The lagal issues of ship registration in vietnam in comparision with the requirement of international law

The new contribution to Science of the thesis: The thesis analyse clearly the concepts o f ships, nationality o f ships, registration Ị of ships basing on the regulations o f internation

HANOI LAW UNIVERSITY LUND UNIVERSITY

FACULTY OF LAW

THE LẴGAL ỈSSUES OF SHIP REGISTRATION lisr

VỈETNAM IN COMPARISON WITH THE REQUIREMENT OF INTERNATIONAL LAW

SPECIALTY: INTERNATIONAL AND COMPARATIVE LAW

The ỉa g a l issu es o f sh ip registratitìn in Vietnam in com parison m th the requirem ent <)f in teriia tio n a / /dtp — N guyên C ong lidiìịỊ

li DEFINITION OF SHIP REGISTRATION 9

III REGISTRATION OF RIGHTS ON SHIP 12

CHAPTER II: CONDITỈONS AND LEGÍSLATIVE PROCEDURES FOR REGISTRATION AND DEREGISTRATION OF SHIP 17

L INTERNATIONAL LAW OF REGISTRATION OF SHIPS 17

BI IN SO CIALIST REPUBLIC OF VIETNAM 37

CHAPTER III: THE CURRENT SITUATION OF REGIATRATỈON OF

SHIPS IN VIETNAM AND THE IMPROVING SOLUTION 45

In this period, when Vietnamese Communist Party and Government plan to “mo cua” and create all advantages for any economic sectors to make business aiming to

modernization, attract foreign invertors into Vietnam, and help Vietnamese enterprises to w iden the market to abroad These things will accelerate Vietnam to

geographical conditions one o f which is leading national policy as đeveloping sca economy and íleel, and then, building a legal ữam e o f maritime law in generally, law

o f registration o f ships in detail

To d o ; above mention, an analytic and comparative methods between the regulations o f International Conventions and the actual rules o f some National Laws are very important For a person who has a íĩrst and very short time to study regulations o f International Conventions and the actual rules o f some National Laws about ship registration like me, It is a great interesting to approach a new legal order, that is the registration o f ship Because this problem very narrovv, I dare not have any ambition to make invention The purpose o f this thesis as contributing to clear the theorical and practical background o f the ship registration in Vietnam as well as in some other countries in the world, it helps to find out the major problems in registration activity as vvell as the legal problems related; practically contributing to the progress o f building the basic legal framework for the ship registration in Vietnam conveniently and well compliance with international general rule and law Shortcomings are inevitable due to my limited knowledge and time for doing it However, I hope to draw a general picture about the nature o f ship registration concept and ship registration làw

I am indebted to SIDA that gave me an invaluable chance to study about Swedish law, American law,etc and Swedish life during I study in Swiden at sumertime I ’d like to thanks to the Ha Noi Law ưniversity and the Faculty o f Law o f Lund University that help me so much during this Vietnam -Swedish M aster Programe, and

to all o f V ietnam ese, Swedish Professors Especially, I’m very much grateíul to Doc Lar M almberg and Doc Bui Xuan Nhu, my supervisor, 'Who was very patient to

o iĩe r kind helps to m e to com plete this thesis

The la g a l issu es o f sỉtip regh tration in V ietnam in com parison yviíh the req u ìren ten t o f in te rn a tio n a l Unv - N guyên C ong Bang

The la g a l issu es o f sh ip registraíion in Vietnam in com parison with the requ irem ent o f ìn tern a tỉo n a l law - N guyên C ong B an g

Abbreviations

pollution from ship 1973

1974

Certification and W atchkeeping for Seafarers 1978

1 The imperativc o f the subject:

The ocean w hich occupies 71% o f the earth’s space and includes diverse varieties

o f resources, is the transport route playing the veiy important role to the exislence and the developm ent o f human being One oí' thc choices oí' the human bciny, in the 21st century is going towards to sea, enhancing and extending the exploration and usage o f the ocean sources In practical, the most active cities in the world normally are the Coastal cities or the ones having the ways to the sea Two third o f the world population earn living from the sea trade More than 90% o f the world trade cargoes are transported by sea

Being a Coastal country with 3,260 km coastline long and many bays as well as river gates connecting to Pacifíc Ocean, Vietnam is one o f not many countries in the world having the diverse potential o f maritime economy Nearly half o f Vietnamese provinces and 117 among 631 districts are Coastal ones and have the sea-well related econoray Realizing this advantage, Vietnamese Com munist Party and State have given out many policies focussing on the target o f the country to be strong at sea and accelerate “building the strategy of developing sea and island economies”,

“developing shipbuilding and shipping; extending tourism; protecting environment; going towards the sea and owning the sea zone”'

It can be said that maritime activity is a vital one in developing the sea economies One o f the basic strategies o f the Vietnamese Government is developing strongly the domestic íleet in order to increase the shipping share o f Vietnamese íleet in the world market Up to August 2003, the Vietnamese íleet had had 880 vessels registered in the national registry book with the total DW T 2.5 million Within the íĩrst 6 months o f 2003, 880 times o f vessel registry had been deleted, 215 times o f vessel mortage checking had been done, and 81 times o f vessel mortage checking had been cancelled2 From these statistics, we can realize the importance o f the registration o f ship in Vietnam which is a State adm inistration activity on maritime in order to im plem ent the right and duty o f the flag State for the registered íleet,

1 R eso lu tio n o f C o m m u n ist party C ongress IX.

2 T he R eport o f V ietn am N ational M aritim e B ureau ab o u t R egistration o f ship and crew.

The la g a l issues o f sliip registration ỉn Vieínam in com parison with the req u irem en t o f in tern a tio n a l law - N guyen C ong B ang

contributing to the success o f the national fleet operation and creating the advantages for the developm ent o f the sea economies o f the country.

