Standard Issues A
ONBOARD Magazine looks at ensigns flying from the sterns of superyachts and asks: What is the difference for the owner, yacht and crew? Words: Michael Howorth
ny superyacht, regardless of her geographical location, is subject to the control and jurisdiction of the state in which she is registered. So, it behoves the owner of that
yacht to choose the flag under which his or her yacht is registered with care.
This is because on the high seas, beyond the control or jurisdiction of any particular country, the yacht is still bound by the laws of her country of registration.
As she moves from one country to another she leaves and enters the control and jurisdiction of various countries’ legal systems. Coastal states exercise jurisdiction over a sea area adjacent to their coast to a maximum of 12 nautical miles, with a limited jurisdiction extending to 24 miles. Owners/operators and individual crew members are always also subject to the laws of their national state, regardless of the nationality of their ship or its location.
FLAG STATE – NATIONALITY OF A VESSEL The nationality of a vessel is important because it controls which country has the right to prescribe and enforce laws governing the operation of that vessel. A ship must sail under the flag of one state only. The most common method by which a
yacht is granted the nationality of a state is by formal registration with that state. Upon registration the she acquires rights and duties as a result of registration and these vary depending upon the state and the conventions and treaties to which that state is party.
The rights will normally include action in an international court if there is violation of international law against the vessel by another state and representation at international conferences and organisations. The duties include the upholding of the law of the flag state aboard the vessel wherever she may be in the world.
Quality flags will also provide a recognised reputation for excellence
helping the
vessel to avoid lengthy Port State Control inspections in foreign ports, worldwide support from embassies and consuls of the state and protection by the navy of the state. Each state sets its own conditions for the allocation of nationality to a ship, but generally there is an international requirement for a genuine link between the flag state and the vessel concerned.
Legislation that governs how a yacht is operated is dictated by the Flag under which she sails. The choice of what flag a
yacht will fly is in turn governed by many differing factors and owners will choose flags as best suit their own particular requirements.
CREDENCE Dr Clayton Fenech is a Director at Credence in Malta, a specialist corporation born out of a strategic alliance between two commercial law firms and an accountancy services firm. The firm was conceived to create an accessible team of experts to advise on the increasingly sophisticated structures offered to superyacht owners by Maltese financial services legislation.
Clayton specialises in superyacht law and regularly advises owners and prospective owners on the financing, acquisition and structuring of the ownership of their prized assets. He says, “Typically the choice of flag depends on a number of considerations, not least the intended registration status and operation of the yacht whether it be private or commercial.” Then he adds, “You must take into account the intended base port and main cruising areas the yacht will enjoy. The nationality of the owner is another consideration. Are they or could they become ‘established’ in the EU, be it through either first or second citizenship or by taking up permanent residence?” Clayton
58 | AUTUMN 2020 | ONBOARD
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