Ships registered by the Cambodian Shipping Company (CSC) were found smuggling of drugs and cigarettes in Europe, violating the Iraqi oil embargo, and engaging in human trafficking and prostitution in Europe and Asia. In response to this activity, in 2000, Ahamd Yahya from the Ministry of Public Works and Transport of Cambodia told the Fairplay industry publication "We do not know or care who owns the ship or whether they are doing 'white business' or' black '... that's none of our business. "Less than two years later, French troops seized a Greek-flagged Greek Vender The winner for cocaine smuggling. Shortly after the seizure, Cambodian Prime Minister Hun Sen closed the registration to a foreign ship, and Cambodia canceled his contract with CSC shortly thereafter.
North Korea's comfort flag also got a significant spotlight. In 2003, North Korean freighter Pong Su was transformed into Tuvalu on the way shortly before being caught by Australian authorities for smuggling heroin into the country. That year, thirteen countries began monitoring vessels under the North Korean flag for "dark cargo like drugs, missiles or nuclear fuel."
Terrorism
In 2002 in the United States, Democratic Senator John Breaux of Louisiana proposed a bill to prevent US shipowners from using foreign flags, as if they were counter-terrorism measures.
Working conditions
In the material accompanying the ILO's International Labor Conventions of 2006, the International Labor Organization estimates that at that time there were approximately 1,200,000 seafarers working throughout the world. The document goes on to say that while working on flagged ships to countries that do not "exercise effective jurisdiction and control" on their ships that "seafarers often have to work under unacceptable conditions, to the detriment of their health, health and safety and the security of the ship where they work. "
The International Transport Workers Federation goes further, stating that the "convenience flag" provides a means to circumvent labor legislation in the state of ownership, and becomes a vehicle for paying low wages and forcing long working hours and unsafe working conditions because the FOC ship does not have "They also say that these ships have low safety standards and no construction requirements, that they" do not enforce safety standards, minimum social standards or trade union rights for seafarers ", that they often fail to pay their crew, have poor safety records, and engage in practices such as leaving a crew at a distant harbor.
Environmental effects
While the flag of a leisure vessel has been implicated with some of the highest profile oil spills in history (such as Malcolm's flagged Malta Erika , flagged Bahamian flag Prestige , Horizon Deepwater Marshallese, and SS Torrey Canyon-flagged Liberia, MVÃ, Amoco Cadiz and MVÃ, Sea Empress ) are the most common environmental critic. they face illegal fishing. These convenience system flag critics argue that many of the FOC flag states lack the resources or the will to monitor and control the ships properly. The Environmental Justice Foundation (EJF) is of the opinion that illegal, unreported and unregulated vessels (IUU) use the convenience flags to avoid regulation and fishery control. Comfort flags help reduce operating costs associated with illegal fishing methods, and help illegal operators avoid prosecution and hide profitable ownership. Consequently, the convenience flag perpetuates IUU fishing which has extensive environmental, social and economic impacts, especially in developing countries. The EJF campaigned to end the flag of convenience to the fishing vessel as an effective step to combat IUU fishing.
According to Franz Fischler, EU Fisheries Commissioner,
The practice of the convenience flag, in which the owners register ships in countries other than their own to avoid binding rules or controls, is a serious threat to today's maritime world.
Ratification of maritime convention
International regulations for the maritime industry are formally announced by United Nations agencies, in particular the International Maritime Organization and the International Labor Organization. Flag States adopted this rule for their vessels by ratifying individual agreements. One common criticism of the state of convenience is that they allow shipowners to avoid this rule by not ratifying important agreements or by not forcing them.
The International Chamber of Shipping (ICS) publishes an annual report entitled "The Performance Indicators of the Shipping Shipping Industry which identifies six" core "conventions representing the minimum level of maritime regulations, from the point of view of shipowners, as SOLAS, MARPOL, LL 66, STCW, MLC, and CLC/FUND92. Of these, all 34 flag-comfort states listed by the ITF have ratified the STCW Convention, on training standards, certification and surveillance for seafarers, and 25 of them have now ratified all six. However, the nine registered countries have not ratified all five remaining conventions. To put this in context, 64 flag nations have not ratified all six conventions, including China and the United States.
The Sea Life Safety Convention (SOLAS) and Load Line (LL 66) focuses on ship safety issues. Originally developed in response to the sinking of the RMS Titanic , SOLAS established regulations on lifeboats, emergency equipment and safety procedures, including continuous radio watches. It has been updated to include rules on ship construction, fire protection systems, life saving equipment, radio communications, navigation safety, management for safe vessel operations, and other safety and security issues. By 2015, the flags of Bolivia, Lebanon and Sri Lanka have not ratified the SOLAS agreement. LL 66 sets the standard for minimum buoyancy, hull pressure, and vessel equipment, and establishes a navigation zone where extra precautions should be taken. By 2015, the governments of Bolivia, Georgia and Sri Lanka have not ratified LL 66.