As we know, shipping is a typical and international industry When a ship is keel-

laying and registered, it also creates many legal problems relating to its existence until its registry is deleted from the registry book, such as: the operation o f the ship

in the journey from this country to the other; or the case when the ship o f which the shipowner is V ietnam ese is registered in Cambodia, but its crews are Philippinean and its shipm anager is Singpapore; or the problems o f the vessel ownership, mortage The registration o f ship serves the purpose o f either public law or private Iaw, or both

in order to deal with the legal problems during the existing period o f the vessels The ship registration is very useful for the country, depends much on the country’s regulations and has to comply with the international law In order to implement the ship registration effectively, the construction and completion o f the law system for maritime inđustry in general, and particular o f ship registration shoulcl bc taken care

by the Government, because they not only determine the country’s sovereignty, but also comply with the international relations in the integration trend novvaclays

From the above mentioned reasons, I choose the subject namely ”The legal issues

o f the ship registration in Vietnam in comparison with the requircment o f the international law”

2 The purposc o f the thesis and researching method:

The researcìùng purpose: As contributing to clear the theorical and practical

background o f the ship registration in Vietnam as well as in some other counlries in the world, it helps to find out the major problems in registration activity as well as the legal problem s related; practically contributing to the progress o f building the basic legal framework for the ship registration in Vietnam conveniently and well compliance w ith international general rule and law

The researcìùng m ethod: I use an analytic and com parative methods between the

regulations o f international Conventions and the actual rules o f some national Laws

3 The lim it o f the thesis: The subject o f the thesis has a narrow scale which

relates mostly to the policies o f the states in registration o f ship and some international Conventions Thereíbre, in this thesis, I focus on the, basis of

The la g a l issu es fìf sh ip registration in Vỉetnam in com parison with the req u irem en t tìf ìn tern iitỉon al !a\v — N gu yên C ong B a n g

registration o f ships, registration o f the rights on ships as well as the implementing the arbitration o f the flag State in the world and in Vietnam Then, I shall make the comparison betvveen íhem to fmd the coníbrmities and disconíbrmitics o f thc solutions in constructing Vietnamese law in registration o f ship.

4 The new contribution to Science of the thesis:

The thesis analyse clearly the concepts o f ships, nationality o f ships, registration

Ị

of ships basing on the regulations o f international Conventions and national Laws in order to give out the basic concept o f ships and registration o f ships, and the solutions to improve Vietnamese Law in registration o f ships, specially in intergration conditions nowadays

5 The m caning o f thc thesis:

By the researching result, I wish to contribute in studying an issue regulated in Vietnamese law now in relation to international laws under the analysis view o f the concepts and comparison with the actual regulations o f the states Thus, the thesis is the premise o f more studies o f detail aspects in constructing Vietnamese Law

The thesis can be used as conference for Vietnamese as well as foreign lawyers, legal experts, legal researchers in studying maritime Iaw It is also useful for the

students wishing lo w iden the knowledge o f comparison law and maritime law - which are the very new subjects in training o f law in Vietnam

6 The structure o f thc thesis:

Beside the introduction, conclusion and conference, the thesis includes 3 chapters

as following:

Chapter 1: General introduction o f registration o f ships

avoid the shortcomings and restricts, thc author hopcs to rcccivc Ihc com mcnls and helps from the teachers, colleagues and readers concerning tliis subject.

The ỉagal issu es o f sỉù p regỉstration in V ictnam in co m parison ìuit/i the requ irem ent o f in íern a tio n a l la w - N gu yen C on g B a n g

Chapter I: General introduction of registration of ship

In some other countries, the concept o f ships is narrovver which is relatecl to the ship operations For instance, in the traditional maritime states, the concept o f the ships running domestic is often stated differently from the ships running abroad, even the regulations o f registration o f ships’ nationality are devided into different parts

1.1.2.Definition o f nationality o f ships

N aitonality assumes its importance because shipping is an international activity It

is international in two ways First, maritime transport will necessarily take place

The Ingal issues <>f sh ip registraíion in Vietnam in com parison miílt the reqiù ren ien t o f in te rn a tio n a l ỉa\v - N guyên C ong B an g

3 See M aritim e C o d e o f the PR C , pp 5-6.

4 See V ietn am e se M a ritim e C ode, 1990, A rticle 1, p p 1 1

5See V ietn am e se M aritim e C ode, 1990, A rticle 8, pp 19

between at least two countries Second, it is often international in thc sensc thai economic interests o f đifferent states are involved6.

