Cruise Ship Registry, Flag State Control, Flag of Convenience

Cruise ship registry and flags, what is flag-state (control & responsibilities), flags of convenience - all of these are the subject of the following survey. We offer you a list of smaller and really big cruise ships sailing under foreign flags and some info about cruise ship registration by cruise line company (current operator for chartered ships).

What is "Flag State" (definition)

"Flag State" is the ship's registration country under whose laws it is registered/licensed. Just like any marine vessel, a passenger ship operates under its flag state laws (also used if the ship is involved in an admiralty case). Flag states have the authority and responsibility for a ship, exercising control over the ships. They inspect the ships regularly, certify equipment and crew, issue safety and pollution related documents, etc.

Each of the flag states has its own ship register where all ships sailing under its flag need to be registered. Some countries even have more than one ship register.

What is "Flag State Control" (definition)

The cruise ship's flag state controls the vessel and its crew - an absolute authority. Ships have to comply with all the flag state's maritime rules and regulations, which are, of course in accordance with the international maritime rules and regulations by the IMO (International Maritime Organisation). The flag state has the absolute authority over the ship, for not complying with the norms the flag state can impose penalties on the ship and crew. Flag states are required to carry out regular inspections, to ensure safe and secure shipping of passengers and goods, to send detailed inspection reports to the IMO. The IMO has 167 Governments as members.

For cruise ships registered in USA - the USCG (US Coast Guard), search and rescue operations. "The Officer in Charge Marine Inspections" - for the inspection of all US flagged cruise ships (and other marine vessels) relating to construction / equipment / manning, casualties / accidents and for investigations of cases of misconduct/negligence/incompetence of officers and crew.

For cruise ships registered in the UK - the MCA (Maritime and Coastguard Agency) is the flag state control executive agency responsible for the implementation of the GB's and the International maritime law and policies. It operates through the UK's HMCG (Her Majesty's Coastguard) - safety control, coastal water monitoring and testing, issues licenses to officers/crew, monitoring of the UK's AIS network (real-time ship tracking).

What is "flag of convenience" (definition)

"Flag of Convenience" is called the flag state of a merchant ship when registered in a state different from that of its owners. More than half of all merchant ships in the world are registered under flags of convenience, and according to the latest statistics - around 90% of all commercial marine vessels calling on US ports are under foreign flags. There's only one big sea cruise ship registered in USA - ms Pride of America, and the sole reason for that is she sails in Hawaii exclusively, the whole year round.

As the market always determines the prices, often choosing a flag state means minimizing costs to maximize the revenue. And for a cruise ship owner, making a choice between using of the fiscal advantages of registering ships in open registry (under "Flag of Convenience") and registration in a national/close registry means making a choice between good business and not so good business.

In 1922, W. Averell Harriman (American politician/businessman/diplomat) registered two of his American-owned ships under the Panamanian flag, the main reason being to avoid Prohibition. In 1948, E. Stettinius (former Secretary of State under Roosevelt) founded the Liberian ship registry, later followed by Bahamas and Bermuda, Malta and Portugal. Some countries (like Italy & Holland/Netherlands) have cruise ships registered in their national registries.

World's most popular cruise ships flags of convenience

1. The list of Bahamas-registered cruise ships include some of the largest passenger ships in the world from the fleets of RCCL, NCL and Carnival.
2. Under the Panamanian flag operate 2 major cruise ship companies - Carnival (CCL started the "Panama flag state" cruising experience with the Mardi Gras ship in 1972) and MSC Cruises (brand of the Mediterranean Shipping Company, one of the world's largest container shipping lines).
3. Bermudian Flag of Convenience & Cruise Weddings. Bermuda is offering its offshore registry for UK-owned ships since 1974. First the P&O Cruises line changed its cruise ships' flags from London to Hamilton. Most of the Bermuda-flagged cruise ships today are from the fleets of Princess, P&O and Cunard. And the main reason for that is the Bermudian flag of convenience allows captains to perform onboard weddings (the Bermudian flag is of course British, but the Bermuda's registry has different legislation).
4. Under the Italian flag are Costa and AIDA.
5. Under the flag of Malta are 4 RCCL brands (Celebrity, Azamara, Pullmantur and TUI). In Malta are also registered the ships of Louis Cruises transferred away from the expensive flag of Greece.
6. Under the royal flag of The Netherlands/Holland are all Holland America ships (a Carnival brand).
7. Madeira is the offshore registry of Portugal, registered in Portugal ships are from the fleets of Classic International and Iberocruceros (Carnival's brand).
8. There are no cruise ships registered in Liberia today. For many years, Carnival, RCCL and Celebrity operated under the Liberian flag, but the dictator Charles Taylor changed all that. Under the Liberian flag of convenience today sail many cargo ships, though.
9. CCL is now the only major brand to split its ships between two flags of convenience, while the others stick to one.

Cruise ship flags of convenience vs national flag

The flag of convenience helps ship owners to evade their home nation's "inconvenient" rules/regulations, and often for reasons that are not so good. The negative impact is solely on the crew/staff who works on such ships.

