The Legal 500

The Cyprus Department of Merchant Shipping has announced that the Merchant Shipping (Community Vessel Traffic Monitoring and Information System) Order of 2012, issued under section 351 of the Merchant Shipping (Community Vessel Traffic Monitoring and Information System) Laws of 2004 and 2010, entered into force on 16 March 2012. The Order transposes EU Directive 2011/15/EC amending Directive 2002/59/EC.

As per the previous VAT regulations in Cyprus yacht purchase and yacht leasing was subject to full rate of VAT at 17%. A lot of questions were raised justifiably when the yacht was not actually used within Cyprus and EU territorial waters.

The Department of Merchant Shipping has issued revised versions of Forms MSTT8 and MSTT8A (Declaration of Owner of a Cyprus Ship) for the purposes of the tonnage tax on shipping activities.

Amendments announced to Cyprus-Italy agreement on maritime navigation

The Department of Merchant Shipping has announced that the 2004 agreement between Cyprus and Italy on maritime navigation has been amended by an exchange of notes between the two countries. The amendments took effect on November 23 2011. 

insurance of shipowners for maritime claims- Harmonisation Measures

The Cyprus Department of Merchant Shipping has issued a circular to owners and operators of Cyprus-registered ships reminding them that with effect from 1 January 2012 Directive 2009/20/EC requires the owners of all types of ship of 300 gross tonnes or above to have insurance cover against maritime claims subject to limitation under the International Maritime Organisation's 1976 Convention on Limitation of Liability for Maritime Claims, as amended by the 1996 Protocol. 

The twenty-seventh biennial Assembly meeting of the International Maritime Organization (“IMO”) was held in London in November 2011. During the session, the Assembly re-elected Cyprus as a member of its Council for a further two years.

The Department of Merchant Shipping has recently issued an updated list of countries whose certificates of competency are recognised by Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978, as amended. The only change from the previous list, issued by the department in March 2011, is that Morocco is no longer under evaluation by the European Commission for accession to the convention.

Certification and Watchkeeping for Seafarers, STCW 78

The Cyprus Department of Merchant Shipping has issued an updated list of countries whose certificates of competency are recognised by the Republic of Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, STCW 78, as amended. 

The Cyprus Department of Merchant Shipping has announced that the Minister of Communications and Works has issued the Merchant Shipping (Marine Equipment) Order of 2011, PI 274/2011 in accordance with section 21(1) of the Merchant Shipping (Marine Equipment) Laws 2002 – 2006 (Law 55(I)/2002 as amended).

On loans between connected entities

Section 33 of the Cyprus Income Tax Law allows the tax authorities to adjust a company’s taxable profit in the event that transactions between related companies are undertaken other than on an arm's length basis. 

The Merchant Shipping (Port State Control) Law of 2011 (Law 95(Ι)/2011) transposes Directive 2009/16/EC of the European Parliament and of the Council dated 23 April 2009 into Cyprus law. The new Port State Control Law repeals the Merchant Shipping (Port State Control) Laws of 2001 to 2009 and any Notifications issued under them.

The Merchant Shipping (Safety Rules and Standards for Passenger Ships) Order of 2011 PI 247/2011, which took effect on 29 June 2011, transposes Commission Directive 2010/36/EU dated 1 June 2010 amending Directive 2009/45/EC of the European Parliament and of the Council on safety rules and standards for passenger ships into Cyprus law.

Topics: (1) Cyprus’s advantages as a shipping centre (2) The European shipping market (3) Protection of competition (4) The ISM Code and the ISPS Code (5) Registration of Cyprus ships (6) Registration procedures (7) Ship mortgages (8) Crew

The Cyprus Department of Merchant Shipping has issued further guidance on its interpretation of the term 'Community ship' for the purposes of the Merchant Shipping (Fees and Taxing Provisions) Law 2010 (Tonnage Tax Law).

Maritime law is also known as Admiralty or Shipping law and it is defined as the body of law which deals with offences related to maritime activities or matters that are maritime in character such as maritime commerce, navigation, transportation of goods and passangers by sea, shipping sailors and the relationship between those who operate vessels on the oceans.

Cyprus is considered as an international maritime centre and offers significant incentives for the registration of vessels under the Cyprus flag. In addition, some of the world‟s largest international ship management companies are based in Cyprus.