Thus e.g a tanker may be registered in Liberia, manned with a Polish crew, manageđ by a Norwegian manager and be beneíicially owned by nationals o f the Pcderal Republic o f Germany As can bc secn from this examplc, il is a conccpl thai cannot easily be assimilated with that oí' nationality o f corporations, let alone noationality o f natural persons It is in fact a highly equivocal concept in economic and political terms Yet in legan terms it can be clearly deíineđ The nationaiity o f a ship is its nexus with a particular country This nexus is acknowledgcd by that country and it is recognized as such by the international community The nexus is attributed by that particular country As long as a ship is owned by an induviđual citizen o f the country attributing nationality, the concept is unambiguous

N ationality is the basic concept in international shipping Nationality can be vievved as a concept o f international law: the rights and duties o f a State regarding a ship It can also be viewed as a concept o f municipal law: their rights and duties for

an individual shipovvner or operator under national law The latter are largely determined by international law We will be mainly concerned with the concept in intcrnational law perspeelive The coneept o f nationalily has madc il possìble to allocate jurisdiction over merchant vessels

There are two basic considerations to be taken into account when attributing jurisdiction over merchant vessels First, while each State has jurisdiction over its territory, no State has territorial jurisdiction on the high seas Without clearly allocated and properly exercised jurisdiction, activities on the oceans would be left in disorder7 Second, maritime transport usually takes place betvveen different sovereign states and it involves ships concerned It is thereíbre important to develop rules for the attribution o f jurisdiction among interested States The proper exercise of jurisdiction enables States to safeguard their property and people in the course of maritime transport

The jurisdiction o f the flag State over a ship diminishes when it approaches a port

In the Exclusive Economic Zone the littoral State has certain powers The powers of

6 See F alk an g er, B ull, In troduction to M aritim e Law , p 60-63

7 See Cf C a fru n y , R u lin g the W aves, U niversity o f C a liíb n ia Press, B erk eley 1987, C h ap ter I.

The la g a l issu es o f sliip registration in Vietnam ỉn com parison wỉth the requ irem ent o f in íern a tio n a l la\v - N guyen C ong B an g

the littoral State increase in the territorial waters The port State has even further reaching powers.

Notwithstanding the fact that the Coastal State and the port State have certain powers over íoreign ships within their territorial scope, the ílag State is ultimately responsible

In ƯNLOS 1982, additional ílag State duties as a consequence o f granting nationality are laicl down on the subject o f assistance to, and rescue of, persons found

at sea; concerning the prevention o f and punishment for transportation o f slaves; on regulations to prevent pollution by ships, on measures making the breaking or injury

of a submarine cable a punishable offence,etc

Furthermore, many IM O8 Conventions, e.g SOLAS9, M A R PO L10,and STCW n ,

as well as most o f the ILO12 Conventions, specify the rights and duties o f flag States

in respect o f their vesseỉs

The responsibility o f the flag State takes effect already beíore a ship is put into

Service i.e is registered It continues to apply during its Service

Nationality gives the ship, the crew, the shipowner, the shipoperator and the cargo-ovvner righls and duties Many o f thesc arc containcđ in spccilìc maritimc conventions such as SOLAS, MARPOL and CO LREG 13 Other rights and duties are contained or devised from private maritime law conventions such as “the Hague rules”, “the Hague-Visby rules”, the “York-Antwerp rules” and the Salvage Convention, etc

A fmal category o f rights and duties has been developed in international public law

The national shipping policy has problem in determining the conditions the ships have to meet to get nationality The States grant nationality to the ship only when

The logal ìssues tìf sỉtip registration in Vietnam ÌII com parison n>i(li thư requ irem en í o f in tern a tio n a l law - N guyen C ong B ang

8 International M a ritim e O rg an izatio n

9 International C o n v e n tio n for the S afety o f L ife at S ea 1974

" Intern atio n al C o n v e n tio n fo r the prev en tio n o f pollution from ships, 1973

1 Intern atio n al C o n v e n tio n on S tandarđs o f T rain in g , C e rtiííc atio n an d W atc h k ee p in g for the

Seafarers, 1978.

12 Intern atio n al L a b o u r O rg an isatio n

1 C o n v e n tio n on th e In tern atio n al R egulations for P re v en tin g C o llissio n s at Sea, UN R eg.N A r 15824.

Singli, Intern atio n al M a ritim e Law C o n v en tio n (1 9 8 3 ), vol 1, page 3.

their certain requirements are met W hen granting nationality, the situation in which the ships have double nationalities should be avoided.

1.2.Acceptant of nationality

As above mentioned, nationality o f ship goes vvith the rights and duties o f each State granting the nationality to the ship Thereíbre, the State’s acceptant of nationality o f ship is very important It has international meaning when the ship runs

at sea or approaches the foreign ports

The flag the ship ílies is the Symbol o f its nationality, and the term “flag State” gencrally denotes thc State whose nationality a ship has In international law, thc concept o f flag State jurisdiction, is the basic jurisdiction (i.e ships which are registered as national ships and ships which othervvise explicitly or implicitly recognized by national law as national ships) Only national ships shall fly the national flag, and therelore w hencver the nationality o f ship is acceptcd, it also reícrs the responsibility o f the flag State The flag State shall issue to ships to which it has granted the right to fly its flag documents proving the nationality o f the ship Basing

on that, the nationality o f the ship is accepted

The acceptance o f ship nationality is in national maritim e policy when the State determines the conditions that the ship has to meet to be granted the nationality Hovvever, the important thing in granting the nationality to the ship is the situation in which the ship has double nationality should be avoided

Besides, the acceptance o f ship nationality also means the national acceptance of the responsibility for im plementing the safety test on the ship ílying the national flag

1.3.Temporary nationality of ship

The legislation o f some states provides for the granting o f nationality to ships on the temporary basis This may be done for a number o f reasons For example, the r.ationality o f a State may be tem porarily given to a ship when a national charterer vảshes to fly the national flag during the period o f the charter on a ship vvhich does rot meet the requirements necessary to grant natinality under normal conditions

A State may accord temporary nationality to some ships for commercial or related ríasons, for example, where the State is faced with a shortage o f tonnage under its

The la g a l issu es o f sìtìp reỊỊÌsíraíỉon ỉn Vietnam in com parison mitli the reqiiircincní <)f In lcn in íìoiial Imv — N gu yên Co/IỊỊ Hang

flag and some tonnage is required for a particular purpose (e.g in connection with the application o f the United Nations Convention on a Code o f Conduct for Liner Conferences).