1. Lower standards of working conditions due to lesser regulations. Crew on such ships often work under stress, or under dangerous conditions, and often without compensation.
2. Crew is deprived from basic rights, such as the right to form/join trade unions, and the right to demand proper pay/working conditions.
3. A ship under flag of convenience is under its flag state's jurisdiction, but ship records and other documents can be easily manipulated in cases of illegal trade (like smuggling, for example). Crew members could be charged for a criminal activity they were not even a part of.
4. Generally, ships sailing under flag of convenience offer lower salaries or pay crew/staff later then required.
5. Insufficient or no compensation in cases of onboard accidents. Such ships have the right to refuse to pay compensation to a crew member and/or his/her family.
6. Busy work schedule without the necessary rest time between assignments (compared to the standard).
7. Uncertainty/stress - working on a flag of convenience ship can endanger your career, resulting in sickness, physical and mental impairments, and even bad work record if you decide to seek justice.

Open registry /flag of convenience states today account for more than 55% of the world's shipping.

Flag of convenience list of countries with open registry

Currently, 27 countries have been declared "Flag of Convenience" states by ITF Global (International Transport Workers' Federation). Founded in 1896, the ITF currently represents a combined membership of around 5 mill workers from 148 countries. ITF (headquartered in London, UK) runs an international campaign against these countries through its "Fair Practices Committee" (seafarers' & dockers' unions).

ITF's list of "bad guys" (flag of convenience countries) includes:

• Antigua and Barbuda, Aruba
• Bahamas, Barbados, Belize, Bermuda
• Cambodia, Canary Islands, Cayman Islands, Cook Islands, Cyprus
• GIS (German International Ship Register), Gibraltar
• Honduras
• Lebanon, Liberia, Luxembourg
• Malta, Marshall Islands, Mauritius, Myanmar
• Netherlands/Dutch Antilles
• Panama
• St Vincent, Sri Lanka
• Tuvalu (Ellice Islands, Polynesia)
• Vanuatu (South Pacific).

As a rule, cruise ships under flag of convenience have multinational crew, and are owned by large multinational companies.

What is the difference between closed and open registries?

"Open Registries" are organizations that will register foreign-owned ships. One of the first open registries are the Liberian and Panamanian registries, followed by the Bahamian and Bermudian, and more recently - those of Malta and Portugal.

"Closed (national) Registries" require that a cruise ship be owned and constructed by national interests and to be fully or partially crewed by its citizens. This usually increases the ship's construction and operating costs. Italy and the Netherlands are two of the national registries featuring big cruise ships owned by some of the world's biggest cruise companies, like Holland America, Costa and AIDA.

Flag states list of the largest ship registries in the world

Note: These are flag states serving all types of ships (official data 2011).

1. PANAMA (22,6 %)
2. LIBERIA (11 %)
3. MARSHALL ISLANDS (6%)
4. HONG KONG (5,8%)
5. GREECE (5,3%)
6. THE BAHAMAS (5%)
7. SINGAPORE (4,8%)
8. MALTA (4,4%)
9. CHINA (3,5%)
10. CYPRUS (2,5%)
11. SOUTH KOREA (1,6%)
12. NORWAY (1,5%)
13. UK (1,4%)
14. JAPAN (1,4%)
15. GERMANY (1,4%)
16. ITALY (1,3%)
17. ISLE OF MAN (1,3%)
18. INDIA (1,2%)
19. DENMARK (1%)
20. ANTIGUA & BARBUDA (1%)
21. USA (1%)

The following infographic shows 2015 statistical data about the number of merchant vessels (passenger and cargo ships) registered in foreign states compared to those carrying ship's national flag.

Cruise Ship Registry

Cruise ships registry choices are made by cruise lines (or ship operators when the vessel is on charter). The main factors determining their decision are:

• flag-state's capabilities to deliver the services the company needs
• flag's reputation in the worldwide community of major international shipping companies
• flag-state's performance (how a cruise ship is prioritized by port states)
• seafarers pool (officers and crew) able to meet the flag's needs
• the amount of fees (charges) and taxes (country's tax rates).

In summation, because the cruise ship owner immediately becomes subject to all safety/labor/environmental laws of the flag-state, the majority of nations with the most popular open registries tend to be countries with the most lax safety/labor/environmental codes, low tax rates, very cheap port fees.

Why most cruise ships are registered in Bahamas/Panama, and not in USA?

The Bahamas (port of Nassau) is the No 1 registry of cruise ships worldwide and the world's 3rd largest ship registry after Panama and Liberia. Why cruise lines do not enjoy the idea of having their ships registered in the United States and prefer to operate ships registered in other countries?

The biggest of the largest in the cruise travel industry (Carnival, Royal Caribbean and Disney) along with major shipping companies (like Chevron, Texaco and Exxon - the parent company of Esso and Mobil) prefer The Bahamas as flag-state/flag of convenience (see the definitions bellow) over USA simply because for a "Bahamian" ship US labor laws do not apply.

On any marine vessels registered in Bahamas there are no codes about the number of hours a seafarer may work or his/her days off, no minimum wages, staff can be punished by the captain in case of complaining about issues (such as safety or food quality, for example). In other words, while on the ship, the captain has the absolute authority. This is the classic maritime law. Similar "benefits" offer Panama and Liberia as flag states.