8 october 2019

Title: Incentive to the Colombian Merchant Navy through the Promotion of Ship Registration.

Author: Nathalie Berrio Chamorro

It is important to clarify that Ship Registration is understood as the process by which the ship is documented and from that moment, it is authorized by a certain country to fly its flag. This way, the ship acquires its nationality. This implies international maritime law and international conventions in this regard, such as CONVEMAR, "an authentic or substantial connection of the ship with the internal legal system of that State." The registrations are: traditional or closed, open registrations or flags of convenience and special registrations: offshore or second registrations.

The question then arises: What should a State, specifically Colombia, do to encouraged and incentivised the development of its merchant navy and thus prevent the migration of ships of national capital to other Registers? One of the answers is precisely the object of research analysis and is the up-to-date legislation of the Ship Registry in Colombia.

The project is carried out in three chapters, with which it is intended to answer that question, to find the reasons and the national and international normative support for the registration of ships and using these supplies to propose a comprehensive update to the flagging and registration of ships in Colombia and thus promote the Colombian Merchant Navy, taking into account that it is a country bathed by two oceans and with an operational capacity to be developed.

In the first chapter, we capture the statutory legal reality of the country, where we investigate the registration of ships in Colombia, finding Law 730 of 2001 called “Ley de Registro y abanderamiento de naves” (Law of Registration and flagging of ships) in force, and complement Book V of the Commercial Code and Decree Law 2324 of 1984, which creates the Dirección General Marítima (General Maritime Directorate of Colombia), entity responsible for carrying and promoting the registration of ships in the country; setting both the parameters and requirements to opt for the registration of ships and their responsibilities, as well as the implications in labor and tax matters, also requires the shipowners or their representatives about twenty-six documents for registration, which are obtained in different units, as is the case of the Directorate of Narcotic Drugs, whose final procedure is six months.

Also, the regulations on insurance matters (article 188 of the EOSF) say that these must be taken with Colombian companies or authorized by the country's financial authority.

In fiscal matters we see the exclusion of the payment of the stamp tax on Colombian flag vessels, as well as exemption from VAT payment for ship repairs and certain customs benefits (Temporary Import for active improvement or Law 915 of 2004 that creates the Special Customs Zone in the Archipelago of San Andrés, Providencia and Santa Catalina) but in general and specifically there are no more tax or customs incentives to promote the registration of Colombian vessels.

In Colombia we have a closed registry, which, although it guarantees the genuine connection between the ship and the flag State, is not striking, generating a decrease in the number of ships that constitute the merchant navy of the country; outdated rules and lacking tax and customs incentives.

In the second chapter we verify different registers at international level other than Colombia’s, such as Panama, which is a power in open registration issues; we also found that countries with similar registers to ours implemented regulatory systems to incentivize their merchant seafarers, as is the case of REBECA in Spain, which creates the only and second national special register of ships in the Canary Islands. Finally, we confront international norms such as CONVEMAR, and regional standards, such as Decision 314 of 1992, modified by Decision 390 of 1990, which sets out as actions of the member countries “The implementation of a policy of flexibility in the area of ​​registration of ships, that constitute an alternative of competitiveness for the companies of maritime transport of the Subregion (territorial subdivision of Colombia), that includes the use of ships of flag of convenience, second registrations, and others”. The foregoing is for a possible internal update that is not against international precepts.

We conclude the investigation with a normative proposal, nourished with the results of what was investigated in the first two chapters that is, maintaining what the current internal norm shows us and we can highlight, and the nationalization of Legal Systems of other countries to include them in ours, of course respecting our legislative and economic reality.

CONCLUSIONS:

1. Colombia has a closed and uncompetitive vessels system, for which it is necessary to update the internal norm.

2. The creation of a more flexible vessel register system and a second national register in an island area such as San Andrés, Providencia and Santa Catalina, as well as a recreational craft registry and the temporary entry of ships.

3. Include figures such as the Ship Resident Agent who is a lawyer or a society of lawyers, suitable for the exercise of the profession, for representation of the shipowner and relevant purposes.

4. Tax and customs incentives specifically aimed at flagging and special registration of ships are included in the normative proposal.

5. In this way, we understand that, with the structural reform of the National Registry of Colombian Vessels, the merchant Navy of the country is encouraged by gradually increasing the number of vessels registered in our pavilion, without losing sight of the need to continue maintaining the essential link between the State and the ship, understanding responsibility of the flag State and thus guaranteeing the maritime safety of the country with a strong but flexible registry of ships. While it is not an easy or medium-term exercise, it is the first big step to win back the interest of shipowners.