II.Defmition o f ship registration

Registration may also be discussed in economic terms Thus it is a necessary condition for trading Only registered ships can engage in trading It should be noted that registration is not the same as licensing Licensing always implies a quantitative regulation o f market access Registration may be viewed as regulating access to the market in a qualitative sense Every ship which has fulfilled the registration requirements is allovved to trade

Furthermore, registration can be viewed as an important cost factor to the owner Registration will only be eữected if the relevant construction and safety requiremetns have been met These will cost the shipovvner money It is conceivable that countries

do not set their nationality requirements at the level o f the international conventions

To the extent that this happens, shipowners registering in such countries will face lower costs It must be pointed out, hovverver, that such situations will be very rare.The country o f registration will decide the actual operating costs These costs diíler substantially from one country to another The main differences are due to vatiations in manning scales and wage levels There may be other dií'ferences such as tax íacilities and subsidies, both for construction and for operating ships Somc countries provide cheap loans, others require that loans are acquired through State

banks at higher costs Some countries secure cargo for ships o f their nationality by way o f cargo reservation (usually for government cargo), cargo sharing, and long term charters Finally, actual registration feess may differ from One country to another

Registration may also be vievved from a macro-economic point o f view The registration conditions o f a particular countiy will iníluence its share in world shipping Countries like Panama and especially Liberia have deliberately set their conditions for registration at such a level that they attracted a great deal o f foreign tonnage For both countries, the income derived from the registration o f ships constitutes an important source of income

The la g a l issnes ọ f ship rcỊỊÌstrathn ÌII Vietnant ÌII com pơristìn U’itli llii’ requ irem en í o f in íen in tio n a l law - N guyên C ong B an g

There is another concepl which is used in the contcxt o f registration o f ships, i.c the genuine link There has been a lively debate on the question where international law imposes or should impose a duty on the State registering a ship to secure that there will be a clear nexus betvveen the ship and the country Countries which are regarded as being too permissive are known as ”open registxy” or ”genuine link” issue has mainly been brought to the fore by labour unions in the traditional maritime countries and by the dcveloping nations The issue is hnportant to many in Ihe world

o f shipping Developing nations feel that (he existence o f opcn rcgislrics has dcprivcd Ihcm o ĩo p p o lu n itics to incrcasc thcir national merchant marinc The labour unions are concerned that ”flagging out” will cost them jobs The traditional maritime countries are concerned because o f the decline o f their íleets Shipowners

in these countries have an ambiguous attitude They do like the advantages that go with the status thc ílag carries

Registration is the administrative act by which the nationality and the collateral rights and duties are conferred to a ship14 According to internatiorial law each State may fix the conditions which govern the granting o f its nationality Therefore, a ship can be registered in any State if it can meet its conditions

Rcgistration is cffcctcd by entering thc ship in the national ship’s rcgister The ship’s register o f a State lists the ships which are registered in that State and vvhich thereíbre, come within the national jurisdiction o f that State By placing a ship on its shipping register a State assumes the authority o f exercise over the ship the power inherent in the “jurisdiction o f the flag State” : and undertakes the national and international responsibilities o f the ílag State (State o f nationality) in relation to that ship

Registration may be made conditional to the vessel being wholly or partly (e.g 50% or more) owned by nationals, residents or corporations incorporated under national law If registration by the bareboat charterer is deemed convenient, nationality may be granted on condition that the charterer is a national, resident or

Corporation incorporated under national law

The la g a l issues o f sỉtip regìsíration in Vỉetnam in com parison ìvitli tlie requ irem en t o f in tern a tỉo n a l la w - N guyen C ong B a n g

14 By contrast, see M eijers, H T h e n atio n ality o f ships, p age 139 M e y ers d istin g u ish e s tvvo system s:

1 n atio n ality is a u to m atica lly co n ferred w hen certain co n d itio n s are fulfĩlled;

2 n atio n ality is co n fe rred by an exp licit act o f the ad m in istratio n

The logal issues o f sltip regìstratìon in Vỉetnam in comparison wiíh the requừcm ent ()f iníerna/ional la\v - Nguyên Cong Bang

It may also be required that the principal placc o f business o f thc Corporation

owning the vessel be locaed in the State Likevvise it may be required that the head

office or the principal place o f business o f the chartering Corporation be locatecl in the State Requirements pertaining to ownership, and the head officeof the principal place o f business determine the degree o f control that the State has over the owner vessel

Some states require that the vessel be manned totally or partially by nationals Requirements concerning the crew give the flag State a greater degree o f control over the vessel in the event o f w ar Such requirements can further national employment policies

III.Registration o f rights on ship

1.Registration of the property

In basically, the property right is defined quite the same, it includes rights of possession, rights o f use and rights o f distermine

Vietnamese Civil Code 1995 states at Article 173 about property right as following:

Property right includes rights o f possession, rights o f use and rights o f distermine

o f the owner as being regulated by law 15

The owner can be individual, legal organization with enough rights o f possession, use and distermine

In maritime activity, the property rights, e.g title in and benefit o f ships, and security interests, e.g registerable charges securing monies due by the owner (such

as mortgages and hypothecs) may be recorded in the ships register at the shipowner’s State or íòreign State

