Registration of Ships: How is the Transfer of Ships Between EU Registers Working?

While the European Commission contemplated the creation of an EU register (the so-called “EUROS” proposal), the regime remains (and is likely to remain) one characterised by Member States having their own national registers (whether one national registry or a national registry with a parallel one) rather than there being an EU register.

A central core value of the EU is that there must be, as a general rule (to which there are very few and narrow exceptions), free movement within the EU’s internal market. It follows that there ought to be freedom to move ships between the registers operated by Member States. It has not always been as easy as one would imagine to transfer vessels between national registers.

Regulation 789/2004 was adopted so as to facilitate the transfer of vessels between the shipping registers within the EU (OJ 2004 L138/19, 30.4.2004). The transfer of vessels between registers is also dealt with in a number of International Maritime Organisation (“IMO”) conventions and instruments. Within the EU, Regulation 789/2004 is the key instrument.

Regulation 789/2004 seeks to eliminate technical barriers to the transfer of vessels flying the flag of an EU Member State between the registers of those Member States while simultaneously seeking to ensure a high level of ship safety and environmental protection. It applies to both national and secondary registers. The essence of Regulation 789/2004 is that, under Article 4 of the Regulation, a Member State may generally not withhold from registration a vessel which is registered in another Member State which complies with the "requirements" of, and carries valid certificates and equipment approved or type-approved in accordance with, Directive 96/98 of 20 December 1996 on marine equipment.

The European Commission has an admirable tradition of having reflective and retrospective reports prepared on the success (or otherwise) of various EU measures. A report was thus commissioned on the success (or otherwise) of Regulation 789/2004.  On 8 May 2015, the European Commission adopted a report on the operation of Regulation 789/2004 on the transfer of cargo and passenger ships between registers in the Community. The Report should be read in conjunction with a very interesting Staff Working Document which provides statistical background information. The Report found that there were no particular problems arising during the under review (i.e., 2006-12). This is an important finding because the period under review was long and there were a significant number of transfers between registers as well during that timeframe so it was a good base period on which to conduct a study. Therefore, it would appear, at least according to the European Commission’s report that Regulation 789/2004 has worked well to date.

For further information: contact Dr Vincent Power (vpower@algoodbody.com) or any member of A&L Goodbody’s EU, Competition & Procurement or Shipping Law teams.