Malta Flag Archives

A way forward for Malta’s maritime industry – William Vella

November 21, 2022 Leave a Comment

The government’s mission is to further support the yachting industry in Malta

The maritime industry has historically been a long-standing pillar of the Maltese economy. Admittedly, it became more so once Malta joined the EU. The challenge remains in keeping abreast of regulatory and legislative developments while remaining competitive with other jurisdictions.

The exponential growth experienced by the Malta flag over the last 32 years is a feather in the cap of successive government administrations that have always recognised the importance of this economic activity, which generates over €24 million annually. This does not include the total amount generated by private stakeholders involved directly and indirectly in ship registration services, which amounts to circa €200.27 million. The new Merchant Shipping Act came into force on April 6, 1973. Early 1977 saw further changes to the legal and administrative side of shipping. The collective effort of the various stakeholders in the sector, including Transport Malta, has put Malta on the map as the leading jurisdiction in shipping and yachting, with the biggest register in Europe and a leading register globally.

Along the years, there have been amendments to the original legislation to render it more receptive to operational adjustments and circumstances, including the payment of fees; provisional registration; priority of mortgages; ranking of credits; and bareboat charter registration among others. Such resilience has encouraged and supported the recent impressive expansion in the superyacht registration context.

Notwithstanding these achievements, this success should not serve as an alienation from the necessity to continuously review and adjust to ensure that the level of service being provided by both the private sector and the authorities is maintained and improved.

Earlier this year, the Ministry for Transport, Infrastructure and Capital Projects, headed by Minister Aaron Farrugia, launched the idea of a first National Policy for Superyachts during the Malta Superyacht Symposium jointly organised by the Malta Chamber and the Malta Maritime Law Association. The policy is expected to be released in the coming months. A steering committee, comprising prominent industry experts, among which the Malta Chamber and the MMLA, has been set up to evaluate several proposals by key industry players to identify how this industry can be further developed. These same key industry players, together with the steering committee, tackled several areas within the yachting sector. The policy is expected to be released in the coming months

The prime focus was that of achieving a more robust and clearer regulatory framework. Another area that was discussed was how to better equip and maintain the current infrastructure and cost structure. Additionally, the matter of how government departments and the private sector can work in tandem in an efficient manner was explored.

Government support was another topic of discussion and was considered at length. The discussion evolved on how the government can be of support to its agencies and authorities and to the private sector. Ultimately, green investment was also on the agenda of the steering committee where several proposals taking in consideration the environmental aspect in yachting were put forward and discussed.

It was made clear that the government’s mission is to further support the yachting industry in Malta and to consolidate Malta’s position as a leading yachting jurisdiction and as an international centre of maritime excellence in the Mediterranean. This will eventually lead to the contribution and creation of quality jobs in Malta. The need for such a policy is key for achieving and retaining excellence in the making is the outcome of consistent determination over the years, together with the outstanding quality and competence emanating from both the public and private sectors.

However, given the cutthroat competition, there’s no resting on one’s laurels. The National Yachting Policy is the way forward for Malta to achieve its objectives and remain the relevant go-to jurisdiction.

William Vella is a legal and compliance manager at Dixcart Management Malta Ltd and a member of the Malta Chamber of Commerce, the European Maritime Law Organisation and Malta Maritime Law Association.

Source: Times of Malta

The maritime industry within a modern world

February 8, 2022 Leave a Comment

Although viewed as one of the most fundamental aspects of the Maltese economy, the ‘maritime’ industry is both poorly categorised and often underutilised. Grouped together informally as a collection of trades rooted in their proximity and dependence to the sea, the maritime industry is nonetheless one of the best performers in the modern economy of the Maltese islands and continues to be a sector with vast opportunities despite an already exponential growth.

The foundation of the maritime industry in Malta is steadfast and supported by a reliable statistical growth observed over the past years. At heart, the maritime industry is one which is historical to the Maltese; the island nation has provided an invaluable strategic naval base to many empires throughout the centuries, even more attractive still as a merchant hub for trade between the levant and the rest of Europe[1]. This naval tradition has largely endured, evidenced by the modern prosperity of the Maltese maritime economy.

The Maltese maritime industry, without the effect of any economic multipliers, makes up roughly 15% of the Maltese GDP, with an output growth-rate of 13.9% alongside a total output of €2,303.67 million according to an extensive April 2020 research paper. ‘Value added’ is another aspect where the maritime industry shines, year-by-year beating out the rest of the economy with a 12% growth rate and €853 million in value added. Lastly, the maritime industry offered roughly 12,000 jobs of full-time-equivalent, making up 5% of the total employment in the economy. When including indirect and induced effects (economywide impacts of the maritime industry) as multipliers to the current figures, one can expect results almost double in relation to value added and employment: €2,163 million and 20,000 jobs respectively[2].

