Ïòàøåí÷óê Îëåíà Ìèêîëà¿âíà
Þðèñò, ÀÑÊ «Óêðð³÷ôëîò»
Ì³æíàðîäíî-ïðàâîâ³ ïðîáëåìè ñó÷àñíîãî òîðãîâåëüíîãî ìîðåïëàâñòâà: Çá³ðíèê ìàòåð³àë³â ²² Ì³æíàðîäíî¿ íàóêîâî-ïðàêòè÷íî¿ êîíôåðåíö³¿ (12 ãðóäíÿ 2013 ð., ì. Êè¿â)/ Êè¿âñüêèé óí³âåðñèòåò ïðàâà ÍÀÍ Óêðà¿íè. – Âèï. 2. – Ê.: 2014.
Article 2 of the 1958 Convention on the High Seas (hereinafter referred as the 1958 Convention) provides the fundamental principle of the freedom of the high seas .
However, such unrestricted access to the high seas should not lead to any anarchy or abuse [5, 1]. In other words, all vessels using the high seas must possess a nationality that can be attributed to them by flying the flag of a State in which the vessel is publicly registered. A ship possessing no nationality (a stateless ship) or a ship that sails under flags of two or more States enjoys no protection in international law.
In other words, ‘international law looks to individual Flag State to ensure compliance with the rules it lays down for the exercise of the freedom of the high seas’ [10, 8]. For this purpose, every State may maintain registry in which the particulars of merchant vessels possessing its nationality and flying its flag are entered. One type of such registry is open registry.
Open registry has been called by different names: flag of convenience, flag of necessity, free flags, etc. There is no international legal definition of the open registries. Generally, they can be defined as ‘national flags flown by mercenary ships that have been registered in countries other than those of their owners in order to escape high domestic wages and taxation and stringent regulations on safety, manning, employment and related requirements’ [1, 75].
The common features of open registries are: allowance of non-citizens’ ownership and/or control of its merchant vessels, easy access to registry, absence or low taxes, manning of ships by non-nationals, lower crewing costs, less regulatory control, anonymity.
Importantly, the above description is not conclusive as requirements for registration under flag of convenience, it still varies from country to country. As early as in the Muscat Dhows case it was stated that ‘it belongs to every sovereign to decide to whom he will accord the right to fly his flag and to prescribe the rules governing such grants’ [6, 1]. However, to restrict such prerogative that eventually led to the reflagging of ships from the traditional maritime states and the consequent violation of the international obligations, the concept of ‘genuine link’ was introduced [11, 66].
The legal basis for this was the decision in the Nottebohm case, where the Court, describing nationality as ‘… a legal bond having as its basis a social fact of attachment, a genuine connection of existence, interests and sentiments, together with the existence of reciprocal rights and duties,’ noted that a substantive connection should exist between the individual and the State of his nationality . This judgment had a significant influence on the development of the ‘genuine link’ concept in the context of the nationality of ships. However, factors mentioned in the case in relation to an individual are irrelevant to a ship, as the link between a flag State and its ships should be of such a character as to allow it to maintain order on the high seas [4, 14].
The concept of the ‘genuine link’ as applied to the nationality of merchant ships is contained in international treaty law as well as in relevant international courts’ practice.
Before the 1958 Convention there was no earlier history of the use of this or similar terms in treaties dealing with ships nationality [4, 12].
Article 5 (1) of the 1958 Convention provides that ‘each State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are entitled to fly. There must exist a genuine link between the State and the ship; in particular, the State must effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag’. But exactly what is required to constitute a ‘genuine link’ is not entirely clear.
Instead, Article 10 of the 1958 Convention details such effective jurisdiction and control in the form that a Flag State has to conform to generally accepted international standards regarding the use of signals, the maintenance of communication and prevention of collisions, the manning of ships and labour conditions, the construction, equipment and seaworthiness of ships.
Article 6 (1) of the 1958 Convention provides that ‘a ship may not change its flag during a voyage or while in a port of call, save in the case of a real transfer of ownership or change of registry.’ This provision implies that a change of flag, in other words nationality, is not to be ‘undertaken lightly or casually, but only where there is a real transfer of ownership of the ship, suggesting that the new shipowner must have some real connection with the new State of nationality, or where there is a real change of registry, i.e. that there is some real connection with the new registry’ [4, 12-13].
The 1958 Convention contains no provisions dealing with the preconditions for the grant of nationality as well as the consequences that follow where there is no ‘genuine link’.
The concept of the ‘genuine link’ was further dealt within the IMCO case, where the Court stated that the phrase, ‘largest ship–owning nations’ in Article 28 of the Convention of the Intergovernmental Maritime Consultative Organization ‘depends solely upon the tonnage registered in the countries in question’ .
Remarkably, in this case only one of the dissenting judges, Judge Moreno Quintana, observed that ‘the ownership of a merchant fleet […] reflects an international economic reality which can be satisfactorily established only by the existence of a genuine link between the owner of a ship and the flag it flies’ . No other examination of the question of the ‘genuine link’ was involved in the discussion.
In addition, in the Barcelona Traction case Judge Jessup in his separate opinion proved once again that the concept of ‘genuine link’ was common to the nationality of people, ships and companies, and that ‘if a State purports to confer its nationality on ships by allowing them to fly its flag, without assuring that they meet such tests as management, ownership, jurisdiction and control, other States are not bound to recognize the asserted nationality of the ship’ .
