2.5 The amendments of 2020(1) There is a number of contributions to the problems relating to registration of bare boat charter parties. Regarding the situation in Norway some years back there is a still very informative contribution by Mats E. Sæther, Bareboat (“parallel-“) registrering av skip – i jus og praksis, Marius No. 297 (2003).
The background to the amendments in 2020 – finalized in an act of April 17 2020 No. 28 – are given and discussed in the travaux preparatoires.(2) Prop. 32 L (2019‑2020) and Innst. 148 L (2019‑2020). To the following, see in particular Prop. 32 L (2019‑2020) pp. 10‑11.
The main reason for bare boat registration is that from a commercial point of view it may be preferable for a vessel to sail under a particular flag – without the possibility of having the vessel registered in the relevant state in the traditional manner. In the hearing, previous to the 2020 amendment, it had been emphasized that, typically, this is a situation where the relevant state has a legal system that does not give sufficient security for those having ownership or legal rights in the vessel, or else that the relevant state has inadequate rules regarding the enforcement of claims.
Another reason for bare boat flagging-out is where the bare boat charterer has preferences relating to the flag of the vessel. Such out-flagging makes it possible for a Norwegian owner to charter out the vessel on terms satisfying the interests of the bare boat charterer, while at the same time securing the interests of the mortgagees, as their rights remain registered in the Norwegian register.
Furthermore, bare boat chartering may be used in order to obtain market access. Norwegian shipping interests have indicated that this is one of the main arguments for flagging out. One important factor in many cases is that operating costs (primarily crew costs) can be substantially reduced by having a non-Norwegian flag.
Regarding bare boat charters in a Norwegian register, the Norwegian shipping society has pointed out that this is of particular interest when banks require a Norwegian flag, or operators on the Norwegian shelf demands a Norwegian flag. Another possibility would be where a Norwegian shipping company bare boat charters a foreign registered vessel for service between Norwegian ports.
In the following, I shall discuss the consequences of the amendments; firstly with regard to flagging-in, as this topic is dealt with first in the Maritime Code (MC).(3) The Maritime Code of June 24 1994 No. 39.