Flag state surcharges called into question

Oct 12 2018


Concern has been expressed over the alleged practice of certain flag states adding surcharges when issuing class documents and statutory certificates.

International Registries and its affiliates (IRI) has stressed that the Republic of the Marshall Islands (RMI) Registry will not follow competitors by levying surcharges and commissions on vessel documents and certificates issued on its behalf by the classification societies.

The RMI Registry will continue to provide its clients with a transparent pricing structure for the issuance of key certificates needed by shipowners, it said.

Bill Gallagher, President of IRI, which provides administrative and technical support to the RMI Registry, said: "Over the past days, we have had discussions with several of the major classification societies concerning flag state surcharges on the issuance of class documents and statutory certificates.

“Through these discussions, we have learned that Liberia has now joined Panama, Belize, and Honduras in the practice of adding a flag state surcharge to the class fees for such certificates.

"We affirm to our shipowners, shipoperators, and Recognised Organisations that the Republic of the Marshall Islands Registry has no intention of following suit. In the very competitive world of ship registration, the terminology ‘free’ is used loosely. 

“We are determined to remain transparent. Owners can rest assured they will only be responsible for agreed and published fees with no back door or hidden surcharges," he asserted.

Answering the criticism, Scott Bergeron, CEO of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, said, “As shipping moves rapidly into the data era with electronic record-keeping and data exchange, it is incumbent on leading flag administrations to increase their capacity and capability and not cede these elements completely to the classification societies.

“Liberia is implementing a robust electronic platform to provide real-time access to data on all certificates and surveys issued by and on behalf of the flag. Our commitment to operating completely electronic and paperless is well underway, but now we need to address and implement sustainable control of data exchange to protect the interests of the registry, as well as those of the shipowners and financiers who rely on it.

“To support this, the Liberian Maritime Authority has requested that Recognised Organisations implement a Data Exchange Fee as part of their statutory certification process.

“Unfortunately, most flags are not investing in technology or in their own intellectual capacity and are consequently delegating increasingly complex regulatory oversight solely to classification societies and Recognised Organisations.

“The Liberian Registry has pioneered several added-value services in the last decade, including enhanced 24/7 responsiveness, electronic certificates, detention prevention programmes, and on-the-ground intervention with major port states. Moreover, we offer services at very competitive prices compared to the high cost hidden in inspection fees introduced by other flags and class societies.

“Unlike the Marshall Islands, the Liberian Registry has leveraged the country’s extensive diplomatic channels to deliver preferential fees in major port countries such as China, a significant value enhancement for shipowners seeking competitive charter hires.

“We strive to avoid a downgrade of flag stage image by criticising others. Instead, we prefer to lead by further investing in service enhancements, bringing down costs, and leveraging diplomatic channels with major port states. We are proud that, over time, many of our initiatives have been adopted by other reputable flag states.

“Liberia is committed to ensuring that its ship registry remains highly efficient, user-friendly, and fit for purpose in the 21st century. The introduction of the data exchange fee reflects changes to the way in which ship registration is conducted and therefore designed to enable shipowners and operators to keep their vessels moving efficiently, safely and on time in today’s highly competitive industry.

“Moreover, the real-time data platform will strengthen the registry’s ability to rapidly intervene on behalf of shipowners at major port states with its global network of professionals,” Bergeron concluded.

 



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