Recently, the Ministry of Transport released The Method of the People’s Republic of China Governing the Registration of Ships (hereinafter referred to as the Method) which is due to take effect on February 10, 2017. The Method is in fact an amendment to the Regulations of the People’s Republic of China Governing the Registration of Ships (hereinafter referred to as the Regulations). It collects the relevant requirements of other regulating documents on ship registration, and specifies the requirements proposed by the State Council in 2016, while making innovations in the registration of international ships in Free Trade Zones (FTZ).

Registration now open to foreign ship companies

The Method defines that Chinese enterprises, of which foreign share is more than 50%, can still apply for the registration of their pontoons and floating docks which are used internally but not for waterway transport. The Regulations restricts the registration of any ships from enterprises with a foreign investment of more than 50%, in order to protect the sovereignty of domestic coastal transport. In fact, the internal use of pontoons and floating docks owned by such enterprises has nothing to do with the right of coastal transportation and causes no threat to waterway transport. According to industrial insiders, the widened inclusion does not go against the principle of the Regulations, but can satisfy the diverse needs of a service-oriented market.

In addition, to adapt to the innovativeness of FTZs, the Method is applicable to all the ships owned by enterprises registered in FTZs.

Convenience ship registration services upgraded again

The innovation of the Method is not only about the lifted restrictions on the foreign share of ship companies, but also about improved convenience practices borrowed from other countries and regions such as online application of information systems, optimized processing procedures, and shortened handling duration. In the future, FTZ maritime authorities will provide “one-stop” services.

In the wake of economic development, there is a constant emergence of enterprises with many branches. In such context, the financial leasing of ships is also in a boom. But the practice of single-site registration has caused many trifles and inconveniences for the management and use of ships among enterprise branches and the registration management of ships in financial leasing. In particular, the asynchrony between the actual operating sites of ships and their home ports is an extra burden for companies and maritime authorities.

Thanks to informatization, currently in China, ship registration information has been digitalized and put online in sharing with other systems. The Method adds an option to choose the registration site of ships. That is to say, companies are entitled to register their ships at the locations of operating branches. Meanwhile, in financial leasing of ships, the leaser or the lessee can reach an agreement to register leased ships at the domicile or the location of the main business site of either side.

It means that companies have the right to register the locations of their branch offices as the home ports of ships and no longer have to ask for special approval from maritime safety administrations.

Before, the Ministry of Transport issued new regulations that within a certain range, foreign ship registry companies are allowed, on the basis of approval, to conduct the classification of China flag international navigation ships registered at FTZs. The aim was to address the increasing needs in the register of ships and consequently improve efficiency and avoid suspensions and losses caused by repeated registers.

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