Market in Sea Transport
An EU regulation provides for freedom to supply services, competition and free access to the market in sea transport. A separate directive deals with the freedom to provide services in sea transport between states. EU nationals and non-EU companies registered in the EU and controlled by EU nationals have the right to carry passengers and goods by sea between any port in the EU and third country ports. National restrictions reserving rights to home registered ships must be phased out.
An EU regulation grants freedom to provide maritime transport services within a state for EU ship owners and EU registered ships owned by EU nationals. The ships must comply with the conditions for carrying out cabotage within that state.
Matters of manning are the responsibility of the state of registration or the state in which the cabotage service is performed. Depending on the nature of the particular service, states may make the right to provide transport services subject to public service obligations in the interest of maintaining adequate cabotage services between mainland and islands and between islands.
Regulation of Transport Services
EU regulations provide for the common EU rules on maritime transport organisation to facilitate the provision of transport services between member states. Regulations give nationals of EU states and non-EU shipping entities using EU registered ships and controlled by EU nationals the right to undertake passenger and goods carriage between any port in the EU and any port or offshore installation in another EU state or in a third country.
Rules which restrict such services to nationals or national registered ships were to be phased out in the 1980s. Similarly, bilateral agreements with third countries were to be adjusted or phased out.
Arrangements for cargo sharing in future bilateral agreements with third states are limited to those cases states whose shipping companies would not otherwise have an opportunity to trade to and from the third state.
The regulation provides a procedure for cases where EU shippers have no effective opportunity to trade to and from particular third-party states.
Further regulation, part of the same measures, provides rules for the application of competition rules to the maritime transport sector. It does not apply to so-called tramp vessel services, which is the transport of goods without a regular timetable where freights are freely negotiated in accordance with the demand. The rules apply between EU ports.
Agreements with the sole objective of achieving technical improvements or co-operations are exempt, exempt subject to conditions. The exemptions do not apply in so far as they seek to
- coordinate timetables,
- determine the frequency of sailings,
- allocate sailing between members of a group of carriers who provide an international liner service between specified geographical limits
- agree to charge uniform or common freight rates and
- apply other agreed terms for the provision of liner services.
A further regulation in 2003 provides for competition law to be enforced by the Commission, and also on national competition authorities.
A further part of the same measures allows the EU to provide compensatory duties to protect owners of ships within the EU from unfair pricing on the part of non-EU shippers. It provides for a system of complaints, consultation, and investigation. Ultimately compensatory duties may be imposed on foreign ship owners if it is shown that the unfair pricing has caused injury and the intervention is necessary in the interests of the EU.
The last regulation in this package provides for where action by a third state or its agents restricts free access to the transport of liner cargoes, boat cargoes or other cargoes by EU shippers or ships registered in the EU. Coordinated action may be taken following a request by a state to the Commission. This may include diplomatic representations and countermeasures in relation to the shipping companies concerned.
State Obligations as Registrars
An EU Directive provides a framework to ensure states fulfil their obligations as flag states or place of registration more effectively and consistently. It seeks to prevent maritime pollution and improve maritime safety.
Before permitting a ship to be registered and authorised to fly its flag, states must ensure the ship complies with international rules and regulations. It must check safety records. The previous flag state must be consulted if necessary if the ship has outstanding deficiencies or safety issues.
The Directive is designed to ensure that states comply with their obligations as ship registrars. A state may not authorise a ship under its until it has verified that the ship complies with relevant rules and regulations. In particular, it must comply with safety requirements. The previous state or registration should be consulted if there are any outstanding deficiencies or if safety issues.
If a ship has been detained by a port, the administration of the state registration is to oversee that the ship is brought into compliance with the IMO Convention.
States must ensure that the following information is available at all times.
- particulars of the ship including name, IMO numbers.
- date of surveys, supplementary surveys, and
- identification of organisations involved in certification and classification,
- the outcome of port ship inspections, information on deficiencies and detention and marine casualties.
- date of due registration.
States must ensure that their administrations are subject to audit by the IMO at least every seven years. The result of the audit are to be published subject to national legislation and confidentiality. This provision is to apply until a mandatory IMO scheme might replace it.
By 2012 states were to implement a quality management system for the operation of flag state administration and related activities. States which appeared on a blacklist or gray list for two successive years must submit a report to the Commission on the performance together with details of reasons for status.
Transfer between Flag
EU regulation allows for the transfer of passenger and cargo ships between EU registers. It applies to ships constructed after 1998 in the case of passenger ships and after May 1980 in the case of cargo ships, the date is 1st July 1998.
The regulations do not apply to
- war or troop ships
- ships used only for governmental non-commercial purposes,
- ships not propelled by a mechanical means,
- ships of wooden or primitive build,
- pleasure yachts not engaged in trade or fishing,
- cargo ships less than 300 — 500 gross tonnage.
States may not refuse a transfer of registration for technical reasons where the ship complies with the requirements and carries valid certification under EU Directives.
The state from which the transfer is taking place is to give the requisite information to the recipient state. This is to include the file history, list of improvements required by the outgoing registrar, details of the survey due etc. Upon transfer a new certificate is issued under the same conditions as those formerly issued.
Where there is a refusal to transfer, the Commission must be notified. Registration may be suspended where the transfer may not take place due to security, safety or danger to the environmental issues.
EU Directive provides for insurance of shipowners in respect of maritime claims. It applies to ships of 300 gross tonnage or more. More ships and certain state-owned or operated ships for non-commercial public services are excluded.
States must require that ships registered in their country must be insured. Ships not registered in the country must be insured when they enter ports within the states’ jurisdiction. States may require that ships in transit through their territorial waters fulfil the obligations.
Insurance coverage is subject to limits pursuant to international conventions. Liability limitation is only permitted in accordance with the Conventions. States must ensure that ships anchored in ports under their jurisdiction have a certificate of insurance.
States may expel a ship where it does not have the requisite insurance. Notification must be made to other states. Once notified, that state is prohibited from entering any port within the European Union.
The insurance certificate must contain details of the ship, registration number, port of registry, owner’s name, place of business, duration and insurer details. It must be translated into English, French or Spanish. There are penalties for failure of compliance.
McMahon Legal, Legal Guide Limited and Paul McMahon have no liability arising from reliance on anything contained in this article nor on this website.