The 1982 United Nation Convention on the Law of the Sea (hereinafter referred as the 1982 Convention) presents a considerable development in comparison with the 1958 Convention .
In this respect, it is important to note that although according to Article 311 of the 1982 Convention this Convention replaces the 1958 Convention as between parties to the former, the provisions of the 1958 Convention are still applied because a number States parties to the 1958 Convention, including the USA, have not yet become parties to the 1982 Convention .
The 1982 Convention provides that the link between a ship and its Flag State must be a real and not an artificial one, and that a State must be able to exercise effective control and jurisdiction over ships to which it has granted its nationality.
Article 91 of the 1982 Convention is identical to Article 5 of the 1958 Convention except for the omission of the phrase ‘in particular, the State must effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag.’ This phrase is found in Article 94 (1) of the 1982 Convention which elaborates the provisions of the Article 10 of the 1958 Convention, giving ‘further indication of the link between the flag State and ships flying its flag’ [7, 43].
Apart from this, Articles 217, 211 and 222 of the 1982 Convention require flag States effectively to enforce rules concerning pollution in respect of their ships that ‘corresponds to, and amplifies, the general statement of the powers and duties of the flag State in Article 94’ [7, 43]. The observance of the obligations concerned is relevant to the question of the existence of a ‘genuine link’ [7, 43]. Article 92, on the other hand, is identical to Article 6 of the 1958 Convention (the prohibition of a change of flag).
Like the 1958 Convention, the 1982 Convention does not define a priory criteria for establishing the existence of a genuine link, either does not state explicitly what is meant by a‘genuine link’ nor does it specify what consequences follow in the absence of such a link.
In addition, it is noteworthy to consider the St. Vincent and the Grenadines v. Guinea case that ‘provides the first instance of an international court pronouncing itself on certain aspects of the ‘genuine link’ [9, 58]. It was concluded that ‘the need for a genuine link between a ship and its flag State is to secure more effective implementation of the duties of the flag State, and not to establish criteria by reference to which the validity of the registration of ships in a flag State may be challenged by other States’ . And most importantly, the judgment affirms that the ‘genuine link’ is not a precondition for registration of a ship but serves to guarantee the effective exercise of jurisdiction and control of the flag state over the ship.
However, there is still‘no consensus among either States […] as to what is meant by a genuine link or as to the consequences that follow from its absence’ [4, 4].
In this respect, the 1986 United Nations Convention on Conditions for Registration of Ships (hereinafter referred as the 1986 Convention) claims that for the first time an international instrument defines the elements of the ‘genuine link’ that should exist between a ship and the State whose flag it flies [11, 112].
Articles 8, 9 and 10 of the 1986 Convention, inter alia, provide for participation by nationals of the Flag State in the ownership, manning and management of ships, establishing the ‘genuine link’ between a ship and a Flag State. A distinctive feature is that in accordance with Article 7 of the 1986 Convention States have an option between the two mandatory articles on ownership and manning. This fact evidences the continuation of legalism and vagueness in the resolution of the ‘genuine link’ problem as an option on two elements served to weaken any international legal instrument.
In addition, Article 8 of the 1986 Convention marked no departure from either the 1958 Convention or the 1982 Convention. This article either does not provide for elements of ownership, leaving their determination up to the flag state.
Article 9 of the 1986 Convention, on the other hand, expressly stipulates that the State of registration shall ensure that the manning and the conditions of employment are in conformity with applicable international rules and standards, in particular those regarding safety at sea. However, an option provided in Article 7 makes such technical and safety standards of vessels no longer the major obstacles. Moreover, even if a decision of the government is made in favour of Article 9 the problem will not be solved as the article deals with only limited issues of the ‘genuine link’ concept.
Article 10 of the 1986 Convention with respect to management is also considered significant in the scope of the application of the Convention. However, like Article 9, it deals with only issues peripheral to genuine link such as regulatory and technical aspects.
Remarkably, Article 4 of the 1986 Convention is word-by-word identical to Articles 4-6 of the 1958 Convention and Articles 90-92 of the 1982 Convention. In addition, the 1986 Convention leaves out the equivalent Article 6 (2) of the 1958 Convention which was reproduced in Article 92 (2) of the 1982 Convention. Moreover, Article 94 of the 1982 Convention probably more than compensates for the lack of adequate provisions in the 1986 Convention on safety and jurisdictional requirements: especially Articles 8-11.
Finally, the whole draft of the 1986 Convention is rather vague due to the use of the words ‘adequate’, ‘appropriate’, ‘satisfactory’ and ‘sufficient’ in its text. In addition, the 1986 Convention makes the application of certain key provisions optional.
Nevertheless, it is expected that the 1986 Convention will enter into force when ratified by 40 States representing 25 per cent of relevant gross registered tonnage. However, up to date there are only 15 States Parties to the convention . The 1986 Convention is still not in force.
In other words, the conventional type of generalization does not have foundation and, even if it does, it is not proved right with time and practice. The 1986 Convention, undoubtedly still has not resolved the ‘genuine link’ issue. All these facts can be regarded as retrogressive development with regard to the ‘genuine link’ concept.