International News Archives - Page 6 of 8 - Malta Maritime Law Association

Malta’s Ship Register Largest in Europe

March 15, 2012 Leave a Comment

Times of Malta, Thursday, March 15, 2012 , by Geraldine Baldacchino

Malta is the seventh largest ship register in the world and increased its tonnage by 16 per cent last year. At the beginning of this year, Transport Minister Austin Gatt announced that, for the first time in its maritime history, Malta has become the largest ship register in Europe. Being the seventh largest in the world, Malta has increased its tonnage by 16 per cent last year over 2010. It seems that in Malta we have found the right ingredients for the maritime industry and for a successful ship register.

Apart from the fact that the Maltese islands are at the heart of the Mediterranean sea, a strategic location which makes Malta a popular destination for maritime activities, this success is also attributable to the high level of service offered by Transport Malta with its 24 hours, seven days a week service in respect of urgent matters, and also due to fiscal and legal benefits.

With the amalgamation of all these positive factors, the Malta ship register gained a very good reputation on an international basis and for years the ship register has been on the white list. Every new application is processed by the Malta register once all the specific details within it are thoroughly confirmed and after the officers are satisfied that the application is in compliance with all international standards and regulations.

The main concern of the Malta ship register is the condition and the age of the applicant vessel and not all applicant vessels make it into the register. Besides being a highly regulated register, Malta is also a member of a number of international maritime conventions including INMARSAT, TONNAGE 1969, LL 66/88, CLC and FUND 92, STCW 78, MARPOL 73/78, SOLAS, various International Labour Organisation conventions, and adheres to all European legislation issued from time to time.

Registration is open to vessels owned by Maltese and non-Maltese persons and in practice any kind of vessel may be registered, including a vessel under construction. Registration of a vessel under the Malta flag may be effected by any Maltese or other European Union citizen , any company registered in Malta or in the EU, or a non-EU body corporate or entity which is capable of ensuring due observance of the laws of Malta relating to registration. Where the person under whose name a vessel is registered is not resident in Malta, he is required to appoint a Maltese resident agent. A resident agent is a person who is a habitual resident of Malta and who acts as a communication channel between Transport Malta and other local competent authorities and the vessel owner and managers.

Maltese legislation also provides for bareboat charter registration. In such a case the Maltese register and Maltese law provide the opportunity of having the certificate of registry issued in the name of the vessel’s charterer. Maltese law provides both for bareboat charter registration of foreign ships under the Malta Flag as also for the bareboat charter registration of Maltese ships under a foreign flag.

The main principles adopted at law are the compatibility of the two registries and that matters regarding title over the ship, mortgages and encumbrances are governed by the underlying registry, while the operation of the vessel falls under the jurisdiction of the bareboat charter registry.

Within these parameters, ships bareboat charters registered in Malta enjoy the same rights and privileges, and have the same obligations as any other ship registered in Malta. The Malta ship register is complemented by legislative provisions which make the register a preferred register with financiers as it is quite easy in Malta to enforce rights of mortgagees.

A mortgagee wishing to enforce its rights against a mortgaged ship with the assistance of the Maltese courts can file an application for the vessel to be sold in one of two manners: a judicial sale by auction or a court approved sale. With regards to judicial sales, normally they do not take more than six weeks from the date of the vessel’s arrest to the date of sale. Upon an application being filed, the court appoints an auctioneer and sets the date for the judicial auction. A judicial sale by auction ensures that the vessel is sold on a free and unencumbered basis.

On the other hand, in a court approved sale, any creditor with an executive title can file an application requesting the court to approve the private sale of a vessel in favour of an identified buyer and in consideration of a determined price. The mortgagee must, together with the relevant application, file two separate valuations prepared by two independent and reputable valuers, confirming the value of the vessel.

Moreover, the mortgagee must also show the court that the private sale is in the interest of all the creditors and that the price offered by the buyer is reasonable in the circumstances. The law provides for expeditious proceedings, mandating that the application be appointed for hearing within ten days of its filing.

If the court approves the private sale, it will nominate a person who will be entitled to transfer the vessel in accordance with terms and conditions approved by the court, as if such person were the registered owner of the vessel. The nominated person must deposit the relevant price in court within seven days from the date of the sale. A court approved sale grants the purchaser title to the vessel which is free and unencumbered.

