The “Genuine link” Concept: Is It Possible to Enhance the Strength?

Abstract

The article focuses on ways and means of strengthening the real connection between a ship and a state of registration. The author emphasizes the prerequisites, the conditions, and the consequences of the registration of seagoing ships in the alternative registries. He notes the complex nature of the genuine link and criticize the consideration of the registration of ships in states as activities aimed exclusively at generating income. The author considers public and private aspects of the registration of ships, its functions, and some mechanisms for preventing violations related to the link between a state of registration and a ship”. The negative impact of open registers and flags of convenience on genuine link strengths arises from the business approach to the choice of jurisdiction adopted both of shipowners and “convenient” registers. Thus, “convenient registers” view relaxation of requirements as a specific service that they provide and as a competitive advantage against other registers. ISSN 2524-101X eISSN 2617-541X 66 LEX PORTUS VOL 7 ISS 6 2021 The issue can be mitigated by coordinating steps taken by international maritime organizations and port states. The author notes the weakness of the steps taken to strengthen the genuine link, the inefficiency of norms of the international agreements in this sphere, assess the proposed mechanisms for strengthening it, and note the need to toughening control within the limits of the inspection according to the procedures of the Port State Control. The keywords: genuine link, flag state, “flags of convenience”, jurisdiction, pollution, prevention, open register, port state, coastal state, Port State Control. Introduction The genuine link between a ship and a state of registration is the main element of the principle of freedom of navigation. There is no precise definition of what is meant by the genuine link in the Conventions of 1958 and 1982. Its objectives and purpose emerge from the obligations of a flag state enumerated in article 10 of the Convention on the High Seas and article 94 of the UNCLOS’82. It should be noted that the genuine link was originally intended as an economic and a social connection between the owner of a ship and a state of registration (D’Andrea, 2006, p. 1), and was not limited to only one fact of entering ships in the register. The legal significance of the registration of sea-going merchant ships is reduced to two instants: public and private. In the first case, the registration accurately reflects the actual and the legal situation of the national merchant fleet, in the second – serves to ensure public control over transactions made with ships (Kokin, 2008, p. 5). Despite being enshrined in the global international treaties, the genuine link does not work correctly today. It is “eroded”, its significance is distorted, and questions about its presence and effectiveness arise mainly in situations involving significant violations in the sphere of marine activities (IUU fishing, accidents, pollution). This is due to the “broad” practice of the alternative ship registers and “flags of convenience” (FoC) of their states. Studies of FoC attractiveness primarily suggest economic considerations; so far, such countries have comparably easy and quick processes of registration, lax tax regulations, no minimum wage or less 67 LEX PORTUS VOL 7 ISS 6 2021 minimum wage for crews, lack of ship maintenance regulations, weak regulations on labor and environmental laws, and lack of infrastructure in vessel monitoring, control, and surveillance capacity (Petrossian et al., 2020). The latter makes FoC attractive, not merely for economic reasons but also for performing different illegal activities, from avoiding shipping regulations to criminal activities such as smuggling or human trafficking. Although the Convention on the Conditions for the Registration of Ships was adopted 35 years ago, the prospects for its entry into force are still vague. At the same time, the complicated problem arises of finding the ultimate beneficial owners of ships participating or becoming the causes of offenses and finding ways to compensate for the caused damage – the problem of strengthening the genuine link, ensuring its strength. Methodology The article analyses the practice of weakening the genuine link between a ship and its registration state and searches for ways to strengthen it and increase efficiency. The first part of the article describes the modern concept of the genuine link and defines causes and conditions of deviation from the requirements of its ensuring. The authors consider the essence and the criteria of the genuine link, note its complexity, and criticize profit-making as sometimes the only aspect of registration formalities. The second part of the article deals with the right of interference in navigation, classifies the public and private legal aspects of the registration of ships. The third part of the article is devoted to finding solutions to strengthen the genuine link between a ship and a state of registration to counter sea pollution. 1. The genuine link: essence, criteria, deviations The registration of ships exists, with some differences, in almost all modern states, both coastal and landlocked, which is regarded as 68 LEX PORTUS VOL 7 ISS 6 2021 a form of state supervision of ships. States utilize the registration when ships have the right to sail under a state flag to overview their number, compliance with national legislation on alienation and transfer as security, safety standards, and other rules in the sphere of navigation (Shuibao, 2020, p. 10). The special literature recognizes that the registration of ships and rights on them is an “important state function” (Georgiev, 2008). The ship’s registration in one or another state implies the genuine link between them. The norms of the UNCLOS’82 on the genuine link – are the most common standards for acceding states, which at their discretion develop a mechanism for implementing and complying with these standards1 (part 1 of article 91 of the UNCLOS’82). The fulfillment of the duties of a flag state indicated in Article 94 of the UNCLOS’82 is the realization of the genuine link between it and a ship listed in its register. Moreover, the genuine link between a ship and a flag state should be ensured in any case: by the registration, both mainly and in the alternative registers. At the same time, the UNCLOS’82 does not contain any instructions on this matter and does not imply the existence of several registers of the ships. According to Negret (2016, p. 27), the above-mentioned economic and social connections arising from the registration, , can combine the following aspects: 1) the shipowner’s fleet contributes to the national economy of the open registry; 2) the open registry nationals are employed on the ships; 3) the shipowner has a base of operations (i.e. offices and land-based employees) in the open registry country; 4) the ships periodically visit the ports of the open registry nation. The author reasonably assumes the complex character of the genuine link. At the same time, profit from the registration or the flag state’s discharges of its duties towards registered ships as the primary and sometimes the only significance of the registration 1 The separate document was planned to adopt to concretize the international rules for the vessels’ registration further. 69 LEX PORTUS VOL 7 ISS 6 2021 cannot be recognized as the main one. Especially it is in the sense of article 94 of the UNCLOS’82. Of course, because of attracting shipowners, additional revenues from the country’s budget will be easier conditions of the registration, but this cannot and should not be the primary purpose of their registration. In addition, the registration of ships cannot be a revenue-generating activity at all. Furthermore, the established registration fees should provide exclusively for the administrative expenses of registering ships and maintaining a staff of registration service. In the separate opinion, attached to the decision of the United Nations International Court of Justice on the case “Barcelona Traction”, 1970, judge F. Jessup pointed out that the concept of “the genuine link” connected with the citizenship of the individual and corporation. Regarding the nationality of the ship, F. Jessup believed that it could be established by assessing the presence or absence of such elements as management, ownership, jurisdiction, and control (Separate opinion of judge Jessup, p. 188). The relatively “soft” nature of the norms of the UNCLOS’82 and its predecessor, the Convention on the High Seas 1958, on the genuine link, has led to the proliferation of the practice of FoC. In addition, at the end of the 20th century, the international (“second”, “open”, “alternative”, or “parallel”) ship registries with special, simplified rules of registration were created in the traditional maritime states. This measure resulted from the search for a compromise option, designed to deter domestic shipowners from transferring ships from national jurisdiction to economically more attractive open registers of “convenient flag” countries. They have emerged as a means of introducing a more flexible than national registration system for ships engaged in the international merchant navigation (Grejner, 2003, p. 16). The FoC is a phenomenon that does not have a clear legal definition but exists and has been recognized by all states of the world for more than one decade. The International Federation 70 LEX PORTUS VOL 7 ISS 6 2021 of Transport Workers uses the term “flag of convenience” most actively. ITF introduced this term into its official documentation agreements) (Flags of convenience; ITF agreements). From the ITF perspective, the identification of FoC is a trifold judgment demanding to consider such factors as the number of foreign-owned vessels, the social record for human and trade union rights, and the safety and environme