Why does Registry matter?
Michael Clark
mention where a ship is registered? What is the big deal about Liberia?
Thanks, Mike Clark (Posting a reply is fine.)
Terry Steinford
: ..and this cruise line is?...
Windjammer Barefoot Cruises
: Why doesn't the United States change whatever aspects of registering a
: ship in the U.S. which makes doing so unattractive? The huge amount of
: ships which are registered in Panama, Liberia, etc.... suggest that perhaps
: the U.S. has not won on this one.
What's to win? Like consumer electronics and several other industries
this one is international and highly competitive.
The reasons for a predominance of registries such as Liberia, Panama and
have little or nothing to do with safety. The cruise industry operating
from the U.S. is extremely competetive. Everybody pays about the same for
their vessels, food and fuel. Port charges are the same for everybody.
Wages for European officers are close to U.S. wages, and in some cases
higher. The main variables are hotel staff labor and corporate taxes.
The traditional European seafaring countries have seen the same kind of
shift away from their flags, for the same reasons.
Countries such as Panama and Liberia don't have corporate taxes. The
shipowner pays fees for the registry which pays for the flag
administration expenses plus whatever additional revenue the government is
looking to reap. If the flag tries to reap too much, the shipowner will
look elsewhere.
I doubt a U.S flag operator, paying U.S. level wages for the hotel and
unlicensed crew, could compete on the same routes with a foreign
operator. Changing U.S law to allow hiring of foreigners at below
U.S. wages would never pass politically.
The solution in the past to level the playing field was to pour billions
of dollars into a subsidy program. Those subsidies paid the shipowner the
difference between U.S. wages and foreign wages, so freight rates and
fares could be competive.
The subsidy program of the 1930's envisioned a massive, lengthy war that
required transport in direct support of the war plus transport of raw
materials to support industry. Additional ships were needed to replace
battle losses. That kind of war is highly unlikely in the future.
The U.S long ago abandoned any attempt to preserve oceangoing passenger
vessels through subsidies. Subsidies for cargo ships are about to expire.
The national defense arguments that made sense for those subsidies decades
ago are no longer valid today. The military is meeting their seaborne
transport needs through active military, auxiliary and a small reserve
fleet.
--
Terry Steinford
t...@gate.net
melder
>detailed, it doesn't address "What is the big deal about Liberia?"
>Actually, it is about the same big deal as Panama was or the Bahamas, or
>a few other commonly used registry countries...it has to do with the
>financial and tax end of the cruise business. Just as it is often
>advantageous for companies to use bank accounts in Switzerland or Grand
>Cayman for some dealings, so is it advantageous for cruise lines to use
>one of the countries with more lenient tax laws.
>
>Or at least this was what I was told a number of years ago when I asked
>the question on board a Liberian-registered ship.
>
Before 1983, Safety was often of secondary importance in several flags of
convenience. All nations have now endorsed SOLAS 1973, the most recent
convention and therefore, in theory, follow the international safety requirements.
Notable execptions are Honduras and St. Vincent. Whilst they have signed SOLAS,
their surveyors are very "flexible" when it comes to the rules. Therefore, these
flags are the last refuge of much substandard tonnage.
The other flags of convenience such as Panama, Liberia, Bahamas, and Cyprus
are convenient for the owners as discussed already. The corporate/individual tax
structures are helpful. There are also questions of manning requirements, but
this is an esoteric area.
Mike
Terry Steinford
: I am curious as to why the ads I see on TV/magazines/travel agencies all
Listing the flag of registry in cruise ship advertisments is a
result of the U.S. government's efforts to impose stricter fire
safety requirments on ships in the 1960's. Between 1964 and 1966
there were a series of major passenger ship fires, many of which
were the result of pre-WWII designs that allowed massive
quantities of combustible materials to be used throughout a
ship. U.S. efforts to require stricter international safety
standards retroactively on existing ships were rebuffed by other
nations, so the U.S Congress imposed the retroactive
requirements unilaterally for vessels of any nation that
embarked passengers in the U.S.
The international standards were eventually raised and the
retroactive provisions were put into force by most countries.
In an effort to raise awareness about the new fire requirements
for vessels that operated elsewhere in the world, but solicited
business in the U.S., the Coast Guard issued regulations that
required all advertisments to include a notice if the vessel
does not meet the new fire safety requirements and if the
vessel's flag nation is not a signatory to the Safety of Life
at Sea Convention (SOLAS). If the vessel meets the new standards
and is a signatory, only the flag of registry is required to be
mentioned in the ad. If the ship does not meet the new
standards, a specific paragraph long statement has to be
included in the ad explaining the particulars of non-compliance.
