GENUINE LINK AND FLAGS OF CONVENIENCE:

UNCLOS III

T P Deepak
Roll No 31
School of Legal Studies
CUSAT
Introduction

The concept of “Free Sea” does not provide absolute freedom. Every state
has privilege to navigate and explore sea resources in such responsible way
under the regime of “the Area” or High Sea. However, it also sets states’
obligation for resources management and conservation and the ships’
responsible that are operated in the high sea. The principles of UNCLOS in
article 91, 92, and 93, which also in line to article 6(2) and 5(2)a of the High
Seas convention 1958, elaborate that ship must present its nationality
under one specific state, fly its national flag, and has registration and
related documentation as evidence of the right to fly the State flag

The Concept of the Flag State and the Evolution of Flags of

Convenience
‘Flag state’ is a professional term used to describe the process of the
registration of commercial ships; a country that allows ships to fly its flag is
known as a flag state. For that reason, the flag a ship flies legally indicates
its nationality . Once a ship is documented and registered, it takes the
nationality of that flag regardless of where it originated or who owns it. A
ship with no nationality is regarded as a stateless ship: it enjoys no
protection on the high seas and will be denied access to foreign ports and,
eventually, the ship will not be able to trade internationally. In today’s
world, the stateless ship suffers even more severe consequences by being
regarded as a Pirate ship that is attempting to evade jurisdictions . Because
the high belongs to all states, including landlocked states, and are outside
the reach of any state’s jurisdiction, ships sailing on the high seas fall
exclusively under their flag state’s jurisdiction
Flags of convenience are also referred to as “open registries” because they
allow registration of ships that are owned and controlled by foreign
nationals, either individuals or corporate entities.
The Rochdale Report of 1970, which to date is the most widely accepted
definition of FOCs, listed six criteria to determine whether a ship is
registered under a FOC.
1) Registration by non-citizens is allowed.
2) Easy registry access, usually with foreign consulates available and
unrestricted transfer from the registry.
3) Minimal to non existent taxes.
4) The registry country is small, and tonnage charges may produce
substantial effects on national income.

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5) Ships are free to use non-national labor.
6) The country of registry has neither the power nor the administrative
framework to effectively impose domestic or international regulations; nor
does it wish to exert control over the companies.
Some of the economic advantages, which may motivate FOC registration, are
1) Increased market value of the ship.
2) Easy currency conversion.
3) Decreased cost of repairs.
4) Reduced operating costs.
5) Owners may avoid national income taxation.
6) Owners are able to acquire new tonnage more easily from their increased
earnings.
7) Owners may avoid home country governing the condition of the vessel.

Evolution and Contexts of Flags of Convenience (FOCs)

A system commonly known as “flags of convenience” has developed, in
which commercial vessels register in a countries with “open registries” and
consequently the ships contain virtually no link to the flag states in which
they are registered. Since the 1920s the FOC system has proven to be
extremely profitable not only for the vessel owners and shipping companies
that utilize open registries, but also for the countries that operate the lax
registry apparatuses. In the present day, the problems created by the FOC
system, combined with the anarchical nature of the high seas and the highly
advanced technology possessed by state and non-state actors alike, pose
great dangers to the international community. In general, the practices of
FOC states aggravate problems commonly associated with maritime trade
and threaten vitally important transnational interests such as national
security, environmental issues immigrant/refugee movement, and labor
issues. Furthermore, the operations of the FOCs pose significant obstacles
to the development of an effective international regime capable of compelling
the various players in international maritime transport and trade to conform
to international law.
The shipping industry is the most highly competitive and globalised industry
of all, yet it is an undeniable fact that it is also one of the highly regulated
industries. For that reason, ship owners have flexibility to choose where to
register their vessels based on cost, convenience and the international and
domestic regulations that would govern their operations . Nevertheless, this
freedom is sometimes abused and somehow ship owners end up in the
hands of flag states that are incapable of enforcing international and

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national jurisdictions over their ships. Once again, these failed flag states
are what are referred to as the FOCs This failure is characterised by flag
states (including many of the open registries): a) not ratifying and
domesticating important international maritime conventions; b) delegating
the flag state’s role to recognised organisations; and c) allowing some
commercial companies to represent the flag state in issuing ships’
nationality. It is the customary international practice, accepted by the
international maritime community, that the flag state can delegate some of
its obligatory roles to Recognised Organisations.

