The flag of convenience and Maltese maritime law

Abstract

Various definitions of the term “Flags of Convenience” have been given. Colombos refers to such flags as a competitive device, “whereby some countri0s - chief amongst which are Panama, Honduras, Liberia and Costa Rica (sometimes referred to as “PANLIBHONCO”) allow the use of their flags by foreign shipping by a simple administrative formality, such as mere registration or the grant of a certificate of registry.” In a "Study on the Expansion of the Flags of Convenience Fleets and on various aspects thereof" compiled by the Maritime Transport Committee of the Organisation for European Economic Cooperation, the phenomenon in question is defined as “The flags of such countries as Panama, Liberia, Honduras and Costa Rica whose laws allow – and indeed make it easy for – ships owned by foreign nationals or companies to fly their flags… in contrast to the practice in the maritime countries (and in many others) where the right to fly the national flag is subject to stringent conditions and involves far-reaching obligations.” The “PANLIBHONCO” practice whose main purpose is the attraction of shipping to the particular country’s national register, thus enhancing prestige and economic development, seems to be a popular one, and recent years have witnessed the modification of administrative and fiscal legislation relating to shipping in a number of countries like Greece, Lebanon, Gibraltar, etc., in order to enable such countries to benefit from any advantages accruing to Flag of Convenience States ; the prospects of such a legal development are also being actively considered in Malta.