2.Registration of maritime mortgage and liens

Underhere the registration o f maritime mortgage and liens will be viewed under the international Conventions And they will be viewed under national scale aữerall

15 See V ietn am ese C iv il C ode, 1995, A rticle 173.

Article 3 o f the International Convention for the Uniíĩcation o f Certain Rules Relating to M aritime Liens and M ortgages signed in Brussels at Brussels, 27 May

1967 proviđcs tlial no contracting State shall pcrmit thc dercgislrnlion o f a vcsscl

w ithout the written consent o f all holders o f registered mortgages and

“hypotheques”, and aims to avoid the double registration o f vessels It is intended to protect the mortgage

Special provisions may be found in the 1967 Convention on M aritime Liens and

M ortgages in respcct o f deregistration in the event o f forced sale Article 11 o f the Convention states that upon production o f a certiíicate issued by the Court conducting the sale o f that the vessel is sold free from all mortgages, liens and other encumbrances the registrar shall delete all regisíered mortgages and register the vessel in the nam e o f the purchaser or issue a certiíĩcate o f deregistration if this is applied fo r16

The Convention Relating to Registration o f Rights ofV essels Under Construction, signed at Brussels 27 May 1967 provides in Article 10 that a vessel which is being or has been constructed in a Contracting State unless a Cerliíicate has been issued by the form er State to the effect that the rights registered in the register have been or will bc deregistercd Although this is nol clearly slated, this implies Ihc removal oi' the vessel from the former register

Registration o f rights on ships under construction is the subject o f uniform regulation in the 1967 Brussels Convention on Registration o f Rights in Respect of Vessels Under Construction This C onvention embodies substantive rules and private international law rules The former entails the obligation o f contracting States to permit the registration in a public register o f mortgages and hypothecs The latter concern the law governing the effects o f registration, which is that o f the State where the vessel is being constructed, the ranking between mortgages or hypothecs and liens and rights o f retention, which is that applicable after completion o f the vessel and the law governing the procedure o f enforcem ent, which is that o f the State where eníòrcem ent takes place

The la g a l issu es o f sltip regisíraíion in Vietnam in com parison wiih the req u ireto en t o f in tern a tio n a l law - N guyên C ong B an g

16 See T h e In tern atio n al C o n v en tio n for the U n iíic a tio n o f C ertain R ules R elating to M aritim e Liens and M o rtg ag e s, B ru sse l, 1967, p ag e 9.

Registration o f rights on completed ships is governed by the 1926 and the 1967 Brussels Conventions on Maritime Liens and Mortgages Both these Conventions, o f vvhich only the former is in force, provide that mortgages and hypothecs are governed by the law o f the State where registration and hypothecs duly effected in accordance with such law under certain conditions These conditions are more specifically set out in thc 1967 Convention and consist in the fact that the register and any instrument required to be deposited with the registrar or any instrument required to be deposited specifies the name and address o f the person in whose favour the mortgage, or hypothec has been effected, the amount secured and the datc and other particulars which, according to Ihc law o f the State o f registration, determine the rank as respects other registered mortgages or hypothecs.

All the above contents have been mentioned clearly and detailedly in thc International Convention o f Maritime Liens and M ortgages (Geneva, 6 May 1993) This Convention provides fully the acceptance, mortgages and liens, changing the ovvnership/registration,

3.Registraíion of vessels in bareboat charter

Is has become increasingly common, in recent years, to register vessels which have been chartered on a long term basis, i.e demise or bareboat charters, in the country o the charterer There are several sound commercial reasons for doing this

In this way, shipowners may beneíìt ữom construction subsidies in one country and from low manning costs in another This would be possible if a vessel was originally acquired in the Federal Republic o f Germany and subsequently chartered to a Phillipine company The mạịority o f the bareboat charters has been registered in the Philipine Thus, the charterer has access to cheap labour while at the same time establishing an economic link between the vessel and the country o f registration.The reasons for effecting the fìrst registration in another country are diffírent Construction or acquisition subsidies and better fmancial terms seel to be the most important ones

Article 12 o f the UN Convention on Conditions for Registration o f Ships lays down rules for bareboat charters This Article provides the jurisdiction o f the State to the permitting bareboat charters, considering the charlerer as the shipowner,etc

The ỉa g a l issu es tìf sh ip registraíion in Vietnam in com parison ìviíh the req u ừ em en t o f in tern a tio n a l law - N guyen C ong B an g

The lagal issues o f slùp registration in Victnam ỉn comparison ìvitli the requirem ent o f intem ationaỉ law - Nguyên Cong Bung

It is importniil tu IIOÍC thai llic bnicboal chnrlerer hus to eomply tLilly vvilli llic conditions o f the Convcntion This takes away the objection that the practicc of registering bareboat charters would circumvent the normal conditions íbr registration

The purpose o f registering a bareboat charter is usually to create a legal situation whereby the vessel will remail in its original register while at the same time being listed in the new register This requires active cooperation between the two countries involved Article 12 is not very specific on this point Paragraph 5 states that íhc State where the bareboat chartered ship is registered shall ensure that the former flag

State is notiíĩed o f the deletion o f the registration o f the ship Presumably this refers

to the cancellalion o f tlic registration o f the barcboat charlered ship aíìer tho expiration o f the charter The provision cannot possibly refer to the cancellation of the registration in the former flag State at the moment o f registration in the new flag State It would be most undesirable if the new flag State could achieve such a cancellation

