THE Liberian government has been tidying up its maritime and corporate laws. Just passed, but not yet published, is a whole bundle of amendments. On the maritime side, the changes in the law and in regulations implement international requirements into national law, reflect the independent status of the Bureau of Maritime Affairs - both matters which in practice have already happened – and provide the facility for the registry to introduce new services in relation to ship registration and the recording of mortgages.
The amendments exploit changes in technology permitting registration of a ship and recording of mortgages to be made remotely, and, for the record - in the legislation referred to as the index - to be maintained and reproduced electronically. The status of Liberia as the location of the index, and of any documents registered under the maritime law, is underlined, while permitting duplicate indices to be maintained in other locations.
Of real significance to both shipowners and banks granting mortgages are the provisions for the recording of mortgages other than in the location at which the index is physically kept - New York. This will eventually allow mortgages to be recorded in real time anywhere in the world.
In parallel with the changes to maritime law, the legislature has approved the Electronic Transactions Law. This legislation contains the detailed provisions which establish the status of electronic communications, records, contracts made electronically, the integrity of documents and reproductions and the security of signatures.
In relation to international business, the Liberian government has recognised the importance of complying with the standards of the model UN document on electronic transactions combined with selection of the most secure method of authenticating electronic signatures.
Other amendments to the maritime law provide for:
Clarification of the noting of mortgage in relation to ships bareboat-chartered into Liberia and the status of the preferred mortgage recorded in respect of a vessel which bareboat-registers out of Liberia.
Spelling-out of the circumstances in which corrections to entries in the index or in documents registered in respect of the mortgage may be made.
Expansion of the form and the nature of charge or interest that may be given the status of a preferred mortgage.
Specification of when a vessel may be de-registered, notwithstanding that a preferred mortgage is still in effect.
Introduction of the possibility of recording a mortgage on a vessel under construction.
Asset protection is one of the principal motives for the use of Liberian corporate structures. The Liberian legislature has enacted legislation with this in mind. Amendments to the Business Corporation Act will give greater flexibility, reduce some formalities, allow re-domiciliation and conversion from and to other legal entities, and generally bring the Act up to date with the US law on which it is based.
Importantly, the amendments do not touch the bearer share provisions, and there are no plans for them to do so or to change non-resident tax status.
A new law contains tough measures based on UN convention requirements on due diligence in the provision of financial services, co-operation with law enforcement agencies in pursuit of the proceeds of serious crime which is being prosecuted, and the opportunity to give effect to international bilateral agreements between Liberia and other countries for this purpose.
Liberia has also moved to protect contracts, particularly mortgages, which are expressed in any European currencies which have been replaced by the euro. A simple piece of law confirms the continuing effect of the contract and substitutes the euro for the original currency. Without this measure, the enforceability of many multi-million-dollar transactions would have been in jeopardy.