The shipping industry has experienced widespread expansion on a global scale. However, some segments experience growth more rapidly than others. While warehousing, which includes storage and bunkering services, remains the largest field in an employment and value-added sense, there is a definite trend towards the ‘maritime services’ sector.

The ‘maritime legal and management services’ sector, for one, has seen continual growth in the Maltese islands and has gradually outpaced more traditional sectors by twofold in terms of growth rate. Although partially a result of a general global rise in demand for shipping infrastructure, the strength of the Malta flag and the Maltese corporate structures greatly accentuates this trend as law firms are often at the charge of the process. The Maltese flag is, likewise, one of proven confidence and lessened bureaucratic restrictions, attractive in great part due to its status as an EU nation with relative ease in vessel and vessel mortgage registration procedures[2]. This is best showcased by raw statistics; the Maltese flag is the largest in the EU and 6th largest worldwide, with a total gross tonnage registered of 84.27 million as at December 2020[3]. Hand-in-hand with this is the Maltese corporate structure, with similar benefits in regard to EU member status and ease of both investment and incorporation of companies bundled together with strong fiscal incentives. As continual
growth permeates the shipping industry, there is little doubt that both strong corporate infrastructure and staunch legal support will be essential in the modern maritime economy.

A clear sign of most country’s economic prospects is the direction of its capital: investment from both the private and the public sector. Numerous projects have occurred on the islands, ranging from relatively small investments in infrastructure surrounding the deep-water quay and breakwater ports in Valletta and Marsaxlokk, to the €50 Million shore-side electrical supply in the Grand Harbour, greatly reducing the environmental impact of cruise-liners visiting Valletta, important for the environmentally-conscious modern world. This is equally accented by the monumental €303.4 million invested in the Malta Freeport terminal since privatisation in 2004. Most of the capital has since been developed into equipment such as several modern quay cranes and rails as well as infrastructural land development, progressively increasing its area and influence.

Even though the ‘maritime’ aspect of the Maltese economy is already recognised and capitalised upon, there is some opinion that the potential of the maritime sector is yet to be fully realised. Logistics, at one angle, is an excellent opportunity for the Maltese islands. The centralised location in the Mediterranean provides Malta the ability to provide competitive value and supply chain services[4]. This is only increased by the technology-focus of the Maltese islands in the recent years in combination with the thriving commercial sector. This reputation presents the possibility of future developments in research and innovation in the maritime sector, one of many exciting future avenues even including diverse fields such as LNG bunkering and petro-chemical transhipment, areas where global investment has already shown interest.

The business, legal and maritime environment of the Maltese islands is comprehensive, yet oftentimes it lacks the government structure to truly take advantage of all the mentioned opportunities. In line with this prospect, the reformation of Transport Malta as announced by Minister for Transport, Infrastructure and Capital Projects Ian Borg on the 14th of October 2021 outlines a plan to separate Transport Malta into three authorities: land, aviation and maritime. This news brings promise to the industry[5].

Further to this, the restructuring is viewed by some as essential to growth in the maritime industry, thoroughly examined in a 2020 research paper entitled ‘Realising the Potential of the Maritime Sector towards the Growth and Development of the Maltese Economy’[2]. With such fundamental differences present in both the past and future concepts of ‘transport,’ how can a single entity be expected to handle the distinctions of every sector equally? The separation of Transport Malta between maritime, land and aviation authorities will inevitably allow more precise focus on each sector, which, for the purposes of this article, presents an interesting opportunity for a creation of a better national framework surrounding the maritime industry and the use of its resources.

In summary, the Maltese maritime economy is one where great success is already present and equally visible. The future of the sector, however, is less certain. While particular concessions, such as the Transport Malta reformation, have been introduced in an attempt to organise the industry, the necessity to band together still stands, in order to continue building upon the maritime economy to unlock its full potential.

[1] ‘Malta – Country Commercial Guide’, December 2021 (International Trade Administration)
[2] ‘Realising the Potential of the Maritime Sector towards the Growth and Development of the Maltese Economy’, April 2020 (Dr. Gordon Cordina, Ms. Maria Cini, Ms. Victoria Apap – E-Cubed Consultants)
[3] ‘Transport Malta Annual Report 2020’, May 2021 (Transport Malta)
[4] ‘Making Malta a Centre of Maritime Excellence’, 2020 (Integrated Maritime Policy)
[5] ‘The setting up of independent authorities for the transport sectors has been announced’ – Press release by the Ministry for Transport, Infrastructure and Capital Projects, October 2021 (Department of Information, Malta)

by Mark Anthony Kuflewicz, Ganado Advocates

Source: Lexology

Malta introduces new Passenger Yacht Code

November 15, 2021 Leave a Comment

In response to the needs and realities of the yachting industry and heeding the advice of numerous stakeholders in the business, the Merchant Shipping Directorate has introduced the Passenger Yacht Code (PYC). This code, which entered into force on 25 May 2021, lays out a pragmatic approach to an increased demand for larger yacht operators that wish to carry more than 12 passengers, while simultaneously ensuring that the highest safety standards, which are more suited to these kinds of vessels, are applied and maintained.