This implies, however, that this Article is silent about the legal position during the actual registration in the new flag State, i.e the period o f the charter in order to protect thc rights o f thc mortgagce, i.c thc creditor or the bank, il will be essenlial that the original registration is maintained However, the new flag State will exercise full jurisdiction and control The only way to reconcile these two is to leave the original registration with an annotation that the vessel is temporarily registered in the country vvhere the bareboat charterer resides In that way the vessel is placed on an inactive register in the íbrmer flag State This can be effecteđ by notiíĩcation Such notifícation should be given by the new to the former flag State As corollary the íòrm er flag State should iníòrm the new flag State about mortgages and other encumbrance on the vessel This could either be done directly by notiíying the prostective flag State or indirectly with a declaration given to the owner

IV Registrar of ship

4.1 Purpose of the register

The register may serve the purpose o f both public law and private lavv, or there may be two registers, each devoted to one o f these íunctions A clear provision as to

The /ngai issues o f slíip rcgisiraíion in Victnam ÌII compurixon H'ifỉi thí’ requirem ent <)J Inlenintioinil ỈIÍ\V - Nguyên Cong Bang

the function o f the register (registration o f ships, o f rights on ships, or both) is

necessary 7

4.2 Duties of the registrar

Such duties may include: Instructions concerning the entry and cancellatiọn of an entry; V erílcation o f the documents; Rules as to the issue o f a certiiìcate o f registration

4.3 Information to be kept in the register

Such information may include:

Identity o f the sliip e.g., name, year and place where the ship was built,

tonnage, length, etc.;

Name(s), nationality, address(es) o f owner(s), operator and manager;

In the case o f more than one owner, their respective shares in the ship;

In case o f an owner-corporation, the names, nationality and addresses o f the major sharehoỉders and the directors and supervisory derectors as well as the place of

the head office o f the Corporation;

The seat o f the company managing the ship

It is useful to include a provision for compulsory notification o f Ihe registrar of any change in the above iníbrmation

4.4 Place \vhere one can register

The fírst question to be resolved is vvhether to organize registration centrally or in different ports

If registration is centrally organized there may be only one Central vvhich may not

be inconvenient in a sm all State; there m ay be branch offíces o f the Central register to

keep it up to date Central registration is practiced in M exico, Liberia, Panama, Argentina, Venezuela and the Neitherlands

' T H Ư VI Ệ N

17 See E co n o m ic R e g u la tio n on M aritim e T ransport, P J.Slot, 1990, p age 41.

In a system oí' decentralized registration, each port has its own register and only through special procedures can transfer to another register take place This system is used in the United Kingdom.

The la g a l issu es o f sliip regisíratìon ìn Vietnam in com parison yvith the requ irem en t ()f in ten iíitio n a l la\v - N g u y en C ong Iỉang

The lagal issues o f ship registration in Vietnam in comparison with the rcquircm ent o f internaium al law - Nguyên Cong ỉiang

Chapter II: Conditions and legislative procedures for

registration and deregistration of ships

I International law of registration of ships

1.The 1958 Geneva Convention on the High Seas

Purpose o f this convention is mainly to fix the rules on identiíication o f the nationality o f ships, and how to fly a flag in different type o f waters In Article.5 and

10 are referring to the exercise o f jurisdiction and control in administrative, social and technical matters o f the State over the ships ílying its ílag

Ít is also the íìrst convention containing in it’s Article 5 the idea o f a genuinc link, which was taken up by the United Nations convention on the Law o f the Sea from

1982 It says, that as a condition for granting nationality, and thereíore for registraúon, Ihcre must cxist a gcnuinc link bctwccn the ship and Ihc Slatc of registration

2.The United Nations Convention on the Law of the Sea 1982 (UNCLOS 1982)

This convention íĩxes, that the íreedom o f the high seas is exercised by States under the conditions laid down by the Convenlion and other rules o f internationai law, especially “w ith due regard for the interests o f other states”

The Convention mention the State to fix conditions for ship to get its nationality, conditions o f registration o f ship vvithin its territory and necessary conditions o f ships

to fly its flag

When a State allows a ship ílying is flag, the State has obligations on that ship It means that the State has to implement the jurisdiction and control on the ship in

adm inistrative, technological and social fields The State should have m aritim e

registry book recording ali the ships with their own aspects ílying naúonal flag; meantime it has to implement its jurisdiction in compliance with the national law on the ship in administrative, technical and social íĩelds relating to the ship

3.The United nations Convention on Conditions for Registration

of Ships 1986

This convention ensures and strengthens thc rclations beíwccn a State and the ships ílying its flag under the effective complimentation o f jurisdiction and control of administration, technology and society,

The Registration Convention was adopted on 8 February 198618 That this happened with consensus is remarkable, considering the previous opposition o f opcn registry countries to a binding agrement First, the agreement may be binding, but the enforcement o f the Convention is left to the ílag State

The text o f the Convention is o f a compromise nature This is evidenced by the loose formulation o f the obligations o f State parties and by the ửequent use of undeĩined key expressions It is put forward that the text o f the Convention allows States consiđerable, if not entire, freedom in implementing the Convention To support this Ihesis, the articles on registration conditions and on the exercisc of ịurisdiction and brieíly analyzed

The íirst basic rule o f the Convention is that contracting parties must ensure that the ships which they register meet the registration conditions These conditions relate

to the national participation in the equity o f a ship-owning company (Article 8), the manning o f ships with nationals (Article 9) and the national participation in the namagement o f the shipowning company (Articlc 10)

These three articles elaborate the concept o f the genuine link by laying down

principles to be observed by a State when setting registration conditions These principles relate to the national participation in the equity and management of a shipowning company and the manning o f ships with nationals These articles, however, leave States considerable ữeedom in implementing the principles

Article 8 requires a State to provide in its laws and regulations for the ownership

o f ships ílying its ílags Paragraph 2 adds that:

”In such laws and regulations the flag State shall include appropriate provisions for participation by that State or its nationals as owners o f ships Aying its flag or in the ownership o f such ships and for the level o f such participation”

The la g a l issues o f sliip registration in Vietnam in com parison wỉth the requ irem en t o f in íern aíion al law - N guyen C ong B an g

18 U nited N atio n s C o n v e n tio n on C onditions for R cgistration o f S hips T D /R ^ C O N P / ^ o f 13 M arch 1986.

