Bareboat Charter Registration
Parallel Registration
Options
Under Cypriot legislation parallel (bareboat) registration of
vessels is possible. The legislation provides for the two forms
of internationally accepted bareboat registration: ‘Parallel-in’
registration and ‘Parallel-out’ registration.
These two options offer some very interesting opportunities for
leaseback, hire purchase and finance arrangements.
The administrative practice of the Department of Merchant Shipping has confirmed that the parallel (bareboat) registration of vessels under the Cyprus regime may be effected with more than 20 states whose legislation is compatible with Cypriot legislation.
Parallel-in Registration
This form of registration offers the possibility to a foreign flag vessel on bareboat charter to a person (legal or physical, qualified to own a Cyprus vessel) to be registered in ‘parallel’ under the Cyprus flag for a period, usually 2 years, which is renewable. Approval has to be obtained from the Minister of Communications and Works.
Under this type of registration, the deletion of the registration in the foreign register is not required, but the foreign nationality is suspended and the foreign registry is operative only with respect to the ownership and encumbrances status of the ship.
The law of the country of the foreign registry must allow the parallel registration of the ships registered in its register.
Age Limit
The Government policy on the age limit of vessels which may be registered in the Register of Cyprus Ships (see Registration of Ships) is applicable to the parallel-in registration of vessels.
Application and Documentation
The application for the parallel-in registration of a vessel is submitted by the bareboat charterer who must be a person (legal or physical) qualified to own a Cyprus ship under the Cypriot merchant shipping legislation (see relevant section: Condition of Ownership). The following documents must be submitted to the Registrar of Cyprus Ships for this purpose:
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application for parallel-in registration by a local lawyer acting on behalf of the bareboat charterer, to the Minister of Communications and Works through the Registrar of Cyprus Ships, requesting the parallel registration of the vessel in the Register of Cyprus Ships; |
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memorandum and articles of association of the company (bareboat charterer); |
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certificates of incorporation, directors and secretary, shareholders and registered office of the Cypriot company; |
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resolutions of directors of the company resolving to bareboat charter the vessel and register her parallel-in in the Register of Cyprus Ships; |
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power of attorney under the common seal of the company, if there is a need to authorise a third person to attend matters in relation to the parallel registration; |
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Appointment of Authorised Representative* |
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certificate of measurement of the vessel; |
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certified copy of the bareboat charter party; |
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certified written consent of the owner for the parallel-in registration; |
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certified written consent of the mortgagees, if any; |
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written consent of the foreign register with an official translation; |
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certificate of encumbrances from the foreign register; |
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Registration of a Mobile Maritime Radio Station (MS.34). |
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Registration of SAR particulars (M.S.45)** |
* In the case of a corporation established in the European Union or the European Economic Area
** Does not apply to non convention ships
The following information must (where applicable) also reach the Registrar of Cyprus Ships:
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confirmation of class from the head office of a recognised classification society; |
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confirmation from a recognised radio traffic accounting authority that they will settle the ship’s radiomaritime accounts; |
Tonnage and Name of the Vessel
For the parallel-in registration, a new measurement of the tonnage of the vessel is not required.
The Certificate of Survey and the Tonnage Certificate are issued on the basis of the corresponding documents of the foreign registry. Ships registered parallel-in may keep the name of the foreign registry, but this name must not be the same as the name of a ship already registered in the Register of Cyprus Ships. Ships registered parallel-in may change their name under the same conditions as those applicable to Cyprus ships registered provisionally or permanently. In such cases, the application must be made by the bareboat charterer with the written consent of the shipowner and of the mortgages and the submission of the Master´s confirmation as to the change of name. The change of name must be notified to the foreign registry.
Certificate of Cyprus Registry
After receipt of all the documents set out above and provided the appropriate fees have been paid, the Registrar of Cyprus Ships will proceed with the parallel-in registration of the vessel in the Special Book of Parallel Registration of the Cyprus Register and the issue of the Certificate of Cyprus Registry (form MS.4A).
Status of Vessels Registered Parallel-in
Vessels registered parallel-in in the Register of Cyprus Ships must hoist the Cyprus flag and are not allowed to use the flag of the country of the foreign registry. The port of registry marked on the stern of the ship must be LIMASSOL (LEMESOS) and not that of the foreign registry.
The transfer of ownership of a vessel registered parallel-in in the Special Book of Parallel Registration of the Cyprus Register is effected in accordance with the law of the foreign register and not in accordance with the provisions of the Cypriot merchant shipping legislation. The transfer of ownership is only notified to the Registrar of Cyprus Ships who will make the necessary changes in the Certificate of Cyprus Registry. Mortgages are created only by the shipowner, and in accordance with the law of the country of foreign register in which they shall be recorded. The constitution of such mortgages and other encumbrances is only notified to the Registrar of Cyprus Ships. Except for matters relating to the transfer of ownership and mortgages and other encumbrances, all other matters in relation to vessels registered parallel-in in the Cyprus Register of Ships are governed by the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 45/63 as amended.