It seems that in Malta we have found the right ingredients for the maritime industry and for a successful ship register.

Dr Baldacchino is an associate with Fenech Farrugia Fiott Legal.

Malta Flag now Europe’s top shipping register and endorsed as a Low Risk Flag

January 28, 2012 Leave a Comment

Source: Hellenic shipping worldwide news article, Saturday, 28 January 2012

The Maltese Shipping Register was confirmed as the largest merchant flag in Europe and seventh worldwide by Clarkson Research Services, one of the leading providers of statistical services in the maritime sector. Minister for Infrastructure, Transport and Communications, Dr Austin Gatt announced this during a press conference held at Transport Malta offices on Friday.

As at end of 2011, the Maltese Register of Shipping had achieved an increase of over 6 million gross tonnage representing a growth rate of 16.1% over the previous year. The registered gross tonnage under the Merchant Shipping Act is 45.6 million. These figures include a whole diversity of vessels including yachts and superyachts. Minister Gatt said “we are very proud of the strong performance of the Maltese Shipping register.

The latest published statistics represent record figures for the Malta Flag and a significant achievement for the Malta Flag Administration over the past decade. This increase is mainly attributed to the continued effort of Transport Malta and the Maltese shipping community, including local intermediaries, to attract reputable companies to the Maltese Register. We must continue working to consolidate this position in the years to come.”

Particular positive results were registered in the registration of superyachts. The three consecutive year trend was reconfirmed with an increase of 18.6% in the registration of superyachts over 2011. As of the end of December the superyachts, larger than 24 metres in length, flying the recognizable Maltese cross worldwide was almost 300. Minister Gatt also announced that Malta was recently confirmed by the Paris Memorandum of Understanding on Port State Control (Paris MoU) on the list of “low risk ships” under the New Inspection Regime, after the successful completion of an IMO (International Maritime Organisation) Audit last year.

This new low risk status will translate into real benefits to Maltese registered ships and superyachts particularly when calling at ports within the Paris MOU region. It will denote significantly less targeting for port State control inspections, thus less impact on operations. Minister Gatt continued “this status was achieved thanks to the efforts of all stakeholders and the efforts of the personnel of the Merchant Shipping Directorate within Transport Malta. Such achievement is testimony to their level of commitment since the Administration has managed to concurrently increase the growth rate while meeting the stringent low risk criteria”.

In his concluding remarks, Minister Gatt also made reference to last week’s announcement that the Malta Aviation register had another successful year. Dr Gatt concluded: ““these results encourage us to work harder to ensure Malta continues to benefit from the associated positioning within these international sectors, from the direct revenue and the indirect added value they bring to our economy.’’

Source: Superyacht Times

Focus on Malta: Fairplay

January 26, 2012 Leave a Comment

Despite the EU debt crisis, the Euro currency has been Malta’s salvation, says Islands’ businesses, writes Paul Gunton of Fairplay [published in Fairplay, 26 January, 2012].

Read the full article in pdf.

Malta becomes biggest ship registry in Europe

January 23, 2012 Leave a Comment

For the first time in its maritime history, Malta has been confirmed as the country with the largest ship register in Europe. Following a 16 per cent increase in tonnage, the island surpassed Greece By the end of the year, 5,830 vessels – a total of 45.6 million tonnes – were registered under the Maltese flag, Transport Minister Austin Gatt has said: “Following a 16 per cent increase in tonnage, the island surpassed Greece for the first time. Although it’s the smallest European country, Malta has the seventh largest ship register in the world,” he said.

Dr Gatt said that during 2011, the Maltese shipping register generated over €12 million in revenue for Transport Malta alone. This significant achievement was mainly attributed to the register’s high-service quality which attracted reputable companies, Dr Gatt added. Applicants had to pass through a rigorous selection process and not every owner who expressed interest in joining the register was accepted. The condition and the age of prospective members are a major factor in the determination of whether they would make it to the register.

Malta’s register listed various types of vessels, including cruise liners like the Royal Caribbean, and super yachts, which registered an increase of 18.6 per cent over the previous year.