Therefore, while laying down the principle o f equity participation in shipowning companies by nationals - an element o f the economic genuine link - the article leaves it to each individual State to determine what is ”appropriate” The only provision, contained in the second sentence o f paragraph 2, is that:

”These laws and regulations should be sufficient to permit the flag State toexercise effectively its jurisdiction and control over ships ílying its flag”

Again, the íbrm ulation is so general that no substantial restriction o f a state’sfreedom to determine registration conditions results

Article 10 provides Ihat either the shipowning company or a subsidiary has to be established or to have its principle place o f business in the State o f registration I f

that is not the case, the company should have a representative or management person who must be a national or resident o f that State and is authorized to act on the com pany’s behalf

This Article seems to limit a State’s íreedom in setting conditions, but it may be questioned what the actual impact will be If, for instance, a shell company incorporated in the State o f registration qualifíẹs as a subsidiary there will be no limitation in practice As the term ”subsidiary” has not been defmed, this may very well be the case

In addition, to the íreedom which the formulations o f the key provisions leave States in setting conditions, Article 7 allows a contracting party to choose whether to set ownership requiremetns as contained in Article 8 or manning conditions as contained in Article 9 Furthermore,- Article 12 enables the registration o f ships bareboat chartered-in, if the bareboat charterer meets the requirem ents o f Article 7 to

10 enstead o f the owner This Article provides for the often occurring situation that a company in a particular State wishes to bareboat charter a ship registered in another State, provided that the ship can be registered in the State o f the bareboat charterer19 The convention m arkes it possible that the original registration is maintained This will be particularly relevant in case a mortgage or other rights on the ship have been registered This is allowed if and when the original flag State suspends the ship’s

19 T he P h ilip in e fleet for instance, consists for a large part o f ships b are b o at chatered-in Since

en a b lin g legislation w as ad o p ted in 1975, th e P h ilippine fleet has g ro w n from 8 7 8 ,0 0 0 D W T to 9.9

m ilion D W T b y the en d o f 1985,

The la g a l issues fíf ship registratioit in Vietnam in com parison with the requ irem en t tì f in íe n ta íio n a ỉ ìaw - N guyên C ong B an g

right to fly the ílag This is in line with the requirement o f Article 92 o f UNCLOS which prohibits the double nationality o f a ship Article 12 has been criticized for allowing an owner to charter out his ship to a shell company incorporated in a State which is not a party to the Convention, and thus evading any o f th requirements of the convention This does not seem to be a valid criticism, as the bareboat charterer with have ío comply with the same requirements as the owner Bccausc requirements, as indicated above, may not be very strict, it seems unlikely that the owner will resort to Article 12 to evade those requirements20.

Article requires flag States to have a competent and adequate national maritime

a c l m i n i s l m l i o i i T h n l s c c m s U) b o a n c c c N s u r y r e q u i r e m e n l i n tlŨN c o n l e x l A l t h o u g h iu

practice one may hold different opinions on what is com petent and adequate, Article

5 leaves it to each State to determine the practical implementation thereof Article 5 also provides that a flag State shall implement ”applicable international rules and standarts” concerning matters such as the safcty o f persons on board and thc prevention o f pollution The enforcement o f these and other rules is assigned to the national maritime administration Article 5 restricts the flag State’s obligations to

”applicable” rules - and a convention can only be said to apply to those states which

are a party to il

Article 6 relates to the identiíication and accountability o f shipowners and operators The premise is that owners and operations have to be identiíiable to ensure their fulỉ accountability

Article 6 specifies which information on the owner and the operator a register should contain In addition it provides for availability o that iníòrm ation to third parties, including port States The principle o f accountability is elaborated in Article

10, paragraph 3: owners and operators should be adequately insured against third party liability In addition, a State o f registration should enabỉe the crew to recover wages and related rnonies ữom their employer The Article suggests that this may be achieved by giving the crew a lien on the ship to the amount o f the wages, or by

20 U N T A D sa n ctio n s o p en registry In: A m erican S hipper, A pril 1986, p ag e 6 0 6 1 T he retnark com es from M r G M a itla n d , o fficial o f th e In ternational T ru st C o m p an y w h ic h ad m in isters the L iberian ship registry A t the re q u e st o f the Intern atio n al C h a m b e r o f C om rrerce, M r M a itland has later given

a m ore th o ro u g h ev a lu a tio n o f the b are b o atc h arter p ro v isio n s o f th e C o n v e n tio n T h ese raise several

im p o rta n t q u estio n s o f p riv a te m aritim e law such as the ap p licab le law in case o f ran k in g o f

m o rtg a g es and o f m a ritim e liens IC C D o cu m en t N o 321-324/1N T 45 o f 9 O ctober, 1986