The extension of the status of the parallel registration and the registration of the vessel parallel-in is allowed, so long as the prerequisite conditions according to the law applicable at the time of the initial registration continue to apply.
Termination of Parallel-in Registration
The termination of the status of a vessel registered parallel-in is effected in the following cases:
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where the foreign registry revokes its consent for the parallel-in registration in the Cyprus Register of Ships; |
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in case of termination of the bareboat charter; |
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upon the lapse of the period of time for which the Minister of Communications and Works has approved the parallel-in registration of the vessel; |
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if there exists any reason for deletion which, under the Cypriot merchant shipping legislation, applies in cases of ships provisionally or permanently registered in the Cyprus Register of Ships. |
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Upon such a termination the vessel is deleted from the Special Book of Parallel Registration of the Cyprus Register. |
Parallel-out Registration
Under the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 45/63 as amended, Cyprus ships may be bareboat chartered to a foreign person or company and registered ‘parallel-out’ in a foreign register for the duration of the charter party. This so called ‘Parallel-out’ registration allows the financing of a ship and her mortgaging under the Cyprus flag and her registration in a foreign registry through a bareboat charter arrangement.
The parallel-out registration of a Cyprus ship is possible if she is bareboat chartered to a foreign individual or corporation and the law of the country of the foreign registry allows the parallel registration of vessels of another registry, under prerequisite conditions similar to those set out for the parallel-in registration of ships in the Cyprus Register of Ships.
This type of registration is possible for Cyprus ships which are provisionally or permanently registered in the Cyprus Register of Ships. The parallel-out registration of a Cyprus ship must be approved by the Minister of Communication and Works.
Application and Documentation
The application for the parallel-out registration of a Cyprus vessel is effected by her owner. The following documents dully executed (where applicable) must be submitted to the Registrar of Cyprus Ships for this purpose:
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application for parallel-out registration by a local lawyer acting on behalf of the registered owner, to the Minister of Communications and Works through the Registrar of Cyprus Ships, requesting the parallel-out registration of the vessel; |
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resolutions of the directors of the shipowning company resolving to bareboat charter the ship |
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power of attorney if a third person is signing the bareboat charter party on behalf of the owners; |
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certified copy of the bareboat charter party; |
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certified written consent of the bareboat charterer for the parallel-out registration; |
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original certificate of Cyprus Registry; |
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written consent of the foreign registry confirming also that the law of the country allows the parallel registration of the Cyprus ship in its register with an official translation; |
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certified written consent of the mortgagees, if any; |
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confirmation from a recognised radio traffic accounting authority that they will continue to settle the vessel’s radiomaritime accounts; |
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common declaration by the shipowner and charterer that they undertake to produce to the Registrar within one month, a certified copy of the foreign certificate of parallel registration and to notify every alteration which takes place regarding the name or other particulars of the ship, during the period the status of parallel registration of the ship in the foreign register is in force. |
Approval of Parallel-out Registration
Provided that the appropriate fees have been paid and all the necessary documentation has been deposited with the Registrar of Cyprus Ships, the Minister of Communications and Works may allow the parallel-out registration of the vessel for a period not greater than 3 years. Such a period is renewable if the conditions imposed on first registration continue to apply. Upon the approval by the Minister of the parallel-out registration of the vessel, the Cypriot nationality of the vessel is suspended and the Cyprus Certificate of Registration must be delivered to the Registrar of Cyprus Ships.
Status of Vessels Registered Parallel-out
Cyprus vessels registered parallel-out must hoist the flag of the foreign registry and cannot use the Cyprus flag. Also, the port of registry marked on the stern of the vessel must be that of the foreign registry.
Transfers of ownership and any transactions affecting mortgages (i.e. creation, registration, transfer and discharge) on Cyprus ships registered parallel-out, are exclusively governed by Cypriot legislation and no action in relation to these matters may be taken by the foreign registry.
Entries made in the Register of Cyprus Ships regarding transfers of ownership or mortgages on Cyprus ships registered parallel-out, are only notified by the Registrar of Cyprus Ships to the foreign registry.
Termination of Parallel-out Registration
The status of the vessels registered parallel-out continues to be in force for the duration of the charter party, if the approval of the Minister and the consent of the foreign registry are in force, but in any case for a period not greater than 3 years, unless it is renewed. The Certificate of Cyprus Registry is returned to the shipowner as soon as the parallel-out registration is terminated.