CONCEPT OF GENUINE LINK IN UNCLOS III

UNCLOS covers the use and allocation of ocean resources in a document
that consists of 320 articles, divided into seventeen parts, and includes nine
annexes. 29 Some of the areas of maritime law covered by the Convention
are territorial jurisdiction, navigation rights, resource exploitation rights,
marine research rights, marine environment protection obligations, and a
dispute settlement process. The right of states to confer nationality to ships
comes with a number of responsibilities. The High Seas, regarding the
provisions governing flag – and port- state control and vessel nationality,
namely Article 91: Nationality of ships; Article 92: Status of ships;
i. Article 94(1) - General Statement of Duties
This section makes explicit the matters on which flag states should exercise
jurisdiction. It provides that every state be required to "effectively exercise its
jurisdiction and control in administrative, technical and social matters over
ships flying its flag".
One could say that this paragraph attempts to strengthen the concept of
genuine link provided for in article 91 concerning the nationality of a ship,
by indicating matters over which the state should exercise jurisdiction). It
also complements article 92(1) of UNCLOS to the effect that, on the high sea
or exceptional cases provided for in international treaties, a ship is subject
to the exclusive jurisdiction and control of its flag state.
ii. Article 94(2) - Maintain Register and Assume Jurisdiction
Flag states are required to maintain a register of ships flying its flag and to
assume jurisdiction under its internal laws over each ship, its masters as
well as crew in administrative, technical and social matters concerning the
ship. It is important to note that, beyond the requirement that the register
should contain the names of the ships and particulars, no further
requirements were specifically mention within this provision. Article 11 of
UNCLOS, on the other hand, sets out in considerable detail, the information
that should be included in a register of ships.

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iii. Article 94(3) and (4) - Construction, Equipment and Seaworthiness of
ships
Here, flag states are imposed with the obligation to ensure safety with regard
to the construction, equipment, seaworthiness of ships, qualified crew and
communication maintenance. Article 217(2) of UNCLOS extends the scope of
article 94(3); it requires the flag State to ensure that its vessels are
prohibited from sailing until they can proceed to sea in compliance with the
requirements of international rules and standards with regard to design,
construction and equipment of vessels.
Article 94(4) provides that measures be taken by flag States must include
those necessary to ensure "that each ship, before registration and thereafter
at appropriate intervals, is surveyed by a qualified surveyor of ships, and
has on board such charts, nautical publications and navigational equipment
and instruments as are appropriate for the safe navigation of the ship".
It also stresses that ship officers and crew should possess appropriate
qualifications, and adhere to international regulations to guarantee safety
and prevent pollution and collisions. Furthermore, International law
empowers states to issue their flags to an individual merchant ship or
fishing vessel. As part of their responsibility to other states, each state has
the obligation to confirm seaworthiness and by such, do adequate due
diligence before issuing registration and may deny or revoke registration to
“problem ships”/repeat offenders (Anastasia, 2013).
iv. Article 94(5) - Conformity With International Regulations;
Similarly, with regards to article 94(3) and (4), subsection 5 of the same
article stresses that flag state are required to conform to “generally
accepted” international regulations, procedures and practices and to take
any steps which may be necessary to secure their observation.
The emphasis on the above phrase” internationally accepted regulations and
practices” is dictated by practical necessity. While each state remains free to
apply its own legal requirements as regards safety, there would be chaos if
these requirements widely varied or where incompatible.
This provision is vague to an extent because the regulation and procedures
to be adopted are not specified. It also does not give a guidance as to what
legislation could be classified as “generally accepted”. Thus one could go
ahead to understand it to mean rules and standards established through
competent international organizations or general diplomatic conferences to
bridge the reluctant of states to impose strict safety legislations due to
competition in the industry. Thus, a state might be bound to standards it
did not specifically adopt. Examples of such rules, procedures and
standards include SOLAS, MARPOL etc.

