that commonality of nationality between the ship and the shipowner is an absolutely
essential ingredient of the concept of genuine link. Those who disagree belong to the
cadre of supporters of the non-traditional registries. In their view, the link must exist
between the flag state and the ship for it to qualify as “genuine” or “effective” under
the international law doctrine of genuine link. They would point to the words in
Chapter 91.1 of UNCLOS which expressly refers to the link between “the state and
the ship”. No mention is made of the shipowner in this provision; neither is there any
such mention in UNCCROS. While it is noteworthy that UNCCROS is not in force
and is hardly likely to ever enter into force, the convention does have persuasive
value in that it has influenced national maritime policy and legislation in many
jurisdictions.
7 It can also be contended that its conceptual reach and underpinning
has been instrumental in the development of the tonnage tax concept which is
unquestionably the hallmark of non-traditional registry systems.
8
It is contextually notable that the genuine link doctrine of ship nationality has its
roots in the classic decision of the International Court of Justice (ICJ) in the case of
Lichtenstein v. Guatemala
9 which involved the legal issue of nationality of an
individual. This case happened in the post-World War II era.
10 The other event of
importance is the advisory opinion sought by the International Maritime Organization (IMO) from the ICJ when the traditional maritime states of Europe challenged
the bid of Liberia and Panama for membership of the Maritime Safety Committee
(MSC). Even though they were the two largest tonnage holding states in the world, it
was contended that there was no commonality of nationality between ships and
shipowners in those two states. The genuine link requirement was therefore not
satisfied. The ICJ held otherwise. In its view, the IMCO Treaty spoke nothing of
owner nationality; entitlement to membership of the MSC was simply based on the
size of tonnage.
11
If the term “open registry” is used in a general sense, there are several types of
registries which can be described as “non-traditional”; in other words, they are not
closed. The hybrid registry is one that has certain characteristics of the closed
registry system in that safety and pollution prevention standards are not
compromised. However, there are virtually no restrictions regarding the nationality
of the ship owner, or where it is a corporate entity, the country of incorporation or
principal place of business. The bareboat charter registry is another alternative to the
traditional registry which allows a bareboat charterer to register the ship in its flag of
choice different from the state of registration of the owner. In the European context,
the secondary registry is the one that is the most important in terms of the use of the
tonnage tax as an alternative to normal corporate income tax. In the secondary
7 Ready (1994).
8 Ibid.
9 (1995), I.C.J. Rep. 4.
10 Ready (1994).
11 Constitution of the Maritime Safety Committee of the Inter-Governmental Maritime Consultative
Organization, Advisory Opinion, 1960 I.C.J. 150 (June 8).
716
Y. Yin
essential ingredient of the concept of genuine link. Those who disagree belong to the
cadre of supporters of the non-traditional registries. In their view, the link must exist
between the flag state and the ship for it to qualify as “genuine” or “effective” under
the international law doctrine of genuine link. They would point to the words in
Chapter 91.1 of UNCLOS which expressly refers to the link between “the state and
the ship”. No mention is made of the shipowner in this provision; neither is there any
such mention in UNCCROS. While it is noteworthy that UNCCROS is not in force
and is hardly likely to ever enter into force, the convention does have persuasive
value in that it has influenced national maritime policy and legislation in many
jurisdictions.
7 It can also be contended that its conceptual reach and underpinning
has been instrumental in the development of the tonnage tax concept which is
unquestionably the hallmark of non-traditional registry systems.
8
It is contextually notable that the genuine link doctrine of ship nationality has its
roots in the classic decision of the International Court of Justice (ICJ) in the case of
Lichtenstein v. Guatemala
9 which involved the legal issue of nationality of an
individual. This case happened in the post-World War II era.
10 The other event of
importance is the advisory opinion sought by the International Maritime Organization (IMO) from the ICJ when the traditional maritime states of Europe challenged
the bid of Liberia and Panama for membership of the Maritime Safety Committee
(MSC). Even though they were the two largest tonnage holding states in the world, it
was contended that there was no commonality of nationality between ships and
shipowners in those two states. The genuine link requirement was therefore not
satisfied. The ICJ held otherwise. In its view, the IMCO Treaty spoke nothing of
owner nationality; entitlement to membership of the MSC was simply based on the
size of tonnage.
11
If the term “open registry” is used in a general sense, there are several types of
registries which can be described as “non-traditional”; in other words, they are not
closed. The hybrid registry is one that has certain characteristics of the closed
registry system in that safety and pollution prevention standards are not
compromised. However, there are virtually no restrictions regarding the nationality
of the ship owner, or where it is a corporate entity, the country of incorporation or
principal place of business. The bareboat charter registry is another alternative to the
traditional registry which allows a bareboat charterer to register the ship in its flag of
choice different from the state of registration of the owner. In the European context,
the secondary registry is the one that is the most important in terms of the use of the
tonnage tax as an alternative to normal corporate income tax. In the secondary
7 Ready (1994).
8 Ibid.
9 (1995), I.C.J. Rep. 4.
10 Ready (1994).
11 Constitution of the Maritime Safety Committee of the Inter-Governmental Maritime Consultative
Organization, Advisory Opinion, 1960 I.C.J. 150 (June 8).
716
Y. Yin