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The existing crisis in the Strait of Hormuz has place a spotlight on the murky planet of international shipping, exactly where shipowners can register and re-register their vessels inside minutes, turning their crews into pawns in a game of diplomatic chess.

“If you have got a credit card, and you have got 15 minutes, you can re-register your ship below any flag you want,” stated Michael Roe, a professor of maritime and logistics policy at the University of Plymouth.

Beneath marine laws, every single merchant ship has to be registered with a single nation. Even though the UN Convention on the Higher Seas says a vessel ought to have “a genuine” hyperlink with its flag state, existing guidelines enable ships to sail below just about any flag regardless of their ownership, as extended as they spend the registration charge. This is identified in the shipping market as a “flag of comfort.”

That roughly 40% of the worldwide fleet is registered in Panama, Liberia and the Marshall Islands — 3 nations that with each other personal just 169 ships — shows how prevalent the practice is.

“Devoid of getting also insulting, these are entirely irrelevant nations when it comes to shipping, except they’ve got low-priced flags with low requirements of regulation,” Roe stated.

The crew of the UK-flagged tanker Stena Impero got caught up in the middle of a diplomatic spat.

Registration choices are largely driven by industrial factors.

“One particular way to lessen expenses is to decide on a flag like Mongolia,” Roe stated. “It really is got no coast, no ports, no actual direct relevance to shipping, but it presents a flag that is low-priced and low requirements, consequently it is excellent for shipowners.”

According to the United Nations Conference on Trade and Improvement, 265 vessels with a total cargo capacity of 664 million tons are sailing below the Mongolian flag.

It operates the other way also. Greece, a shipping superpower that owns the biggest fleet in the planet, is sailing most of its ships below a foreign flag, since shipowners want to steer clear of Greece’s higher tax prices.

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Possessing a massive flag is prestigious, but also profitable, which is why nations compete fiercely for ships to register with them.

“It really is really prevalent for shipping corporations to shop about for a flag which suits them,” stated Richard Coles, senior study fellow at the Institute of Maritime Law at the University of Southampton.

Coles, a extended-time shipping lawyer, stated the term “flag of comfort” is regarded somewhat derogatory in the shipping market, since below international conventions, every single ship has to comply with prevalent security, environmental and labor law requirements, regardless of its flag.

“Now right here is the rub,” Coles stated. “A British-flagged vessel or an American-flagged, these are flag states that rigorously enforce their security guidelines, whereas if you have a compact Caribbean island which does not have a massive civil service and the indicates of enforcing the guidelines, naturally, the requirements are not most likely to be as excellent,” he stated.

But the flag selection can have a big influence on crews. Stena Impero, the Swedish-owned tanker that was seized in Iran final week, was just about absolutely targeted since if was flying the British flag.

Iran captured the vessel as a tit-for-tat just after its personal tanker was detained in Gibraltar since it was carrying Iranian oil to Syria in breach of EU sanctions.
The crew aboard Stena Impero comes from India, the Philippines, Russia and Latvia, nations that are largely not involved in the existing spat involving the Iranians and the West.

It really is a pretty standard makeup: India, Russia and the Philippines are amongst the major 5 nations with the highest numbers of seafarers.

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David Heindel, the chair of the seafarers section at the International Transport Workers’ Federation (ITWF), stated the danger crews are facing in the Strait of Hormuz is “entirely unacceptable.”

The ITWF has been campaigning against flags of comfort for decades, saying the practice puts crews at danger of exploitation.

“On flag of comfort vessels non-national seafarers merely never have the identical rights that national seafarers would have if they had been employed,” he stated.

When a ship registers with a nation, it assumes its nationality and becomes governed by that state’s laws. In return, the nation is theoretically accountable for the vessel and its crew regardless of their nationalities.

But Heindel stated seafarers from time to time uncover it hard to get assist from their vessel’s flag state if they are not its citizens. That is specifically correct when the flag belongs to a creating nation with small diplomatic energy and no actual labor protections.

At the identical time, Heindel stated, the diplomatic missions of the seafarers’ personal nations could not be capable to assist either. It could be their citizens who are involved, but they have no energy more than the vessels.

To make the matters even extra difficult, ships are permitted to switch flags and re-register as they please, even mid-journey.

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In a conflict predicament, safety becomes a concern and re-flagging could give respite.

“For instance, in the course of the 1st Gulf War, really a handful of [Kuwaiti] vessels had been re-flagged below the UK flag and some had been re-flagged below the United States flag in order to acquire protection of the these nations,” Coles stated.

Insurance coverage can play a part also. Lloyd’s List, a shipping news journal, reported final week that the war danger insurance coverage expenses for British-flagged ships have gone up by tens of thousands of dollars per trip considering that the Stena Impero capture, providing owners incentive to ditch the UK flag.

The British-flagged tanker Stena Impero and its 23 crew members were seized by Iran.

According to the spokesperson of Stena Bulk, Stena Impero’s owner, the British and Swedish governments are major the diplomatic efforts to have the ship and the crew released, maintaining the Russian, Latvian, Philippine and Indian embassies informed.

Erik Hanell, Stena Bulk’s CEO, stated he would not speculate on whether or not the ship’s flag played a part in the seizure.

He stated that although Stena Bulk is Swedish-owned, the organization operates “all more than the globe” and has “a massive presence in Britain.”

“There can be a lot of factors why you have a different flag,” he added.

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