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Flag states by this article, are under obligation to take any steps necessary
to ensure observance of generally accepted international regulations and
procedures. Including those related to safety, marine pollution and the
maintenance of radio communication.
v. Article 94(6) – Reports to Flag States
This provision makes it possible for any other State, which has grounds to
believe that the flag State has not exercised proper jurisdiction and control
with respect to a ship, to report the facts to the flag State. When the flag
State receives such a report, it is to investigate the matter and, if necessary,
take remedial actions.
While this provision calls for god faith on the part of flag states, it also re-
emphasizes the exclusive jurisdiction of flag states over vessels flying its flag
on the high sea.
vi. Article 94(7) – Inquiry into Marine Casualties
This provision imposes on states the obligation to carry out inquires before
qualified people/person into every maritime accidents on the high sea.This
applies to incidents that cause loss of life or serious injury to nationals of
another State, or serious damage to ships or installations of another State or
to the marine environment.
Other provisions of particular relevance to this paper include Article 217:
Enforcement, requiring flag states to ensure their vessels only sail when in
compliance with international rules and standards. The flag state is required
to investigate any violation of international standards and to report the
outcome to the international community. Article 218: Port state
enforcement, allows investigations regarding “discharges” in violation of
international rules and standards, outside of the port state’s territorial
waters. Finally, Article 219: Measures relating to seaworthiness of vessels
to avoid pollution, expands port state authority to include administrative
proceedings initiated due to the violation of international standards
regarding ship seaworthiness or pollution prevention. Ships may be detained
until the causes of the violation have been removed, after which the vessel
may continue on its way.
SHIP REGISTRATION AND OPEN REGISTRIES/FLAGS OF CONVENIENCE

International Law has long recognized the right of states to fix conditions for
granting their nationality to ships. When a ship of any registration is within
the territorial sea (12 nautical miles from the baseline) of any country, it can
be governed by the law of that state subject to certain recognized limitations
imposed by international law such as the right of innocent passage without
interruption. When the vessel is outside the territorial sea and is on the high
sea, the laws of the flag state and the general public international law are
the only laws that apply to it.

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Furthermore, Article 91 (2) of UNCLOS requires that flag states not only
register ships but to issue registered vessels with documentation to prove
registration and nationality.
The process of registration results but is not limited to:
• The allocation of a vessel to a specific State and its subjection to a single
jurisdiction for the purposes, for example, of safety regulation, security
aspects, crewing and discipline on board;
• The conferment of the right to fly the national flag;
• The right to diplomatic protection and consular assistance by the flag
State; the right to naval protection by the flag State.
Those against open registration and the FOC practices, led by the
International Transport Worker’s Federation (ITF), not only point a finger at
the FOCs’ practices, they also claim that even open registration is contrary
to a ‘genuine link’ assumption. The right is codified in Article 91 of the
UNCLOS qualifies the right, providing that “there must exist a genuine link
between the State and the ship.” The “genuine link” language has been a
source of controversy in scholarly discussions, because, in practice, many
States operate as “open registries” that place minimal or no restrictions on
what ships may fly their flag, and therefore possess its nationality.
Article 91’s ambiguity has led a majority of commentators to find a genuine
link as long as the Flag State–that is, the State who allows certain ships to
fly its flag–is able to exercise its jurisdiction. Case law of some international
tribunals have mirrored the majority view on jurisdictional capacity giving
rise to a genuine link. In one such case, M/V "SAIGA" (No. 2), the
International Tribunal of the Law of the Sea stated:
“the purpose of the provisions of the convention on the need for a genuine link
between a ship and its flag State is to secure more effective implementation of
the duties of the flag State, and not to establish criteria by reference to which
the validity of the registration of ships in a flag State may be challenged by
other States.”

