Cayman Islands: Ship Registration

Last Updated: 21 December 2008

INTRODUCTION

George Town, Grand Cayman is a British port of registry, established in 1903, and all ships registered here are designated British ships and fly the Cayman Islands Marine Ensign (British Red Ensign with the Cayman Islands crest). The Cayman Islands are now recognised worldwide as having an international ship registry operating to the highest standards of a British Port of Registry. This is as a result of extensions of the British Merchant Shipping Acts to the Cayman Islands and the adoption of construction and equipment standards applicable to United Kingdom ships enforced under the International Maritime Organisation Conventions for:

1. Loadline (1966);

2. Tonnage (1969);

3. MARPOL (International Convention for the Prevention of Pollution from Ships) (1973 and 1978 Protocol);

4. SOLAS (Safety of Life at Sea) 1974 and 1978;

5. ILO (International Labour Organization) (92 and 133) for Crew Accommodation; and

6. STCW (International Convention on Standards of Training, Certification and Watchkeeping for Seafarers) (1978) (adoption of which is in process).

The Cayman Islands are now able to provide ship owners with an internationally accepted registry as an alternative venue to Bermuda, Isle of Man and Hong Kong where the advantages of registering as a British ship are coupled with ownership from within a tax free area.

ADVANTAGES OF THE CAYMAN ISLANDS SHIP REGISTRY

1. A solid political, legal, fiscal and social environment with a stable parliamentary democracy since 1831.

2. An efficient, tax-neutral, international finance jurisdiction that offers a wide range of first-tier financial and business services.

3. Modern, comprehensive maritime legislation based on English Common Law allows flexibility for owners without compromising safety.

4. Excellent mortgage protection provisions to secure the rights of mortgagees and financiers.

5. Cayman's maritime administration, a statutory agency of the Cayman Islands Government, provides a diverse, qualified, and experienced global team of professional surveyors, auditors and registration personnel that share a common corporate philosophy that values long-term relationships.

6. Choice of a wide range of ownership structures enabling ownership of Cayman-registered vessels including individual, joint, company, and shipping entity.

7. A range of available vessel registration options including full, interim, provisional, under construction, and demise charter (bareboat), together with the registration of any associated mortgages.

8. An active international Ship-owners' Advisory Council and a national Maritime Sector Consultative Committee of maritime service providers IMO participation through the United Kingdom Government. The Ship-Owners Advisory Council also includes a Yacht Committee, formed in February 2007, specifically geared towards the needs of large yachts.

OWNERSHIP THROUGH A CAYMAN ISLANDS COMPANY

For a ship to be registered in the Cayman Islands as a British ship, it must be owned as to at least a majority by a "qualified person". The definition of "qualified person" has recently been greatly expanded and now includes a body corporate, incorporated in, and having its principal place of business (ie its "mind and management") in, or a partnership established in:

1. the Cayman Islands (usually an exempted limited company);

2. the United Kingdom;

3. any relevant overseas territory which is defined as:

(a) any other British Overseas Territories, including the British Virgin Islands, Anguilla, Gibraltar and the Turks and Caicos Islands; and

(b) the Crown Dependencies of the Isle of Man and the Channel Islands;

4. any member of the European Union or European Economic Area, including overseas countries, territories and dependencies of such states;

5. any 'approved country' which means those countries listed under the Third Schedule of the Cayman Islands Money Laundering Regulation.1

Our information memorandum on Cayman Islands exempted companies sets out features of such a company. If the owning company is not incorporated in nor has its principal place of business in the Cayman Islands it must appoint a representative person in the Cayman Islands in relation to the ship (Sections 3 and 4 of Form CISR 856).

REGISTRATION PROCEDURE

The following is a brief outline of the steps to complete the registration procedure where the vessel has never in its history been registered at a British port (ie registered in any Commonwealth country).

Approval of name – CISR 854

Approval of a ship's name must be applied for on Form CISR 854. Form CISR 854 should be submitted to the Registrar of Ships, George Town, Grand Cayman, Cayman Islands, who will approve or decline the proposed name in accordance with regulations for names of vessels. In addition to the port of George Town, The Creek (in Cayman Brac) and Bloody Bay (Little Cayman) have been designated as Ports of Registry. This expands customer options and enables similarly named vessels to be registered by adopting a different port from the port of the existing registered vessel.

