Many people do not know that there are registrations for ships and vessels just as there are for vehicles. Ships and vessels are documented in a process that is referred to as a ship registration. Each ship is given nationality to a country that it is documented in which allows it travel internationally with that nationality as a proof of ownership of that vessel. International law requires each one to be registered to a country, which is referred to as its flag state. This name resembles the flag that is flown on the ship.
The reason each ship needs to have a nationality is because it needs to have a country where it is held accountable for inspections. Laws are different from country to country, so it needs to have one place it accounts to in order to limit confusion. There are different requirements that must be met that deal with safety and pollution prevention. Each ship or vessel is submitted to the organization known as its registry. They are usually governmental or private agencies.
Registries are different from each other, depending on the country. Some are only open to ships and vessels of its own nation. These are referred to as traditional or a national registry. Open registries are registries that are open to foreign-owned ships and can be referred to as flags of convenience.
Plenty of areas are open to dual citizenship, like the Panama ship registry. The benefits to doing something like this is that dual registration is that you are free to go back and forth between the different countries, but there is a different way to have your registration paperwork and requirements met. If a ship owner has no vessel under the open registry, for whatever reason, there are major advantages for them under the dual registry system. Ship owners from Europe are a great example of this because there are a lot of high costs that are associated with their registries and just operation in general. With a dual registry, or open registry, the costs are significantly lower for them.
How is it decided if you are able to be a part of the open or dual registry system? It is no longer a reciprocal decision where if one country allows it, the other will too. Instead, it is up to the home country and whether or not they will allow the vessel owner to register with another country who does allow it. Because of the many technicalities that can be overlooked or even not fully understood, many people will often consult a lawyer or a group of lawyers that specialize in this area. That helps to ensure that all the laws are met and there are no unintentional mistakes.
Safety certificates are very important to ever registry. When it comes to registering with another country as well, there are fewer costs than one might think. Countries like Panama do not require any kind of vessel re-surveying as long as they can show that they possess a valid safety certificate from their home country. This saves a lot of money and expense for the owners because ships don’t have to spend any time dry docked prior to registration.