Tlìe ỉa g a l issnes <)f sliip regislralion in Vietnam ÌII com parison with thi' requ ìrem en í o f ìn tern ation aỉ la\ị> - N guyen C ong B a n g

providing for a m utual fund, a w age insurance, a social recurity schem e or another

”appropriate m echanism ” This Article seems more innovative than it probably is, because the great majority o f shipowners is insured against third party liability, although it is true that m ost States leave this to the shipow ners’ responsibility - with the nótable exception o f liability for oil pollution damage It may be noted that most States in their m aritim e legislation provide for a maritime lien for recovering o f crew’s wages

Article 11, íĩnally, concerns the ship’s rẹgister and speciíies the particulars to be recorded The information required will help to identify owners and operators and will enhance the flag State’s possibilities for control o f ships ílying its ílag

4.IMO Conventions

The International M aritime Organization (IMO) is the United N ations’ specialised agency responsible for improving maritime safety and preventing pollution from ships21 To improve these purposes, the IMO has prepared several important conventions, w hich are important to ship registration, as the ratiíying flag State has

to saíeguard and supervise the standards set out in these Conventions on the ships on its register They are also important for the application procedure for the registcr, as ships to be registered have to satisíy the requirements set out in the Conventions For instance:

- The international convention for the safety o f life at sea 1974 (SOLAS 1974)The m ain obịective o f this convention is to speciíy minimum standards for the construction, equipm ent and operation o f ships, compatible with their safety Flag States are responsible for ensuring that ships under their ílag comply with its requirements

- International Convention on Standard o f Training, Certiíication and Watchkeeping for Seafarers 1978 (STCW 1978)

The C onvention was the first to establish basic requirements on training, certification and watchkeeping for seafarers on an intemational level The member States observe, survey the complimentation o f requirements on masters, chief mastes and officers on their ships

21 See h ttp ://w w w im o o rg /im o /in tro d h tm

The la g a l ỉssu es o f sh ip registratỉon in V ietnam in com parison wỉth the req u ỉrem en t o f in tern a tio n a l law - N guyen C ong B an g

- The international convention for the prevention o f pollution from ships 1973, as modifíed by the Protocol o f 1978 relating thereto (M ARPOL 73/78)

This Convention contains regulations for the prevention o f various forms of pollution Important for the registration o f ships are several provisions which are demanding special requirements for the design and construction o f a ship

5.ILO Conventions

One o f the purposes connected tọ the ĩield o f ship registration is to provide appropriate working conditions for seafarers, like working times, working environment and defferent kinds of insurance,etc

The ílag State has to provide the appropriate national laws lo adopt the Conventions and the surveillance o f the conditions on ships on its register The shipowner self has to provide these conditions on the ship ílying a flag appropriate to the laws o f this State

To ensure w orldw ide high standards for the conditions o f the seafarers, the International Transport-workers Federation (ITF) is releasing regarding techical standards and social welfare the socalled “blue certiĩicate” This is a certificate that is released to shipovmers which are operating their vessels under certain standards fixed by the ITF even if the ílag State has not ratified certain important ILO Conventions

Il.Cases in some countries

In this part, the author would like to cornpare the registration o f ships in Sweden, Norway, China and Panama which are the qualiíied registrar as Norway, Sweden; open registration as Panam a and detailed registration as China

l.Svveden

Considering shipping as an international maritime business, Sweden which is one

of the countries having the most advance maritime industry has given out the regulations on m aritim e in generally, on registration o f ships in detail These are based on the cooperation o f the North European countries ãnd as the result, the Swedish M aritime Code was bom in 1994

The la g a l issu es o f sh ip registratỉon in Vietnam ìn com parison with the req u ỉrem en t o f in íern a tio n a ỉ ỉaw - N guyen C ong B an g

l.ỉ.C onditions on registration of ships

A vessel registered in Svveden is larger than 12m length and 4m beam, and is designed as a ship22

Normally, only Swedish owned ships can be registered in Sweden But with the strong developm ent o f European Commission, the Swedish registration was also 1'or the ships o f other states o f EC However, in fact, for the m erchant fleet o f EC without the joint o f Swedish vessels, one o f the conditions should be that the shipping company is established by a Swedish commercial organization and managed and conlrolled by Swedish persons

The ship m ust be named and this name is determined by the shipowner The registrar let the shipovvner study and determine the ship’s name for a while

A ship under construction in Sweden may be entered into the Register o f Ships under Construction Such registration may take place before the construction work has begun, provided the building can be adequately identiíied by means o f yard number, drawings or otherwise

A ship shall be registered under her idei)tification signal A ship under construction shall be identiíìed under signal letters TỈiese shall be assigned to the completed ship as her identiíication signal when she is entered into the Register of Ships A register designation once assigned may not be changed

Any person who has acquired title to a ship which in his hands is subject to registration but which has not yet been entered into the Registration o f the ship, within 1 m onth o f the acquisition, apply for registration o f the ship

Within 6 months after launching the ship, the shipowner has to apply for registration o f the ship in the Register o f Ships

For the foreign ships under consideration o f registration, they must be deregistered the old nationality beíòre

1.2 Steps and procedures for registration of ships

The estate o f a deceased person need not apply for inscription o f its title to a ship

01 a registered shipbuilding which belonged to the deceased, unless the estale

22 See The Svvedish M aritim e C ode, 1994, T ra n sla to r’s note, C h a p te r I.

The la g a l issues o f sìíip rcgistration in Vietnam in com parison wiíli llit’ requ irem en í o f Iníernaíỉưnul !aw - N gu y en C ong Bung