Baltics hope to domicile German vessels

Dec 12, 2002
Thomas Foulquier

The German Shipowners Association has announced it is planning to re-register many of its ships in the Baltic states.

Coming on a wave of intense pressure following the Prestige disaster off the coast of Spain, up to 50 German-owned vessels currently flying convenience flags could soon be re-registered in Lithuania and Latvia, according to preliminary reports.

Registration of the German ships, 30 of which were built less than 10 years ago, will be handled by ADG Shipmanagement GmbH.

Stanislav Smulans, head registrar of the Latvian Ship Register, confirmed to The Baltic Times that he had been contacted by Alexandros Dudarev, a ADG Shipmanagement representative

Smulans said that a meeting had been arranged to discuss registration of ships on a case-by-case basis. Smulans stressed that the Latvian Ship Register had to be circumspect with ships formerly registered in any of the convenience flag countries.

Dudarev told the daily Business & Baltija that the decision to re-register ships in the Baltics was not only based on political but also financial reasons.

He said that Lithuania was the favored candidate to domicile German ships, which if it were to proceed would create about 2,000 new jobs.

According to Dudarev, the Lithuanian sailors' trade union agreement on crew wages had an influence on ADG Shipmanage-ment's choice. The agreement is said to allow German shipowners to lower base wage rates by 20 percent - 25 percent.

As far as Latvia, Dudarev, who owns 10 out 50 ships himself, said, "If Latvian wages are approved on the same level, part of the ships will also fly its flag."

Whether Latvia would benefit from such a development remains open to debate.

Any policy of welcoming former convenience flag ships could possibly ruin efforts by the Maritime Administration of Latvia to comply with international safety standards and improve the reputation of the Latvian flag.

Established in 1994, MAL maintains functions covering all aspects of maritime safety and environmental protection, including the Latvian Ship Register and the Latvian Seamen's Register.

MAL's work has been recognized at the international level.

In fact, the last EU report on Latvia's progress toward accession released last October detailed Latvia's maritime safety improvement efforts. The report stressed that the percentage of vessels under the Latvian flag detained after port control was 5 percent in 2001, according to the Paris Memorandum of Understanding, one of the world's leading port inspection authorities.

The figure for EU-flagged vessels was 3.14 percent in 2001.

This is a clear contrast to 1997 - 1998, when the memorandum blacklisted Latvia, preventing the country from joining both the European Union and Paris Memorandum of Understanding.

According to officials, the quality improvement of registered ships was in direct relation to the number of registrations.

The Latvian Ship Register contained 505 ships in August 2002, according to figures given by the director of the Maritime Administration of Latvia. In January 2001, by contrast, 530 ships were registered.

Larger shipping companies, including the Latvian Shipping Company (Lasco), prefer to register their ships under convenience flags for financial reasons.

Although tax laws dealing with marine business in Latvia have been revised, this has not resulted in an increase in quantity of ships being registered.

Were Latvia to accept a deal with German shipowners, its ship registration numbers would go up, just as well as its detention rate likely would.

The German Shipowners Association seems to be leaning toward a significant re-registration, as its president, Ulrich Glant, visited Riga and Tallinn before going to Moscow last week.

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