Functions of Flag State in the Present Day Shipping Industry

A major chunk of ship owners avails professional flag state services to look after their fleet’s flag requirements. Let’s find out why!

One of the biggest decisions ship owners need to make pertains to the flag they choose to sail on the vessel. What makes this tough is the fact that there are so many flags to choose from, and each one comes with its own set of pros and cons. Every shipowner faces this dilemma when:

• Registering a new build;
• Changing flag due to needs of the business; or
• Concluding a bareboat contract.

Shipowners have the complete freedom to register vessel from their preferred state. Their main focus is on minimizing costs and maximizing revenue. If an owner wants to use an open registry, there are many options which offer similar registration terms.

However, there are a couple of key differences worth pointing out. This post examines some of those differences along with the factors which shippers need to take into account before they land on a decision.Let’s delve deeper into the subject.

How does it work?

Every merchant ship needs to be registered to a particular state. It is then bound to display the flag of the said state and follow the set of rules &regulations set forth by the same.

However, not all vessels are registered in their owners’ country of origin. The country which registers the ship and grants it the legal rights to operate is the flag state. When this registration is in a different state than the owner’s home country, then it is known as Flag of Convenience (FOC).

The vessel in question has to follow all the rules, protocols, and stipulations set by their respective flag state as well as the rules and requirements of navigating through international waters.

If a country wants to be deemed as a flag state, it needs to showcase the essential maritime infrastructure (financial as well as technical).Furthermore, it should adhere to the Code of Conduct established by various International Maritime Organizations (IMO).

In case any registered ship fails to comply with the imposed norms, the country listed as a flag state needs to be prepared to impose an unbiased penalty on the offending vessel.

Flag State vs. Port Agency

A state is called Flag State when it is registered in its own country – the ships carry its flag. A Port State is any country with its international port. Let’s consider a ship registered in Hong Kong anchored in the port of Singapore.

In this example, Hong Kong is the flag state and Singapore is the Port State.

Each member (flag state) is required to assign dedicated Port State officers. These officers will inspect the ships according to the international legislation, not the national one.

For instance, an inspector from flag state Hong Kong will examine a ship in Singapore according to the legislation of Hong Kong. So, the inspection will check for the minimum regulation of the conventions ratified by Singapore in addition to the regulations of Hong Kong.

The port state officer will look at all the conventions in play from the ILO and IMO, and won’t take the additional legislation in consideration. For example,if Hong Kong did not ratify one of the conventions, the port state officer will still look into the conventions, while the flag state inspector will not do the same.

That’s all for now. For more information on maritime, recruitment, or flag state services, contact us @ +65 66357605. Or drop a message: enquiry@nimbusmaritime.com