A global maritime trade association has identified the Cayman Islands as one of the top “flag states” in the shipping industry, with the British overseas territory achieving positive marks in all 18 performance indicators, including benchmarks such as international agreements, use of recognised survey organisations and age of fleet.
The International Chamber of Shipping, which is the principal international trade association for shipowners, published its annual Flag State Performance Table of 111 jurisdictions. The Cayman Islands was among 13 jurisdictions obtaining 100 per cent positive marks, joining Denmark, France, Germany, Greece, Isle of Man, Japan, Liberia, Marshall Islands, Netherlands, Norway, Sweden and United Kingdom.
Cayman received positive marks due to appearing on three major “white lists” that cover international ports, which in turn has led the United States Coast Guard to recognise Cayman Islands-flagged ships under its Qualship 21 programme. Because Cayman has demonstrated that its ships have an excellent safety and pollution record, ships that fly the Cayman flag are required to undergo significantly fewer Port State Control inspections by the US Coast Guard while in American territorial waters.
Maritime Authority of the Cayman Islands CEO Joel Walton said, “Cayman has a thriving maritime industry due to the quality surveyors, administrators and the service providers to the industry, such as company managers and lawyers. It is our intention to build upon the successes that we have achieved and to continue to meet and exceed these international standards and continue to develop Cayman as an international maritime centre.”
Cayman also passed benchmarks such as having a relatively low average age of ships on the registry (11 years), meeting reporting requirements to regulatory bodies and attending major International Maritime Organisation meetings.
The recognition comes as the Maritime Authority marks the 110th anniversary of the formal establishment of the Cayman Islands Shipping Registry. In 1903, George Town was named as an official British Port of Registry. In April 1903, the ship “El Paso” became the first vessel to be recorded on the registry. In the early 1930s, sister ships “Lady Slater” and “CIMBOCO” were among the first locally built motor vessels to be placed on the registry. With a gross register tonnage of 274 (a measure of ship size according to volume), the “Lady Slater” would still qualify as a superyacht class vessel today.
For most of its history, the Cayman Islands Shipping Registry was used by locally built and locally owned vessels. However, as Cayman’s shipbuilding industry faded and the financial service industry boomed in practice and reputation, the territory’s shipping registry grew upon its ability to offer a stable, efficient and tax-neutral jurisdiction with modern maritime legislation, gearing itself toward vessels, particularly superyachts, that operate around the world. The shipping registry became a part of the Maritime Authority when the authority was formed in 2005.
The authority employs about 50 people in Cayman and the UK, and also has representation in 10 other countries.
Today, the shipping registry contains nearly 2,000 vessels with a combined gross register tonnage of 4 million. Mr. Walton said 85 per cent of the number of vessels are pleasure ships, and 15 per cent are commercial. Due to their relatively massive size, commercial vessels make up about 80 per cent of the tonnage on the registry.
More than 800 Cayman-flagged vessels are superyachts.
“We do target that market from the construction phase moving on through to the flagging stage. A significant portion of our revenues come from providing consultant services in the construction of large yachts,” Mr. Walton said.
The Cayman authority’s relationships with yacht builders and owners often results in the owners registering their vessels under the Cayman flag, due to their confidence in the authority’s technical competence and customer service – not just the territory’s tax-neutral policies.
“I keep coming back to technical excellence, technical competence, being able to reduce the ambiguity and bring clarity to global standards, bringing clarity to what we apply to our vessels. Being available to offer that advice and support in times of need,” Mr. Walton said. “If a Cayman-flagged vessel is detained in the Port of Shanghai, someone has to support that vessel. You just can’t leave it there.”