Applicability
The scope of the PYC’s applicability is passenger yachts that:
• carry more than 12 and up to 36 passengers, and no more than 200 persons overall (the master, crew or other persons employed on board are excluded from the definition of “passenger”);
• do not carry cargo; and
• are engaged on international voyages.
The PYC exclusively caters for the yachting sector and clearly lists the scenarios that fall outside scope. Pleasure yachts not employed for commercial use are excluded from its scope; however, private and pleasure yachts that carry at least 13 guests are encouraged to voluntarily comply, as far as is practicable, with the standards laid out therein.

Purpose
The PYC was developed with an awareness of the challenges involved in applying certain international convention standards that were originally intended for merchant vessels, to modern passenger yachts or superyachts. Prior to its introduction, yachts carrying more than 12 passengers, and that fell outside of the Malta Commercial Yacht Code’s scope (which caters for yachts engaged in commercial operations that do not carry more than 12 passengers), had to satisfy similar requirements to those applicable to passenger ships. These requirements were often regarded as being too disproportionate and onerous when considering a passenger yacht’s design and general operations. The PYC also aims to better safeguard the protection of life and property at sea, and it strives to continue to promote the prevention of marine pollution from yachts.

Key provisions and acceptable equivalences
The PYC is divided into a number of sections, each containing provisions that address aspects of a passenger yacht’s technical specifics and overall operations, including parts on:

• construction and stability;
• machinery and equipment;
• safety of navigation;
• fire protection, detection and extinction; and
• manning and crew certification.

The PYC outlines several dedicated equivalences to international convention requirements, including those emanating from provisions in the International Load Line Convention, as amended in relation to plimsol markings, sill or coaming heights and glazing. There are also numerous equivalences to requirements in the International Convention for the Safety of Life at Sea (SOLAS), as amended – requirements which, in view of the passenger yachts’ technical specifics, design, size, and operational pattern, may be considered impracticable.

In parallel, and without compromising overall safety or weakening standards, the PYC provides for requirements enhanced beyond several of the SOLAS provisions, as well as additional equipment and requirements that are deemed appropriate and more suitable for these kinds of vessels. For instance, the PYC provides for enhanced safety and survivability requirements in lieu of the carriage of lifeboats, subject to conditions laid out in therein.

As far as the Merchant Shipping (Maritime Labour Convention) Rules 2013 (MLC) are concerned, the PYC dedicates a section to certain acceptable equivalences relating to crew accommodation, stores and recreational facilities that passenger yachts of less than 1,250 gross tonnes may opt to comply with in lieu of the provisions laid out in part IV of the MLC, “Accommodation and Stores”. The PYC also lays down additional requirements in a separate section for personnel protection.

The PYC includes a section on marine pollution prevention and it reiterates the requirements that all PYC compliant vessels are to meet under:
• the International Convention for the Prevention of Pollution from Ships (MARPOL), as amended;
• the International Antifouling System Convention; and
• the Ballast Water Management Convention.

In this regard, passenger yachts will be surveyed and certified in line with the relevant international conventions, and they must carry the relative MARPOL manuals, plans and records (as applicable) on board.

The applicable requirements for surveys, audits and certifications are also covered. Passenger yachts will be classed by a recognised organisation and surveyed, certified, audited and issued with the class and statutory certificates applicable to passenger vessels. Additionally, the recognised organisation will issue a certificate confirming compliance with the PYC.

Another notable addition in the PYC is the set of guidelines for the static chartering of passenger yachts, whereby a passenger yacht that is berthed or anchored at sea is allowed to carry more than 36 passengers. An application must be filed with the Merchant Shipping Directorate – Yachting Section and, if successful, the passenger yacht is issued with a statement from Transport Malta that allows static charters to be held on board. Local port authorities must be kept informed when such a static charter is planned, and the conditions laid out in the guidelines must be upheld. As a growing market trend, this is a welcome addition for passenger yachts flying the Malta flag.