The notice is required only if the ad or other promotional
material includes the name of the ship or the destination.
I am only aware of one cruise line regularly advertising in the
U.S. that has vessels that do not meet the new international
fire safety standards. Their ships do not make any U.S. port
calls, since the U.S. Coast Guard imposes the same standards on
all ships embarking passengers in the U.S. That cruise line's
print ads omit any mention of the names of the ships or the
ports of call. If you call their 800 number for a brochure, look
carefully at an inconspicuous corner of it you will see the
notice admitting that their ships do not meet the current
international fire safety standards.
If the vessel is embarking passengers in the U.S., the flag is probably
not a big concern in regard to safety standards, since all of them have to
play by the same rules. Panamanian flagged vessels had a problem for
other reasons in the latter half of 1989 when the U.S. announced that
starting in January 1990, all Panamanian flagged vessels would be
prohibited from entering U.S. ports. By December nearly every cruise ship
operator had reflagged to something other than Panama. The restriction
was cancelled before it went into effect after we invaded Panama and
arrested Noriega.
--
Terry Steinford
t...@gate.net
GOOCH, DANIEL
>
>I am only aware of one cruise line regularly advertising in the
>U.S. that has vessels that do not meet the new international
>fire safety standards. Their ships do not make any U.S. port
>calls, since the U.S. Coast Guard imposes the same standards on
>all ships embarking passengers in the U.S. That cruise line's
>print ads omit any mention of the names of the ships or the
>ports of call. If you call their 800 number for a brochure, look
>carefully at an inconspicuous corner of it you will see the
>notice admitting that their ships do not meet the current
>international fire safety standards.
..and this cruise line is?...
>
>If the vessel is embarking passengers in the U.S., the flag is probably
>not a big concern in regard to safety standards, since all of them have to
>play by the same rules. Panamanian flagged vessels had a problem for
>other reasons in the latter half of 1989 when the U.S. announced that
>starting in January 1990, all Panamanian flagged vessels would be
>prohibited from entering U.S. ports. By December nearly every cruise ship
>operator had reflagged to something other than Panama. The restriction
>was cancelled before it went into effect after we invaded Panama and
>arrested Noriega.
>
Why doesn't the United States change whatever aspects of registering a
Didi Pancake
While Terry's (I /think/ it was Terry) answer is fascinating and
detailed, it doesn't address "What is the big deal about Liberia?"
Actually, it is about the same big deal as Panama was or the Bahamas, or
a few other commonly used registry countries...it has to do with the
financial and tax end of the cruise business. Just as it is often
advantageous for companies to use bank accounts in Switzerland or Grand
Cayman for some dealings, so is it advantageous for cruise lines to use
one of the countries with more lenient tax laws.
Or at least this was what I was told a number of years ago when I asked
the question on board a Liberian-registered ship.
Didi
--
Didi Pancake | "Dock-a-loodle-fod!"
e...@virginia.edu | Now that the memory problem was solved,
---------------------------| there was only the dyslexia to worry about.
Usual disclaimers apply. | --Terry Pratchett in _Reaper Man_
John Coan
affect what particular law would apply to crew and passengers while
aboard, in international waters. For example, there were rumors some
time back of passengers getting sexually assaulted on ship. If the
ship's security managed to catch and charge the perpetrator, and the
ship was registered in Liberia, would the trial be held in Monrovia?
Would Liberian rules of evidence apply? Etc. Etc.
Terry Steinford
: How does the flag of registry
: aboard, in international waters. For example, there were rumors some
: time back of passengers getting sexually assaulted on ship. If the
: ship's security managed to catch and charge the perpetrator, and the
: ship was registered in Liberia, would the trial be held in Monrovia?
: Would Liberian rules of evidence apply?
The basic rule is that each government is responsible for investigating
and prosecuting crimes that occur onboard ships under their flag while the
ship is in that country's waters or on the high seas.
Many countries will take steps to protect their citizens who are the
victims of certain crimes, like terrorism, anywhere in the world.
--
Terry Steinford
t...@gate.net
melder
>
>What I want to know, for sure, is this. How does the flag of registry
>affect what particular law would apply to crew and passengers while
>aboard, in international waters.
Technically, a ship is a part of the country in which she is registered. Liberian law
applies on a Liberian ship, Panamanian law on a Panama ship, etc. For more
information , I suggest you search for details of a case against Carnival Cruises last
last year. I am sorry, but I do not know the Citation or other details.
Mike