The Concept of Hybrid Ship Registration

The Concept of Hybrid Ship Registration

Under the international law of the sea, every vessel must be registered in a State and operate under that State’s flag. Registration of a vessel in a particular State is understood as the grant of that State’s nationality to the vessel, and the registering State is recognized as the flag State. In the international law of the sea, a ship is generally regarded as subject to the laws and regulations of its flag State and, in many circumstances, the flag State exercises legal authority and jurisdiction over the vessel.

The ship’s flag also reflects the responsibilities and obligations of the flag State toward the international community. Accordingly, where a vessel fails to comply with international rules or violates applicable maritime regulations, including in matters such as marine pollution or collisions, the flag State may be held responsible and may be required to respond.

Ship Registration Systems

Ship registration systems are commonly categorized as follows:

• Closed or national registration.
• Open or international registration (open registry).
• Hybrid registration.

Hybrid Registries

As commercial shipowners increasingly sought to register their vessels in open or international registries, States operating closed national registries took steps to maintain their position in the international maritime transport market.

Many of these States introduced reforms designed to make their registration systems more attractive and competitive.

Hybrid registries offer shipowners a combined set of features from both national and open or international registries, with the aim of encouraging registration. In the same way that open registries emerged in response to perceived inefficiencies in national registries, hybrid registries developed to address the disadvantages and risks associated with open or international registries. Their objective is to enhance attractiveness while reducing exposure to greater risks.

Typical characteristics of hybrid registration systems include easier access and lower entry costs than many traditional national registries.

These registries often seek to preserve a link of nationality between the beneficial owner or the vessel’s management and the flag State.

In general terms, hybrid registries aim to provide financial incentives and commercial advantages comparable to those offered by open registries, while maintaining a genuine link.

Hybrid registries may be classified into two forms, depending on whether they more closely resemble a national or an open model. Key categories include secondary, offshore, international, and registries operating under free association arrangements.

Characteristics of Hybrid Registries

In general, the distinctive features of hybrid registration may be identified as follows:

• Nationality and the Preservation of a National Link: Many hybrid registries are intended primarily for domestic shipowners, enabling them to fly the flag of their State while remaining competitive with open registry systems. During the 1970s, former British territories such as Bermuda, the Cayman Islands, and Gibraltar operated as secondary registries linked to the United Kingdom. They could fly the Red Ensign under the rights and obligations of the United Kingdom’s merchant shipping framework, while paying relatively modest fees. This approach offered notable advantages to shipowners. Where management and control remain in the hands of traditional maritime nations, the flag’s good reputation often places the vessel in a more favorable position regarding inspections and port health control measures. Other traditional maritime States also developed international registration arrangements in former colonies or associated territories. France established international registry arrangements in the Kerguelen Islands, in Portugal (Madeira), in Spain (the Canary Islands), and in the Netherlands (the Antilles). The Marshall Islands also operates under a Compact of Free Association with the United States. Where the connection to the national flag is preserved, the jurisdiction of the relevant State over vessels owned by its nationals may also be maintained. This can offer regulatory, financial, and security advantages for the flag State. In certain cases, it may reduce or eliminate the need for subsidies and other forms of financial support for maritime transport, which have long been a feature of maritime policy in developed countries. At the same time, some hybrid registry systems allow foreign shipowners to access registration services, provided they comply with specified technical standards.
• Agreements Relating to Nationality and Crew Wages: Another significant feature of many hybrid registries is that the employment of foreign crew members is generally permitted. The Norwegian International Ship Register, the Danish International Ship Register, and the Madeira registry have accepted that adherence to domestic union wage agreements may be optional. In practice, compliance with the jurisdiction of registration’s labor laws is not always mandatory. This may leave open the question of whether wage arrangements acceptable to domestic labor unions must be adopted. As can be seen, States offering hybrid registry services seek, on the one hand, to preserve the relationship between the vessel and the registering State as a genuine link, while on the other hand, adapting to commercial realities of maritime trade, including competitiveness. This has contributed to shifts away from traditional approaches associated with strictly national registries and has increased shipowners’ interest in the services offered by hybrid registry jurisdictions.

Frequently Asked Questions About Hybrid Ship Registration