be owned
abroad. The captive register then acts as a flag of convenience
register, except that it is not the register of an independent state.
Flag of convenience register--A national register offering
registration to a merchant ship not owned in the flag state. The major
flags of convenience (FOC) attract ships to their register by virtue
of low fees, low or nonexistent taxation of profits, and liberal
manning requirements. True FOC registers are characterized by having
relatively few of the ships registered actually owned in the flag
state. Thus, while virtually any flag can be used for ships under a
given set of circumstances, an FOC register is one where the majority
of the merchant fleet is owned abroad. It is also referred to as an
open register.
Flag state--The nation in which a ship is registered and which
holds legal jurisdiction over operation of the ship, whether at home
or abroad. Differences in flag state maritime legislation determine
how a ship is manned and taxed and whether a foreign-owned ship may be
placed on the register.
Internal register--A register of ships maintained as a subset of
a national register. Ships on the internal register fly the national
flag and have that nationality but are subject to a separate set of
maritime rules from those on the main national register. These
differences usually include lower taxation of profits, manning by
foreign nationals, and, usually, ownership outside the flag state
(when it functions as an FOC register). The Norwegian International
Ship Register and Danish International Ship Register are the most
notable examples of an internal register. Both have been instrumental
in stemming flight from the national flag to flags of convenience and in
attracting foreign-owned ships to the Norwegian and Danish flags.
Merchant ship--A vessel that carries goods against payment of
freight. Commonly used to denote any nonmilitary ship but accurately
restricted to commercial vessels only.
Register--The record of a ship's ownership and nationality as
listed with the maritime authorities of a country. Also, the
compendium of such individual ships' registrations. Registration of
a ship provides it with a nationality and makes it subject to the laws
of the country in which registered (the flag state) regardless of the
nationality of the ship's ultimate owner.
Money figures: All are expressed in contemporaneous US dollars
unless otherwise i
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