Maltese register goes international

THE criteria governing who can own a Maltese registered vessel has recently changed. The changes were effected by Legal Notice 2003, entitled Merchant Shipping (Ships Eligible for Registration) Regulations 2003, which was published on February 25 this year. The legal notice, which contains the amendments, was the first task of the newly constituted Malta Maritime Legislative Advisory Council, a body composed of members of the Malta Maritime Authority, the Attorney General’s office, the Ministry of Transport and the Malta Maritime Law Association.

The scope of the council is to assist the government in proposing and drafting amendments and updates to existing shipping legislation as well as proposing and drafting new shipping laws. Its aim is to bring together representatives from different sectors of the industry whose views should be taken into account when contemplating new or amending existing shipping legislation.

Up until February 25, only Maltese persons were entitled to register vessels under the Malta flag. In this respect, ‘Maltese persons’ refers to both physical and corporate persons. Over the years, however, developments in the shipping industry have generated a growing interest in the possibility of widening the parameters of ownership to allow persons from other nationalities to own Maltese registered vessels.

As the fifth largest flag in the world and an international centre for maritime services, it is crucial for Malta to respond and remain au courant with the developments and needs of the shipping industry. All of this, together with Malta’s membership of the European Union, where it is not possible to discriminate between nationals of different member states, encouraged the authorities to revisit the criteria of ownership. The task at hand was to achieve the latter whilst maintaining an effective element of control over the owning entity.

The new criteria provide a regime whereby a foreign corporate body or entity, referred to as an international owner, is now qualified to own a Maltese vessel or share therein. The law provides that the Registrar General must be satisfied that such an owner can and will ensure due observance of the laws of Malta. It is expected that the Registrar General will now issue guidelines on the amount, nature and extent of legal corporate documentation which the foreign company must provide to the Registrar to allow the international owner to be eligible to register a ship in Malta.

This amendment will, generally speaking, allow, for example, a German registered company, referred to as an international owner, to own a Maltese registered vessel. However, for such an international owner to make use of such a facility he must appoint a resident agent who is habitually resident in Malta, and who, amongst other things, has satisfied the Registrar General to be a person capable of carrying out the functions stated in the regulations.

It will be the duty of such a resident agent to act as a channel of communication between the international owner and the Maltese government departments and authorities, to sign and file with the Maltese government departments and authorities all the necessary forms and declarations on behalf of the international owner, and to act as the judicial representative of the international owner for judicial proceedings in Malta. To ensure the avoidance of potential problems relating to the service of documents, any official notice sent to the resident agent at his last registered address shall be deemed to have been duly received by and notified to the international owner.

The law has also kept very firmly in mind the potential rights of third parties vis-à-vis such owners of Maltese registered vessels and specifically provides that such an international owner, in whose name a ship is registered in Malta, shall be deemed to have submitted to the jurisdiction of the Maltese courts for any action in connection with the ship while it is or was so registered under the Malta flag.

It is expected that these amendments will bring to Malta those international shipowners who, up until now, did not consider registering their vessels under the Maltese flag because they needed to retain their national identity. The amendments also ensure that the international owner is fully answerable to the authorities through his resident agent.