New opportunities for shipping under new tax measures

The Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the Tonnage Tax Law) left certain issues of detail to be determined by the Department of Merchant Shipping, including precisely which towage and dredging activities would qualify for taxation under the tonnage tax regime. The Department of Merchant Shipping has now issued a Notification clarifying this issue.

The Cyprus Department of Merchant Shipping has published an updated list of countries whose certificates of seamen’s competency are recognised by Cyprus. Algeria has been added to the list, which is now as follows:

The Cyprus Department of Merchant Shipping has recently issued a circular reminding shipmanagers operating in Cyprus of the arrangements for assessment and payment of their tax liabilities for the fiscal year 2009.

For many years, the shipping industry has been resting in the wide arms of Regulation 4056/86 and the block exemption provided therein without being required to consider in much regard the EC rules on the preotection of competition.

The Cyprus Department of Merchant Shipping has recently issued a circular reminding shipmanagers of the arrangements for assessment and payment of their liabilities for 2008.

AND PROCEDURE FOR THE ISSUING OF BUNKERS CONVENTION CERTIFICATES.

The International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the "Bunkers Convention") was ratified by the Republic of Cyprus in 2004. The Bunkers Convention provides a liability, compensation and compulsory insurance system in respect of pollution caused by spillages of bunker oil from ships. Shipowners are liable to pay compensation for pollution damage caused by spillages, and are required to maintain insurance or other financial security to cover the potential liability calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended.

SOLAS Regulation XI-3-1 requires certificates issued after 1 January 2009 under regulation IX/4 and section A/19.2 or A/19.4 of the ISPS Code to show the IMO Unique Company and Registered Owner Identification Number of the owner of the vessel concerned.

(ISSUE AND RECOGNITION OF CERTIFICATES AND MARINE TRAINING) LAW OF 2008

SOLAS Regulation XI-3-1 requires certificates issued after 1 January 2009 under regulation IX/4 and section A/19.2 or A/19.4 of the ISPS Code to show the IMO Unique Company and Registered Owner Identification Number of the owner of the vessel concerned.

The Merchant Shipping (Issue and Recognition of Certificates and Marine Training) Law of 2008 (Law 27(I)/2008) came into effect on 30 May 2008. The law, which repeals and replaces the Merchant Shipping (Issue and Recognition of Certificates and Marine Training) Laws of 2000 to 2005, transposes Directive 2005/45/EC of the European Parliament and of the Council of 7th September 2005, (amending the basic Directive 2001/25/EC on the minimum level of training of seafarers) and implements the 1978 International Convention on Standards of Training, Certification and Watchkeeping for Seafarers into national legislation.

The Cyprus Department of Merchant Shipping has issued a new Codification and Updating of the current procedure of issuing Civil Liability Certificates pursuant to the laws ratifying the International Convention on Civil Liability for Oil Pollution Damage of 1969 and of its Protocols of 1976 and 1992.

Cyprus is a well-established shipping centre in a strategic geographical location at the crossroads of three continents close to the Suez Canal.

The shipping industry has  developed in line with the island’s growth as an international business and financial centre, and Cyprus is now the world’s third largest shipmanagement centre and home to the ninth largest merchant fleet in the world in tonnage terms. This article appeared in the September 2007 issue of "Offshore Investment" and is reproduced by kind permission of the publisher.  

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  The European market

Two decades ago, EC Regulation 4055/86 established the freedom of EU nationals to provide maritime transport services of goods and passengers between Member States and between Member States and third countries with only very minor limitations still remaining.

EC Regulation 3577/92 granted Community shipowners operating ships registered in one Member State and flying the flag of that Member State and complying with all the conditions for carrying out cabotage within that Member State the freedom to provide maritime transport services within another Member State (maritime cabotage).

The reported existence of oil and natural gas reserves off the coast of Cyprus has prompted the Republic of Cyprus to introduce modern legislation to regulate the oil and gas sectors and to claim the Exclusive Economic Zone of the island in accordance with the United Nations Law of the Sea Convention which was ratified by Cyprus in 1988 (the UN Convention).

Cyprus is nowadays considered to be one of the most favourable jurisdictions in the European Union and the whole world in which to do business. It is a well-established shipping centre in a strategic geographical location at the crossroads of prosperous financial regions of three continents and next to the Suez Canal.