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The status of the Parallel-out Registration under Cyprus flag

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The status of the Parallel-out Registration under Cyprus flag

 A. Overview

i. Relevant Law

All matters relating to the registration of ships and the related transactions in the Special Book of Parallel Registration are governed by the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law of 1963, as amended (‘’the Law’’).

ii. Applications

Applications for the registration of ships and for the related transactions in the Special Book of Parallel Registration must be submitted to the Registrar of Cyprus Ships.

Under the Advocates Laws Cap 2, only lawyers registered as practising advocates in Cyprus, are entitled to carry out all registry transactions, acting on behalf of the owner(s).

The registration of ships and the related transactions are effected by the Registrar of Cyprus Ships (the Registrar), who is stationed at the Head Office of the Shipping Deputy Ministry in Limassol.

iii. Payments

The legislation requires the payment of the prescribed fees and taxes prior to the registration of a ship or other transaction in the Special Book of Parallel Registration

B. Parallel Registration

i. Terminology

According to Article 23 of the Law, parallel registration is the registration of a ship in the register of a country for a certain period of time and under specified legal prerequisite conditions, whilst the ship remains registered in the register of another country.

ii. Parallel registration in the Cyprus Register

The Law allows the parallel registration of vessels in the Registry of Cyprus Ships. By parallel registration, a foreign vessel can be registered, for a certain period of time, under the Cyprus flag while at the same time continuing to be registered, in parallel, in the foreign registry and vice versa. Under Cyprus Law, it is provided for the two forms of bareboat (charter) registration, the parallel in and the parallel out registration.

C. Parallel- out Registration

i. Rule

The Parallel-out registration is used when a bareboat charterer wishes to register in parallel a vessel, which is already registered permanently under the Cyprus flag, to a foreign Registry. Thus, the parallel-out registration of a Cyprus ship in a foreign register shall be allowed if the ship is bareboat chartered to a foreign individual or corporation and the law of the country of the foreign registry allows the parallel registration of ships of another registry, under prerequisite conditions similar to those set out in the Merchant Shipping (Registration of Ships, Sales and Mortgages) Laws of 1963, in the case of the parallel- in registration of foreign ships in the Cyprus Register.

It is of great importance to be emphasised that this form of registration allows the financing of a ship and her mortgaging under the Cyprus Laws and later her parallel registration in a foreign registry.

Furthermore, the deletion of the ship from the Register of Cyprus Ships where its ownership and mortgages are registered is neither required nor allowed. However, its right to fly the Cyprus flag and to have the Cypriot nationality is suspended.

In addition, the subject vessel has to fly the flag of the foreign registry and the name of the foreign port of registry has to be marked on her stern. However, any matters relating to the ownership of the vessel or to any mortgages created against her are exclusively governed by the Cypriot legislation and handled by the Registrar of Cyprus Ships.

ii. Conditions for the parallel-out registration of Cyprus ships in a foreign register

  1. The approval of the Minister shall be required for the parallel registration of a Cyprus ship in a foreign register.
  2. The parallel registration in a foreign register shall be allowed only for ships which are permanently registered in the Cyprus Register. By way of exception, the Minister shall have power to approve the parallel registration of a Cyprus ship which is provisionally registered under conditions which he may deem reasonable to impose in each case.
  3. The approval of the parallel registration of a Cyprus ship in a foreign register shall be granted on the application of the shipowner.

iii. Documents Required for the Parallel-out Registration

  1. Application from registered owners.
  2. Resolution of Directors of registered owners (certified).
  3. Power of Attorney authorising the person who will sign all the necessary documents on behalf and on account of the registered owners.
  4. Copy of charter party (certified).
  5. Consent of foreign registry and confirmation that parallel registration of the Cyprus ship    is permitted (with official translation).
  6. Consent of mortgagees (certified).
  7. Consent of bareboat charterers (certified).
  8. Original Certificate of Cyprus Registry.
  9. Confirmation by the Accounting Authority that they will continue to settle the vessel´s Radiomarine accounts.
  10. Written declaration of owners and charterers, undertaking that, during the ship´s parallel registration in the foreign registry:
  • Cyprus laws will be respected;
  • The ship will continue to meet the same requirements, as regards compliance with international conventions, as they apply to Cyprus ships, even though the state of parallel registry may not be a contracting party to all those conventions;
  • A certified copy of the certificate of parallel registration, issued by the foreign registry will be deposited with the Registrar of Cyprus ships within one month; and
  • Any changes in the name or other particulars of the ship will be communicated to the Registrar of Cyprus Ships without delay.

 iv. Duration of parallel registration of Cyprus ships

The status of parallel registration of Cyprus ships shall continue to be in force for the duration of the charter party, if the approval of the Minister and the consent of the appropriate maritime authorities of the foreign register are in force, but in any case for a period not greater than three years. However, the Minister shall have power, on the application of the shipowner and with the consent of the mortgagees, to approve an extension of the status of parallel registration provided the remaining prerequisite conditions according to the law in this respect are met.

v. Certificate of registration

During the period the status of the parallel-out registration of a Cyprus ship is in force, the ship shall hoist the flag of the foreign registry and she cannot use the Cyprus flag. This means that the Cyprus certificate of registration shall be delivered to the Registrar and shall be returned to the shipowner as soon as the status of parallel registration of the ship in the foreign register is terminated.

The registration in the Cyprus Register shall be suspended for the period during which the parallel registration of the ship in the foreign register is in force.

 Author: Zacharias L. Kapsis

 

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