[Source: Times of Malta]

A focus on the Bacino

January 9, 2012 Leave a Comment

Appeared in Times of Malta, 9 January 19, 2012. By Alison Vassallo

Every once in a while a judgment is handed down by the European Court of Justice which, by reason of the ripples it causes in a particular sector of the industry it touches upon, comes to be referred to simply by one word – one such case is that which has come to be referred to as the “Bacino”.

The Bacino has attracted significant criticism directed from all angles of the yachting community. The full name of the case is “Etat du Grand-Duche de Luxembourg, Administration de l’enregistrement et des demains v. Pierre Feltgen, Bacino Charter Company SA (C- 116/10)”, December 22, 2010 and consisted of a reference for a preliminary ruling made by the Luxembourg Cour de Cassation to the ECJ concerning the interpretation of Article 15(5) of the Sixth Council Directive 77/338.

The article of law which formed the object of this referral provided that: “Member States shall exempt.. 4. The supply of goods for the fuelling and provisioning of vessels: a) used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities; b) used for rescue or assistance at sea, or for inshore fishing, with the exception, for the latter, of ship’s provisions; 5. The supply, modification, repair, maintenance, chartering and hiring of the seagoing vessels referred to in paragraph 4(a) and (b) and the supply, hiring, repair and maintenance of equipment – including fishing equipment – incorporated or used therein”.

Bacino Chartering Company SA (“Bacino”) made available on a regular basis a vessel which it owned, together with a crew, to natural persons for the purpose of leisure activities on the high seas. Bacino did not charge the charterers VAT on the hire and therefore did not pass any VAT payments calculated on such hire to the Luxembourg tax authorities.

The Luxembourg tax authorities were however of a different view and they notified Bacino of the tax assessments for the financial years 1998 and 1999 which set out the amounts of VAT owed by the company for charters carried out during such period.

Bacino challenged that assessment before the District Court of Luxembourg which dismissed its action, subsequent to which Bacino was successful in arguing before the Court of Appeal that since the vessel was engaged in navigation on the high seas and carrying passengers for reward, the said activity did in fact fall within the parameters of the exemption outlined above.

In assessing whether VAT is due on a particular service, the ECJ adjusted the collective focus of the industry to the use being made of the yacht by the person availing himself of the particular service. Therefore in case where service consists of making a yacht available for charter and the lessee is a private person using the yacht for leisure purposes the Court held that VAT is due by him to the owner on the hire.

By analogy, in case where the person ordering the supply of fuel, provisions or commissioning the refit of a yacht is the owner of the yacht who is using the yacht for commercial activities on the high seas, then no VAT is due on the said services by the owner to the particular supplier or service provider.

While the question put to the ECJ related solely to whether VAT is due on the hire paid by a private person to the owner of a yacht where the owner is in the business of operating the yacht for commercial purposes on the high seas, the findings of this judgment may be said cover other services besides hire, namely those of supply, modification, repairs and maintenance.

Perhaps much of the alarm that has trickled down throughout the industry arises as a result of reading more into the judgment than there is. The ECJ in this case has not come up with new law. The court, when faced with the facts of the Bacino Case, was merely provided with a perfect opportunity of stating in black and white what the real spirit and meaning of the cited exemption is – placed simply being that where the lessee of a yacht uses the yacht for private (leisure) purposes, then the lessee is required to pay VAT on the service to the owner who in turn uses the yacht for commercial activities on the high seas.

The Bacino has attracted significant criticism directed from all angles of the international yachting community. The main concern for owners is whether they can retain competitive charter rates and whether the prevailing economic climate can support a proportionate hike in rates. It very much remains to be seen whether all of this will in fact translate into a tangible threat to the attractiveness of chartering a yacht, or whether this is effectively a storm in a teacup.

Dr Vassallo is a senior associate within the Yachting Department and the Marine Litigation Department at Fenech and Fenech Advocates.

Member of the Comité Maritime International

Malta’s Ship Register Largest in Europe

Malta Flag now Europe’s top shipping register and endorsed as a Low Risk Flag

Focus on Malta: Fairplay

Malta becomes biggest ship registry in Europe

A focus on the Bacino

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