Appointment of authorised person – CISR 855

All bodies corporate must appoint an individual as its authorised person to sign all documents required for the registration procedure. The appointment of the authorised person must be notarized if it is not authorised under the common seal of the company.

Application to register – CISR 856

This application is required to be made either by the owner personally or, if the owner is a company, through its authorised person.

Title documents – evidence of first registry

1. In the case of a British-built ship it is necessary to produce a builder's certificate, that is to say, a certificate signed by the builder of the ship, and containing a true account of the proper denomination and of the tonnage of the ship, as estimated by him, and of the time when and the place where she was built, and of the name of the person (if any) on whose account the ship was built, and if there has been any sale, the bill of sale under which the ship, or a majority of the shares therein, has become vested in the applicant for registry.

2. In the case of a foreign-built ship, the same evidence as in the case of a British-built ship, unless the declarant who makes the declaration of ownership declares that the time and place of her building are unknown to him, or that the builder's certificate cannot be produced, in which case there shall be required only the bill of sale under which the ship, or a majority of the shares therein, became vested in the applicant for registry.

3. In the case of a ship condemned by any competent court, an official copy of the condemnation.

All documents which are in a foreign language should be accompanied by a certified translation.

On transfer of registry from another British port

The Registry of any ship may be transferred from one United Kingdom or relevant overseas territory Port (as defined above) to another on the application to the Registrar of the existing port of registry of the ship being made by declaration in writing of all persons appearing on the register to be interested therein, as the owner or mortgagees. An official transcript of the Register is then sent to the Registrar of the port to which the registry is to be transferred. The ship's Certificate of Registration should be delivered up to the Registrar at the intended port of registry or to the Registrar of its current port of registry for onward transmission to the intended port of registry. Upon the fresh registration of the vessel in question the Registrar of the original port of registry will terminate the registration of the ship in his Register.

Re-registry

If at any time during the lifetime of a vessel applying to be registered, it was previously registered at a British port, it is necessary to obtain an official transcript of the register from the last British port, showing the closure of the registry with the vessel free from encumbrances. This is to avoid the possibility of dual registration.

Certificate of Survey

All ships must be surveyed (a Tonnage Measurement Survey) prior to registration by the surveyors of the Marine Survey Department, the United Kingdom Department of Trade or by surveyors of one of the following approved classification societies:

Lloyds Registrar of Shipping (LR)

Germanischer Lloyds (GL)

Det Norske Veritas (DNV)

American Bureau of Shipping (ABS)

Bureau Veritas (BV)

Registro Italiano Navale (RINA)

Nippon Kaija Kyokai (Class NK)

 

On application to the Registrar of Ships in the Cayman Islands, a survey prior to registration can be arranged in any port in the world where there is a Surveyor from one of the above organisations. The name of an approved surveyor can be ascertained from the Registrar of Ships or the Cayman Marine Survey Department. This survey is carried out to establish or verify the tonnage measurement and particulars of a ship and will be completed on Forms SUR No 59E(CI) and SUR No 53F(CI).

Declaration of Ownership

The owner or duly appointed authorised person in the case of a company, must complete a Declaration of Ownership (Section 2(b) of CISR 856) which states amongst other things that the owner is qualified to own a Cayman Islands ship as well as the number of shares in the legal title of the ship which is vested in him or it.

Registration and issue of Carving and Marking Note

Upon presentation to the Registrar of Ships of the foregoing documentation with the relevant fees the Registrar will register the vessel and provide the Certificate of Registry and also issue a Carving and Marking Note (Form No C.342). This document must then be forwarded to an approved surveyor who will inspect the vessel to ensure that the official number, port of registry and details of tonnage are properly marked on the vessel. The Carving and Marking Note is then to be returned duly certified by the surveyor to the Registrar of Ships within 21 days of its date of issue. A vessel may not proceed to sea until it has been marked in accordance with the statute.

Provisional registration

If, while outwith a British port of registry, a ship becomes the property of a "qualified person", the British Consul or High Commissioner in that port may grant a provisional Certificate of Registration which is valid for a period of up to three months or until the ship arrives at a port at which there is a Registrar of British ships. It is therefore possible to obtain provisional registry through a British Consulate or High Commissioner while the registration is being completed. In practice this option is now rarely utilized.

