Maritime economy looks to open ship registry to boost fortunes

A nine-member committee set up by the Ghana Maritime Authority (GMA) to look into the feasibility of the country adopting an open ship registry system has submitted its report with major recommendations on how the nation’s maritime economy can boost its fortunes with the system.

The report which was received by the Director-General of the Ghana Maritime Authority, Thomas Alonsi was done in three months and investigated the pros and cons of the open ship registry and how the nation can execute it to achieve better economic gains and also use it as an avenue to attract a lot more youth into the sector.

The open ship registry system is where a country allows ships to be registered and fly the country’s flag without the real owner having any definite connection with the country. Another name for it is ‘Flag of Convenience’

Currently, the country operates a closed ship registry where it registers only ships owned by Ghanaians or persons with close connection with the country. The GMA believes that the current system offers little economic advantage to the country reason there is a move to switch.

Amongst others, the committee examined the existing registry system and evaluated its strengths and weaknesses. It also appraised the legal framework of the existing ship registry, the global ship registry system including the types of flags and the readiness of the nation to assume flag state responsibility under an open registry system and proffered some recommendations.

Handing over event

Speaking at a short event held at the office of the GMA to hand over the report, Mr. Alonsi was grateful to the committee for executing their mandate in the shortest possible time and said the recommendations given would be scrutinized and considered in good faith.

“It is my belief that the committee has carried out extensive deliberation on the subject matter and we, therefore, wish to thank the chair and its members for the report and the committee would take the needed steps as submitted in the report to the benefit of the nations. We are grateful for the effort and we are most appreciative. We will look at it, review and implement your recommendation,” Mr. Alonsi said.

Committee remarks

The Chairman of the committee, Dr. Kofi Mbiah in his remark said that the two main benefits the report speaks on are financial and employment opportunities connected to an open registry system. He mentioned that, in the immediate, the committee is recommending that the nations focus on the financial gains of the system and gradually dovetail into training and employment opportunities for citizens.

“With employment issues, the nation has to be flexible to be able to attract ship owners onto the register. Shipowners would want to take their crew from anywhere in the world therefore you cannot restrict them when you ask them to come and take your flag but there is a way around this.”

Open Vs closed registry

Benefits to shipowners of using an open register are, for the most part, economic in nature and derive from: low or no vessel restrictions; favorable tax environment; low administration and registration fees; no or easy to meet nationality requirements; quick and efficient registration process; flexible manning requirements; lower operational costs of the vessel amongst others.

Meanwhile, closed registries have a two-fold requirement, firstly, incorporation in the country of registration and secondly, principal place of business in-country of registration. In a closed registry, the tax is charged on the earnings as compared to open, wherein the taxes are based on tonnage.

Benefits of ship registration

Without being registered with any of the above-mentioned registers, a ship cannot trade commercially. Apart from this commercial benefit or requirement, different ship owners register their ships with different registers for preferential treatments on tax (tonnage tax), certification and security.