Unlike Norway, most states with competing ship registries allow bareboat registering in and out. Bareboat registration out means that a ship registered in a country’s ship register (the primary state) that is chartered out on a bareboat charter is temporarily bareboat-registered in the ship registry of another country (the bareboat state). Bareboat registration in means that a foreign-flagged vessel is temporarily bareboat registered in one's own country. Upon such bareboat registration, the title to the vessel, as well as all rights and encumbrances registered on the vessel, will remain registered in the primary state, while the bareboat state will assume all responsibility as the vessel’s flag state. Such bareboat charter in and out is common, one reason being that many countries require that certain vessels operating within their jurisdiction sail under local flag.

As the Ministry points out, the main purpose of the new proposal is to make the Norwegian ship registries more attractive and competitive. According to the Ministry, there is reason to believe that by allowing bareboat registration abroad, a decline in the number of permanent flagging-outs from the NIS and NOR would be seen. It should also be beneficial to persons with registered encumbrances on the vessel (such as mortgagees), who would no longer have to deal with several rounds of deletions and new registrations. As already mentioned, by allowing bareboat registration out, such encumbrances would remain registered in the ship registry of the primary state.

The Ministry has considered the guidelines from the International Chamber of Commerce and has suggested introducing the following minimum requirements:

  • The particular ship in question must be chartered on a bareboat charter under which the charterer assumes the full responsibility for vessel operation and management
  • The primary state must permit bareboat registration out and the bareboat state must permit bareboat registration in
  • The duration of the bareboat registration is limited to five years (with possible additional extensions) and requires the consent of the vessel owner and mortgagees
  • Both countries must recognise the primary state as having the exclusive responsibility for the protection of the registered title to the vessel and of any registered encumbrances
  • Flag-state jurisdiction must only be carried out by the bareboat state; this means that the vessel will be subjected to the rules and regulations of the bareboat state when it comes to vessel management, safety, manning and the environment

The deadline for providing comments on the proposal is 6 March 2018. Thereafter, the Ministry will prepare a proposition (White Paper) to be considered by the Norwegian Parliament. It is likely to take some time before a final proposal is enacted and implemented.