The Malta Maritime Law Association recently met the Minister of Justice, Jonathan Attard in order to discuss a number of proposed changes to the provisions of the Malta Code of Organisation and Civil Procedure regulating shipping matters in Malta.
Original Certificates Onboard Malta flagged Vessels: Some Practical Issues
When ship owners and managers register vessels under the Malta flag, one of the questions which frequently arises is: how will the original flag certificates reach the vessel in time for it to sail immediately upon her delivery and registration with originals onboard? Of course, this issue arises due to the physical impossibility of having original flag certificates, which are issued in Malta by the flag administration, reach the vessel at her delivery port on the very same day she is registered under the flag. This has been resolved by the Malta Ship Registry (the “Registry”) in a very practical manner.
An operational certificate may only be released to a vessel once change of flag surveys and audit verifications are successfully completed and all statutory certificates including the Safety Management Certificate (SMC), International Ship Security Certificate (ISSC) and Maritime Labour Certificate (MLC) are made available by the appointed Classification Society (“Class”). Consequently, in the case of new buildings, the Registry couriers out undated flag certificates, in advance of delivery date, to the attending Class auditor responsible for the release of the Vessel’s SMC, ISSC and MLC. The latter will hold the certificates in escrow until the day of delivery. Once delivery of the vessel takes place and the vessel is registered under the Malta flag, the attending Class surveyor/auditor receives instructions directly from the Registry to date the vessel certificates, upon confirmation that the SMC, iSSC and MLC have been released. The dated vessel certificates are then released by the attending surveyor/auditor to the owner’s representatives or the master of the vessel who can safely sail out and commence the vessel’s operations.
While several ports allow vessels to sail with copies of certificates until originals arrive on board, experience has shown us that a few port authorities around the world still insist on sighting original certificates onboard. This becomes an issue in the cases of a transfer of ownership, a change in management, a change of class or a change in name in relation to which class surveys must be carried out and statutory certificates including SMC, ISSC and MLC released before new vessel certificates may be issued to the vessel. In such cases, the Registry may make arrangements, as in the case of new builds, for undated vessel certificates to be sent in advance of the transaction date, to the attending surveyor who will then date and release the certificates upon receipt of instructions from the Registry.
In other cases, also where no changes as mentioned above are involved however vessel certificates do not arrive in time for a vessel to sail out of a port which requires original certificates, it is also possible for the Registry to scan copies of certificates directly to the Harbour Master of the port where the vessel is lying or alternatively to a nearby Maltese embassy or consulate, following which the copies may be certified as true copies – these are delivered by agents to the vessel which will enable the vessel to sail out of port.
A similar problem may arise at the time of deletion of vessels from the Malta flag. As is the case with most registries, the deletion certificate usually takes a few weeks to be released since original trading vessel certificates must first be returned to the Registry prior to release of the deletion certificate. While this is generally not an issue, in some cases, a confirmation of deletion is required by the incoming registry on the same day to allow re-registration. In such case, the Registry may send a confirmation of deletion directly to the incoming registry confirming that the Malta Registry of the vessel has been closed free from encumbrances. This confirmation however is not to be regarded as an equivalent to a deletion certificate.
Occasionally, a deletion certificate is nonetheless required on the same day as the deletion. As vessels usually continue to operate until the last day and consequently retain original certificates on board until deletion, this creates a practical problem since original certificates must be returned and submitted to the Registry prior to the release of the deletion certificate. In such case, it is possible for the original vessel certificates to be delivered to a Maltese Embassy or Consulate which will then confirm receipt to the Registry. The filing of such original documents is regarded by the Registry as being tantamount to delivery of the original certificates at its own Registry. In fact on such occasions the Registry proceeds with the release of the deletion certificate. The Embassy or Consulate retains the certificates and sends the originals directly to the Registry.
The Registry has always proved to be flexible and responsive to practical issues which arise and the above are just a few examples which demonstrate the sensitivity of the flag administration to the day to day needs of the shipowner all of which have contributed to the popularity of the Malta flag.
by Lara Saguna, Fenech & Fenech Advocates
Source: Lexology
Final Draft Convention on the International Effects of Judicial Sale of Ships agreed at UNCITRAL
Dr Ann Fenech, President of the MMLA, and CMI co-ordinator for the project at UNCITRAL, just returned from New York where she attended the 40th session of UNCITRAL Working Group V1. The meeting was held in a hybrid fashion between 7 – 11 February. Dr Fenech is pleased to report that the Working Group has completed its work by agreeing a final Draft of the Convention on the International Effects of Judicial Sale of Ships.
Working Group V1 has been considering and deliberating this draft convention presented to UNICTRAL in the form of the Beijing Draft since May 2018, starting off with the Malta Colloquium organised jointly by the MMLA and CMI. The Draft will now be presented to the Commission for its deliberation and approval in June and if approved the Convention will be presented to the General Assembly of the UN which will be followed by a signing ceremony of the Convention which could be held in Beijing in the first quarter of 2023.
The maritime industry within a modern world
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
MMLA AGM 2021
The MMLA recently held the AGM 2021. The meeting took place in a hybrid form with most of the Executive Committee members present in person and other members joining virtually. President Dr Ann Fenech opened the meeting with an update on the latest developments regarding the Beijing Draft Convention on the Effects of Judicial Sale of Ships. This was followed by a presentation by Dr Jotham Scerri Diacono on the workings of the subcommittee revising the MSA while Dr Adrian Attard explained the workings of the same subcommittee with regard to the Revision of the COCP.
After the President’s Report, the Reports of the active Subcommittees and the Treasurer’s Report and approval of the Budget 2022 the new Executive Committee was elected. The present officers were re-elected confirming President Dr Ann Fenech, Vice Presidents Dr Suzanne Shaw and Dr Matthew Attard, Secretary Dr Stephan Piazza and Treasurer Dr Nicholas Valenzia. Also re-elected were Dr Katrina Abela, Dr Lisa Camilleri, Dr Chris Cini, Dr Anthony Galea, Dr Anndrea Moran, Dr Robert Radmilli and Dr Jotham Scerri Diacono as members while Dr Alison Vassallo decided to step down in view that her new commitments in the yachting sector would take up her time. We thank her for her invaluable contribution over the years and welcome Dr Adrian Attard who was elected as a new member to the MMLA Executive Committee.
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