Marshall Islands: Offshore Business Sectors

The Marshall Islands Maritime Registry

Following the fourth quarter of 2005, the Marshall Islands Registry had reached its year-end goal of more than 31 million gross tons and over 1,100 registered vessels. In less than five years, the Marshall Islands Registry had more than doubled its fleet size from 18.5 million gross tons and 626 vessels at the end of 2003. By November 2010, the Registry had a fleet size of 2,331 vessels with 64.3 million gross tons.

The Marshall Islands is ranked third on the list of the world’s top ten open registries in terms of quality and tonnage. While the largest share of the Registry’s tonnage is from the United States, Greece, Germany and Norway, markets in Italy, Turkey, Japan and other areas in Asia have been opening up.

The Registry has more than 20 offices including Hong Kong, Singapore, Dubai, Germany, Turkey and the UK.

A total of 21 Marshall Islands shipping corporations are now publicly traded on the New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotations (NASDAQ), with more to follow.

The Registry has an excellent Port State Control record with all the major MOUs. Recently the Registry was recognized by P.D. Thorne, Commander, US Coast Guard, who indicated that the Marshall Islands had a superior 2004 Port State Control record including over 270 distinct arrivals without a single safety or environmental IMO detention.”

IRI's Maritime Operations Department in Reston, New York and London is certified as a quality management system under ISO 9001:2000 by BSI Quality Registrar, under the American National Standards Institute - American Society for Quality, and the Dutch Council for Accreditation. This quality certification encompasses the management of the operational and administrative functions of the ship registry program.

IRI's Maritime Operations Department has the following sections:

VESSEL REGISTRATION AND MORTGAGE RECORDATION

This section provides vessel owners, operators, charterers, lending institutions and their representatives with information needed to register vessels in the Marshall Islands and to record ship mortgages and related instruments under Marshall Islands laws. Services include the issuance of provisional certificates of registry; renewals to bareboat charter certificates of registry; and non-navigation provisional certificates of registry for vessels in long-term, laid-up status.

VESSEL DOCUMENTATION

Responsible for the issuance of certificates of permission for sale and transfer of vessels and cancellation of registry; Certificates of Civil Liability for Oil Pollution Damage; and Certificates of Ownership and Encumbrance. Receives records, files, and processes tonnage tax receipts, invoices, mortgage paperwork, etc.

MARINE SAFETY

Coordinates the vessel safety inspection program, reviews and verifies that shipowners have submitted applicable national and international maritime documents and vets vessels and ship managers entering the registry. Promulgates Marine Safety Advisories to supplement the Marine Notices.

SEAFARERS' DOCUMENTATION

Responsible for maintaining seafarer training, certification and documentation standards in compliance with applicable IMO, ILO and National Flag State examination requirements for sea service; reviewing and issuing officer certificates to qualified deck, engineer and radio officers; issuing seafarers' identification and record books and special qualification certificates; administration and monitoring of the examination system for officers and unlicensed ratings; and issuing Minimum Safe Manning Certificates.

OFFICER AND SEAFARER LICENSE VERIFICATION SYSTEM

As a service to the international maritime industry in verifying the validity of licenses, certificates and record books issued by the Republic of the Marshall Islands, IRI offers the following searchable databases:

Officer Certificate (License) Verification
Seafarers Identification and Record Book Verification
Special Qualification Certificate Verification
In addition, a listing of Marshall Islands Seafarers' Documents known to be Fraudulent may also be searched.

TECHNICAL SUPPORT

Monitors and ensures the implementation of the applicable national maritime laws and that the IMO codes and conventions are carried out to the fullest extent practicable on Marshall Islands vessels. Issuance of technical dispensation, exemption, equivalency and survey certificates; multiple load line assignment books; technical interpretation of regulations and support on vessel detentions; liaison with classification societies, promulgation of marine notices and technical circulars, and other technical matters.