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Gross tonnage vs Number of vessels

Source: Lloyd's List Intelligence, November 2021

NOTE: Vessels above 500 GT

However, one cannot legally oppose their existence or their right to set the
rules for ship registration as it is because Article 91 of UNCLOS gives every
sovereign state the right to decide whom to accord the right to fly its flag and
to prescribe the rules governing such grants. This was illustrated in the case
of the “Muscat Dhows” between Great Britain and France, which is seen a
primary and complacent locus classicus. The court in giving judgment that
a state is free to register any vessel regardless of its nationality set forth a
principle that until today is used as a judicial precedent by courts
The relatively “soft” nature of the norms of the UNCLOS’82 and its
predecessor, the Convention on the High Seas 1958, on the genuine link,
has led to the proliferation of the practice of FoC. In addition, at the end of
the 20th century, the international (“second”, “open”, “alternative”, or
“parallel”) ship registries with special, simplified rules of registration were
created in the traditional maritime states.
According to the UNCTAD, at the beginning of 2021, more than half of all
ships owned by Japanese entities were registered in Panama; of the ships
owned by Greek entities, 25 per cent were registered in Liberia and another
22 per cent in the Marshall Islands. Panama (344 million dwt), Liberia (300

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million dwt) and the Marshall Islands (274 million dwt) represented the
leading flags of registration. Hong Kong SAR and Singapore followed in
fourth and fifth place, respectively. Among these five, the Marshall Islands
recorded the most substantial increase in registrations over the last decade
(UNCTAD Handbook of Statistics 2021 – Maritime transport,
The genuine link and the pollution control
The marine sources of pollution are primarily ships, mainly tankers, and
installations for the exploration and exploitation of the resources of the
seabed and its subsoil, supplemented by the issue of large passenger liner.
The UNCLOS 82 includes norms delimiting the jurisdiction of a flag state, a
coastal state, and a port state to enforce the international norms and the
standards or the national laws and the regulations to prevent marine
pollution from ships. According to UNCLOS 82, the advantage in ensuring
their implementation remains for the jurisdiction of a flag state.. Suppose a
ship violates the stated international norms and standards or national laws
and regulations. In that case, a flag state shall take measures to investigate
without delay and, where it is appropriate, initiate proceedings against the
alleged violation, regardless of where the violation was committed or where
contamination was occurred or was detected as a result of such violation (p.
1 and p. 4 the art. 217). In addition, the UNCLOS’82 establishes the
universal jurisdiction of a port state to enforce the international norms and
the standards for the prevention of marine pollution from ships (the art.
218). Such a triple jurisdiction system regarding pollution (a state of the
flag, a coastal state, and a port state) is designed to maximize the protection
of the sea from pollution from ships. The general standards for combating
marine pollution are enshrined in article 194 of the UNCLOS’82.
However Evidence suggests that ships sailing under the FOCs are believed
to be more prone to cause maritime pollution on the high seas and oil spills
in coastal states’ territorial waters than those under national registration
According to the GESAMP report, ship-related pollution ranges from sewage,
chemical spills, oil spills, operational and shipwrecks and exhaust emissions
to natural oil seeps

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CONCLUSION
Any effort to improve the international maritime legal regime must aim to
restore the “genuine link” between the shipping vessel and the flag it flies, as
required by Article 91 of UNCLOS. However, because certain ship owners,
countries that operate open registries, and other beneficiaries of the FOC
system will undoubtedly mobilize vast resources to block any attempt by the
international community to eradicate the FOC phenomena, the solutions
must be shaped to create a system in which it is in all parties’ best interests
to operate under a more regulated maritime industry. In order to create
such a system we suggest a two pronged approach, the creation of a dual
incentive structure in which the benefits accrued by businesses and
governments outweigh the costs of operating under increased regulation.
The purpose is to make it more profitable and advantageous for businesses
and governments alike to enact and enforce the pre-existing UNCLOS
regulations and to provide for more stringent regulations of ships under
their flag and in their ports

BIBLIOGRAPHY
Saint Vincent and the Grenadines v Guinea (M/V "Saiga" case No. 2)
(1999)ITLOS Case No 2
The Muscat Dhows Case (France v Great Britain) (1906)
The “Genuine link” Concept: Is It Possible to Enhance the Strength? Serhii
Kuznietsov S. (2021).
Flag of Convenience Practice: A Threat to Maritime Safety and Security,
Hamad Bakar Hamad. IJRDO-Journal of Social Science and Humanities
Research.

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