FEES FOR REGISTRATION, TRANSFER OF PORT OF REGISTRY OR RE-REGISTRY

Registration and tonnage taxes

The following are the registration and tonnage taxes payable to the Cayman Islands Government:

1.

Registration dues on new registration, transfer of port of registry, registry anew, or re-registry:

   
 

(a) for vessels up to gross tonnage 150 tons:

CI$328.00

US$400.000

 

(b) for vessels over 150 and up to 400 tons:

CI$492.00

US$600.00

 

(c) for vessels over 400 and up to 1,500 tons:

CI$697.00

US$850.00

 

(d) for vessels over gross tonnage 1,500:

CI$984.00

US$1,200.00

2.

Annual tonnage taxes:

   
 

(a) minimum annual fee:

CI$246.00

US$300.00

 

(b) per 100 gross tonnage up to the first 1,000 tons:

CI$41.00

US$50.00

 

(c) per 100 gross tonnage above the first 1,000 gross tonnage:

CI$13.77

US$16.79

3.

Registration fees for Bill of Sale, Mortgage or Discharge are:

   
 

(a) for vessels up to 499 gross tonnage:

CI$246.00

US$300.00

 

(b) for vessels over 499 gross tonnage:

CI$369.00

US$450.00

4.

Fees for inspection of Register:

   
 

(a) inspection of the Register:

CI$82.00

US$100.00

 

(b) certified Transcript of Registry:

CI$164.00

US$200.00

TRANSFER OF OWNERSHIP TO ANOTHER "QUALIFIED PERSON"

Every Bill of Sale (in the prescribed form) for the transfer of a registered vessel or a share therein, when duly executed, shall be produced to the Registrar of her port of registry together with a Declaration of Ownership (also in the prescribed form). Immediate registration of these documents is essential. Bills of Sale are entered in the Register Book according to the date of their presentation to the Registrar, not their date of execution.

MORTGAGES

A registered ship or a share therein may be made security for a loan or other valuable consideration. The instrument creating the security (which must be completed on prescribed statutory forms) must then be registered at the ship's port of registry. All mortgages are recorded by the Registrar in the order in which they are presented to him, not according to their dates of execution, and rank in accordance with registration date.

MANNING REQUIREMENTS

Safe Manning Certificates

The Cayman Islands Manning Regulations require every Cayman Islands ship which operates outside of the Cayman Islands to have a Safe Manning Certificate. The only exceptions are fishing vessels and pleasure yachts not engaged in trade.

The total number of crew required to be carried will depend on many factors such as the number of qualified personnel required to keep a safe navigation watch, radio watch and engine room watch, the number of men required to moor or unmoor a vessel, the number of men required to ensure cargo operations will be conducted safely and without risk to the marine environment, the number of men required to deal with a fire, or man-over-board emergency or launch life-saving equipment. The total number of crew required will be subject to the degree of automation provided and the ease of use of equipment provided on board. For these reasons a Safe Manning Certificate will relate to a particular vessel. Due to the diversified nature of shipping it is not practical to make hard and fast rules laying down precise numbers.

The Administration is however sensibly aware that manning costs have a very considerable effect on the long term costs of running a ship and on profitability. Owners considering registering ships in the Cayman Islands may at any time prior to registering submit manning proposals for a particular ship to the Marine Survey Department by fax on Form SMC9. Negotiations and problems are invariably resolved within two working days. The fee will be based on the amount of work involved but will never exceed CI$492.00/US$600.00, this being the maximum fee for the issue of a Safe Manning Certificate and a Certificate will be valid for five years.

Officers' licences

All officers in charge of a watch are required to hold valid qualifications appropriate to their rank and issued by an EC or NATO country or a Commonwealth equivalent. Queries concerning qualifications may be emailed to the Marine Survey Department at crew.compliance@cishipping.com. Under Cayman Islands legislation only the Master, Chief Officer and Chief Engineer are required to hold licences issued by the Cayman Islands. Each officer's licence costs CI$246.00/US$300.00 and the licence will remain valid for so long as the STCW endorsement remains valid.