Comment
With the PYC, the Merchant Shipping Directorate has taken a significant step in attracting more yachting tonnage to its fleet and to maintain its status as a quality flag of confidence that is respectful of the demands of this fast-evolving industry. The Merchant Shipping Directorate is committed to the growth of this sector, as has also been seen more recently with the introduction of the Commercial Yacht – Pleasure Yacht Changeover Guidelines on 2 September 2021. These guidelines aim to assist all stakeholders by clarifying the salient features and procedural aspects of the changeover in yacht status from pleasure to commercial and vice-versa under the Malta flag – an option often availed by Malta-flagged yacht owners.

by Stephanie Farrugia, Fenech & Fenech

Source: Lexology

Changes to the Existing Tonnage Regulations

November 12, 2021 Leave a Comment

In recent months, the Tonnage Regulations (Subsidiary Legislation 234.19) underwent minor developments through the Tonnage (Amendment) Regulations (Legal Notice 165 of 2021), which primarily introduced new definitions for ‘Hull Length’ and ‘Length Overall’ (‘LOA’). This has significantly altered the way in which vessels and yachts are measured for the purpose of obtaining the applicable Tonnage Certificate. Supplementing the new amendments, Transport Malta also published comprehensive guidelines on the measurement of different types of yachts and vessels.

The LOA is still defined as the length from the foreside of the foremost fixed permanent structure to the after side of the aftermost fixed permanent structure. However, the exclusion of functional arrangements from the definition of fixed permanent structures is now not an absolute rule. Hull Length of a ship is now defined in accordance with the ‘harmonised standard’ under EU law. The relevant harmonised standards are currently established in EU Regulation 2017/1130 for fishing vessels and in ISO 8666 for other vessels.

Corresponding elements within the Tonnage Certificates were also modified. This includes the required information within a Certificate of Survey (Tonnage Measurement) for Maltese Ships under 24 Metres Length, other than Fishing Vessels with overall length equal or greater than 15m. As of the 1^st of September 2021, one needs to include information on the type of ship in addition to its means of propulsion, the ship’s hull length, its Hull Identification Number or Craft Identification Number, the ship’s model and serial numbers as well as particulars of the propelling engine irrespective of it being fitted inboard or outboard. One other important change in respect of certification is that a fishing vessel of 15 metres length is not categorized within the same certification criteria as ships under 24 metres in length anymore, but will now require the same Tonnage Certificate as fishing vessels of more than 15 metres but under 24 metres length.

The amended regime will not apply retroactively to Malta flagged vessels and yachts already in possession of such Certificates before the amendments’ entry into force. Nonetheless, remeasurement in terms of the new measurement rules is required where a vessel or yacht undergoes modifications changing its dimension or type.

Merchant Shipping Notice 174 may be found here.

by GVZH Advocates

Source: Lexology

Commercial Yacht – Pleasure Yacht Changeover Guidelines – 2 September 2021

September 6, 2021 Leave a Comment

On the 2nd of September 2021 the Merchant Shipping Directorate of Transport Malta issued the “Commercial Yacht – Pleasure Yacht Changeover Guidelines” (the Guidelines). The Guidelines serve both to lay down certain important considerations with respect to the change of registration of a Malta flag yacht from pleasure to a commercial (and vice versa) and to set out the procedural steps to be followed when yacht owners intend to carry out this change.

While the change in status of Malta flagged yachts has to date been readily accepted and processed by the Malta Ship Registry, the Guidelines now provide clear guidance on the steps to be followed in achieving the changes, in line with the Malta Commercial Yacht Code. The Guidelines clarify that the Merchant Shipping Directorate at Transport Malta imposes no limits on the number of changes made to the registration status of a Malta flagged yacht. The Guidelines further confirm that there is no limit on the duration of the change of registration, thereby offering yacht owners a considerable degree of flexibility with respect to changing their yacht’s registration.

Whilst this degree of flexibility is offered to the yacht owners, the Guidelines recommend that the same survey and certification regime as required for commercial yachts is retained when changing from a commercial to a pleasure registration. This is intended to facilitate a change back to commercial status. Additionally, the Guidelines specify that an undertaking to be signed by the owner or the manager of the yacht attesting that they will return the current certificate of registry of the yacht is to be filed immediately together with the request to change registration of the yacht.

The Guidelines set out that in the event of multiple changeovers during a single year the fees due to Transport Malta for a change from a pleasure to a commercial registration of the yacht shall be paid only once during the said year and not with each changeover.

The Guidelines are a welcome development since they provide yacht owners, managers and representatives clarity on the salient considerations for yacht registration changeovers and the procedural aspects linked to changeovers under the Maltese flag.

The Guidelines including the procedural steps for the changeover process may be found here.

by Matthew Cassar, Fenech & Fenech Advocates

Source: Lexology

Member of the Comité Maritime International

A way forward for Malta’s maritime industry – William Vella

The maritime industry within a modern world

Malta introduces new Passenger Yacht Code

Changes to the Existing Tonnage Regulations

Commercial Yacht – Pleasure Yacht Changeover Guidelines – 2 September 2021

Contact Us

Join Us

International Events