Cyprus is a major international shipping centre because the island offers considerable incentives. As a result, many international shipping companies are urged to establish their operations in Cyprus. In this article, I present the basic information concerning ship registration procedures in Cyprus. Generally, the Policy and procedures for ship registration intend to facilitate the achievement of safe, secure and efficient shipping.
Ships and vessels of any type or size, except for those listed below, may be registered in the Register of Cyprus Ships or the Special Book of Parallel Registration, given that they satisfy age-related and type-related requirements.
Ships and vessels that are NOT qualified for registration:
- At the time of the application for their registration, are banned on port State control by a country member of any one of the Memoranda of Understanding on port State control, from entering the ports of the Countries party to that memorandum or that have been disqualified by a State from entering its ports;
- Have been detained on port State control grounds on more than three times within two years period before the submission of application for registration by States of the Paris or the Tokyo or the Mediterranean Memoranda of Understanding on port State control or by the US Coast Guard;
- Have been constructed exclusively for the use on inland navigation or that are to be utilized exclusively on inland navigation, i.e. internal waters, rivers, inland waterways, canals, natural or artificial lakes, water reservoir or dams.
Types of Registration:
There are three types of ship registration: provisional, permanent and parallel registration.
A1. Provisional Registration:
Many ship owners choose the option of provisional registration because it will provide them with the necessary time frame to proceed with the administrative procedures for permanent registration. A local lawyer must pursue the application for registration of a ship under the Cyprus flag. Moreover, the Registrar of Ships accepts applications on behalf of companies under formation. Nonetheless, the company should be incorporated before the registration of the ship.
A vessel could be provisionally registered under the Cyprus flag in Limassol by the Registrar of Cyprus Ships, or at any diplomatic mission or consulate of the Republic of Cyprus abroad that will proceed in accordance with the instructions issued by the Registrar of Cyprus Ships. During the provisional registration under the Cyprus flag, the vessel must be at a port to be surveyed and certified on behalf of the Cyprus government. However, the presence of the ship at the port or place where the provisional registration will be held is not obligatory.
In case the provisional registration is held at a diplomatic mission or consulate of Cyprus abroad, some of the documents can be submitted there based on the Registrar’s written instructions. Following the receipt of the necessary documentation, the Registrar or the consular officer of the Republic of Cyprus may proceed with the provisional registration of the ship.
A2. Permanent Registration
The permanent registration of a provisionally registered ship must be completed within six months or nine months in case the three-month extension has been obtained, from the date on which the ship was provisionally registered. By the time all the required documentation are submitted and the administrative procedure is finalized the Registrar of Cyprus Ships will issue the ‘Certificate of Cyprus Registry’ and the ship will be permanently registered under the Cyprus flag.
A3. Parallel Registration
The Cyprus legislation provides two option of internationally recognized registration, ‘parallel-in’ and ‘parallel-out’ registration. These two alternatives provide some considerable incentives for leaseback, hire, purchase and financial arrangements. The parallel registration of ships under the Cyprus jurisdiction could be effected with more than 20 countries that have a compatible legislation with Cyprus.
‘Parallel-in registration permits a foreign flag ship on bareboat charter to a Cyprus shipping company to be registered in ‘parallel’ under the Cyprus flag for a period, usually two years. ‘Parallel-in’ registration can be renewed. Under ‘parallel-in’ registration, the deletion of the registration in the foreign registered is not obligatory. Nonetheless, the foreign nationality is suspended, and the foreign registry applies only according to the ownership and encumbrance status of the ship. The legislation of the foreign registry must permit the parallel registration of the ships registered in its register.
Ships registered parallel-in the Register of Cyprus Ships must fly the Cyprus flag and are not allowed to use the flag of the other country. The port of registry marked on the ship must be Limassol and not that of the foreign registry.
Mortgages are created exclusively by the ship owner, following the law of the country of the foreign register in which they shall be recorded. The constitution of these kinds of mortgages and other encumbrances is only notified to the Register of Cyprus Ships. Apart from issues related to transfer of ownership and mortgages and other encumbrances, all other issues related to ships registered parallel-in in the Register of Cyprus Ships are regulated by the Merchant Shipping.
Individuals or companies that would like to proceed to the creation of mortgages and transfer of ownership should seek a professional legal advice.
‘Parallel-out’ registration allows a Cyprus ship to be bareboat chartered to a foreign person or company and registered in the respective foreign register for the duration of the charter party. ‘Parallel-out’ registration permits the financing of a vessel and its mortgaging under the Cyprus flag and its registration in a foreign registry via a bareboat charter agreement. The parallel-out registration of a Cyprus ship only if the legislation of the foreign registry allows the parallel registration of ships of another registry. ‘Parallel-out’ registration is possible for Cyprus ships that are permanently or provisionally registered in the Registered of Cyprus Ships. The ‘parallel-out’ registration of a Cyprus ships should be approved by the Minister of Communications and Works.
Once the appropriate fees have been paid, and the necessary documentation has been submitted to the Registrar of Cyprus Ships, then the Minister of Communications and Works may approve the parallel-out registration of the ship for a period, not more than three years. Following the approval of the parallel-out registration, the Cypriot nationality of the ship is suspended, and the Cyprus Certificate of Registration should be deposited to the Registrar of Cyprus Ships.
Cyprus ships registered parallel-out must fly the flag of the foreign registry and cannot use the Cyprus flag. Moreover, the port of registry marked on the stern of the ship should be that of the foreign registry. Transfer of ownership and any issues related to mortgages on Cyprus vessels registered parallel-out are exclusively regulated by Cyprus legislation and no action related to these matters can be taken by the foreign registry.
Entries submitted in the Register of Cyprus Ships concerning transfer of ownership or mortgages on Cyprus ships registered parallel-out, are exclusively notified by the Registrar of Cyprus Ships to the foreign registry.
Proceed with Ship Registration:
Ship registration requires a collection of necessary documentation and appropriate legal guidance. As a result, individuals and companies should seek for proper legal advice and support.
Source by Michael Chambers