APPLICATION FOR A SHIP RADIO STATION LICENCE

Application in the Cayman Islands is made to the Information and Communications Technology Authority (the "Authority"), Grand Cayman. The following should be submitted along with the covering letter to the Authority:

1. Form of Application for Maritime Mobile Radio Station licence (ICTA Form L (10 Mar 06)). This should be signed by a Director or permanent officer of the company (where appropriate).

2. Inspection Certificate. This should be a certificate, separate from the application form, given by someone who is qualified to inspect the radio equipment and certify that it is in sound working order (for vessels in excess of 300 tons, it is only necessary to submit a copy of the application to the Cayman Islands Marine Survey Department for an International Safety Radio Certificate).

3. Copy Radio Operators Certificate (or copy Certificate of Survey for Vessel).

4. Copy Certificate of Incorporation of Company.

5. Certified copy Resolution under seal confirming the appointment of the Director or permanent Officer of the Company.

6. Copy of the Certificate of British Registry when available.

7. Cheque in favour of the Authority (for correct fee, see application form – currently between CI$24.50/US$30.00 and CI$147.50/US$180.00 depending on the size of the vessel and whether it has an MMSI number or not).

NB If the CALL SIGN is not shown on the Certificate of Survey the applicant may telephone the Registrar of Shipping or submit a written request to him (tel: 345 949 8831, email: cisrky@cishipping.com). MMSI ("Mobile Maritime Service Identity") numbers for DSC ("Digital Selective Calling") are allocated by the Authority. The Authority may be contacted at licencing@icta.ky, website www.icta.ky.

INTERNATIONAL CONVENTION CERTIFICATES

Surveys required prior to the issue of Convention Certificates may proceed independently of registration. It is recommended arrangements be made to have ships surveyed contemporaneously with registration to ensure all the required certificates will be in order immediately registration procedures have been completed and thus avoid delays in entering operational service.

Certificates required for a passenger ship

1. A passenger ship safety certificate issued annually by the Cayman Islands Government.

2. A load-line certificate issued and endorsed annually by one of the seven approved classification societies.

3. An international oil pollution prevention certificate issued initially by the Cayman Islands Government and endorsed annually by the classification society or Cayman Islands Government.

4. A safe manning certificate issued by the Cayman Islands Government.

Certificates required for ships other than passenger ships, fishing vessels and pleasure craft

1. A safety equipment certificate issued by the Cayman Islands Government.

2. A radio certificate issued by the Cayman Islands Government.

3. A load-line certificate issued by one of the seven approved classification societies.

4. A cargo ship construction certificate issued by one of the seven approved classification societies.

5. An international oil pollution prevention certificate issued initially by the Cayman Islands Government and endorsed annually by the classification societies.

6. A safe manning certificate issued by the Cayman Islands Government.

Certificates required for fishing vessels and pleasure yachts of 400 tons gross or more

1. An international oil pollution prevention certificate issued initially by the Cayman Islands Government and endorsed annually by one of the seven approved classification societies.

SURVEYS

Application for any survey for a passenger ship safety certificate, safety equipment, radio and the initial IOPP should be made directly to the Marine Survey Department who will appoint a surveyor to conduct the survey wherever the ship may be. Surveys for load line, safety construction and interim IOPP endorsements may be arranged by the owner contacting the ship's classification society directly.

All surveys can be arranged at comparatively short notice by contacting the Marine Survey Department, 3rd Floor, Kirk House, George Town, Grand Cayman (tel: 345 949 8831) (fax: 345 946 7822) (email: cisrky@cishipping.com and survey@cishipping.com) but in view of time differences it is prudent to give at least 48 hours notice.

Footnote

1 Third Schedule countries are: Argentina, Austria, Australia, Bahamas, Bahrain, Barbados, Belgium, Bermuda, Brazil, British Virgin Islands, Canada, Denmark, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hong Kong, Iceland, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Liechtenstein, Luxembourg, Malta, Mexico, Netherlands, New Zealand, Norway, Panama, Portugal, Singapore, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, United Kingdom and United States of America.

Cayman Islands
Wayne Panton, Partner
Ian Ashman, Partner

London
David Whittome, Partner

Jersey
Heather Bestwick, Partner

British Virgin Islands
Heidi de Vries, Partner

Hong Kong
Hugh O'Loughlin, Partner

Dubai
Rod Palmer, Partner

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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