The Maritime Workers Convention of the International Labor Organization, 2006 provides the workplace seamless and comprehensive rights to seafarers, including the requirements for minimum age, qualifications, hours of work and rest, medical care, complaint procedures, wage payments, and onboard life arrangements. MLC replaces a number of previous ILO Conventions including ILO147. In 2015, the governments of Bolivia, Cambodia, North Korea, Georgia, Honduras, Lebanon, Mongolia and Sri Lanka have not ratified the MLC.
MARPOL and CLC/FUND92 are associated with pollution. The International Convention for the Prevention of Pollution from the Ship, 1973 (MARPOL), as amended by the Protocol of 1978, includes Annex I-VI "regulating pollution by ships, including oil and air pollution, waste of vessels and waste.In 2015, the Bahamas, Cambodia, North, Georgia, Honduras, Lebanon and Sri Lanka have not fully ratified MARPOL Civil Liability for Oil Pollution (CLC) and International Funds for Oil Pollution Damage Compensation (FUND92) together provide mechanisms to ensure compensation for oil spill victims By 2015 , the governments of Bolivia, North Korea, Honduras, Lebanon and Mongolia have not ratified the CLC and FUND92 conventions.
Port status control
In 1978, a number of European countries agreed in The Hague to audit working conditions aboard the International Labor Organization's vessel vis-a-vis. For this purpose, in 1982 the Paris Memorandum of Understanding on the Control of the Port State (Paris MOU) was established, establishing port state control standards for what is now twenty-six European and Canadian states.
Several other regional Memorandums of Understanding have been established based on the Paris model, including the "Memorandum of Understanding on Port State Control in the Asia-Pacific Region", commonly referred to as the "Tokyo MOU", and organizations for the Black Sea, Caribbean, Indian Ocean, Mediterranean and Latin America. The organizations of Tokyo and Paris produce, based on deficiencies and detention, black, white, and gray lists of flag states. The US Coast Guard, which handles state control inspections in the US, maintains a list of similar targets for flagging flag countries. By 2014, fourteen of the thirty-four ITF-listed convenience flags are targeted for special enforcement by the Paris states and Tokyo MOUs or US Coast Guard: Antigua and Barbuda, Belize, Bolivia, Cambodia, Cayman Islands, Comoros, Cyprus, Honduras , North Korea, Malta, Moldova, Mongolia, Panama, Saint Vincent and the Grenadines, and Vanuatu.
Wages
The United Nations Conference on Trade and Development, in the 2009 Maritime Trade Report, states that shipowners often register their vessels under a foreign flag to employ "seafarers from developing countries for lower wages." The Philippines and China supply most of the maritime workforce in general, and the major flags of convenience in particular. In 2009, the flag countries employing most Filipino expatriate sailors were Panama, Bahamas, Liberia, and the Marshall Islands. That year, more than 150,000 Filipino sailors were employed by these four flags of comfort. In a 2006 study by the United States Maritime Administration (MARAD), seafarers from the People's Republic of China comprised more than 40% of the surveyed crew who flew the Panama flag, and about 10% of those flying the flag of Liberia. The MARAD report calls China and the Philippines the source of "cheap" crew.
The shipping industry is often divided into two working groups: licensed sailors including deck officers and marine engineers, and seafarers who are not required to have licenses, such as capable seafarers and chefs, but must be certified. The latter group are collectively known as unlicensed sailors or rank. Wage differences can be seen in both groups, between "high cost" resources such as the United States, and "cheap" sources such as China and the Philippines. However, the salary on the flag of the comfort vessel is still much higher than the average salary of non-seafarers in these countries, in addition to income tax exemption from some seafarers, especially those from the Philippines.
For unlicensed sailors, the 2009 statistics of the Bureau of Labor Statistics of America provide average earnings for the capable and usual sailors of US $ 35,810, varying from $ 21,640 (at 10th percentile) to $ 55,360 (in the 10th percentile) 90). This can be compared to the 2006 statistics of the International Labor Organization, providing an average annual income for Philippine and Chinese sailors capable of around $ 2,000 to $ 3,000 per year (PHP9,900 per month and CNY3,071 per year). Among the licensed sailors, American chief engineers earned a median of $ 63,630, varying from $ 35,030 to $ 109,310 while their Filipino counterparts averaged $ 5,500 per year (PHP21.342 per month).
See also
- Declaration that recognizes the Right to Flag of Country which does not have a Sea Coast
- Tax haven
Footnote
References
News stories
Fishing reference
Organization State Control Port
Further reading
External links
- A database of reported incidents of abandoned seafarers
- Cyprus Leisure Flag: Prestige Oil Spill
- List of State Flag comments on detention for 2000, 2001 and 2002
- Cardiente, Christian; Barlaan, Karl Allan (2011-09-10). "Ocean of problems". Archived from the original in 2013-09-02. Ã,
Source of the article : Wikipedia
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