VESSEL RADIO STATION LICENSING

All vessel radio transmitting stations are required to have a license. When a vessel is initially registered it is issued a Temporary Authority for a Ship Radio Station, valid for 90 days. During this period, the vessel’s representative must submit an Application for Ship Radio Station License (MI-104) listing information necessary for a full-term license.

INVESTIGATIONS

Initiates, completes and documents investigations, distributes major casualty and pollution incidents investigation reports to the International Maritime Organization, Port States and other interested parties; distributes determinations after investigating contraventions of SOLAS, MARPOL, and COLREGS, and monitors developments in national and international maritime law or conventions that could impact maritime investigatory functions.

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The Registration Process

Types of vessels that may be registered under the Marshall Islands flag include: tankers, cargo ships, containerships, passenger ships, MODUs, tugs, yachts, fishing vessels and other ocean-going vessels.

Vessels should be under 20 years of age at time of registration. A waiver of the age requirement may be granted depending upon a satisfactory evaluation of the condition, seaworthiness and usage of the vessel.

Ownership must be in the name of a Marshall Islands national, corporation, limited or general partnership, limited liability company or foreign maritime entity qualified in the Marshall Islands.

All commercial vessels are required to be classed by a Classification Society that is recognized by the Maritime Administrator (some exceptions may be made for yachts and fishing vessels; contact IRI for specifics). The following are currently recognized:

American Bureau of Shipping (ABS)
Bureau Veritas (BV)
China Classification Society (CCS)
Det Norske Veritas (DNV)
Germanischer Lloyd (GL)
Korean Register of Shipping (KRS)
Lloyd's Register of Shipping (LR)
Nippon Kaiji Kyokai (NKK)
Registro Italiano Navale (RINA)
Russian Maritime Register of Shipping (RS)

The following documentation is required for vessel registration:

• Application for Official Number, Call Sign, and Registration of Vessel;
• Bill of Sale or Builder's Certificate transferring title to applicant (3 copies are sufficient);
• Power of Attorney or Secretary's Certificate of Corporate Resolution;
• Certificate of Confirmation of Class issued by Classification Society dated no earlier than 10 days prior to registration;
• Classification Society Statement or Affidavit that the vessel is "fit to proceed to sea";
• Special Survey on vessels 15 years or older from the Classification Society;
• Application for Minimum Safe Manning Certificate (This is submitted to the Seafarers' Identification and Certification Division prior to registration.);
• ISM Code Declaration of Company and Designated Person;
• Proof of Liability Insurance, including owner's repatriation obligations;
• Permission to Transfer or Cancellation Certificate issued by the registry from which the vessel is being transferred;
• Proof that vessel is free of recorded liens and encumbrances;
• Within 90 days of registration, an Application for Ship Radio Station License must be submitted.

If the name of the vessel is to be changed at the time of reflagging to the Marshall Islands, then all applications should be filed using the new name of the vessel, and should also list the vessel's former name in the space provided.

The Marshall Islands Maritime Act incorporates provisions for the recordation of security-related instruments and documents of title. Recordation gives notice to creditors, purchasers, suppliers and other parties with an interest in such transactions, and furnishes an internationally enforceable structure for the protection of those legal rights recorded with respect to a vessel of the Republic of the Marshall Islands. Preferred status, accorded to a mortgage under the Act, gives priority to the lender's mortgage lien over those of certain other claimants.

A Marshall Islands preferred mortgage may secure sale and lease transactions, contingent and future obligations; the Japanese ne-teito type of "floating mortgage" facility; advances and repayments; guarantees; and multiple types of collateralization incidental to the diversified ownership of more than one vessel.

Due to ground-breaking amendments passed on March 10, 2000 by the Marshall Islands legislature, owners have an option to "tack on" a previously recorded mortgage. To continue the preferred status of a previously recorded foreign mortgage, owners may submit the recorded foreign mortgage and a simple (signed) mortgage instrument which will be recorded when the vessel is registered in the Marshall Islands. This mortgage instrument will change the governing law of the mortgage to reflect the Marshall Islands as the law governing the mortgage.

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