6.1 Options Cyprus law allows for parallel registration of vessels. Parallel registration is essentially a mechanism whereby the nationality of a vessel under bareboat charter is suspended for a period of time and during that period the vessel is registered under a different flag. There are two forms of parallel registration, parallel-in and parallel-out. Both these are internationally accepted forms of bareboat registration. The Registrar of Ships maintains a Special Book of Parallel Registration of the Cyprus Register. For parallel registration to be possible, the law of the foreign registry must be compatible with Cyprus. Today it is possible to effect parallel (bareboat) registration with more than 20 other states. Parallel registration is often used in shipping transactions involving leaseback and hire-purchase financing arrangements. The provisions regarding age limits as set out above also apply. 6.2 Parallel-in registration Parallel-in registration allows for a foreign flag vessel on bareboat charter to a Cyprus shipping company to be registered in parallel under the Cyprus flag. Parallel registration is subject to the prior approval of the Ministry of Communications and Works. It is effective for a period of 2 years, this period being renewable. The vessel is not deleted from the foreign register but, rather, that registration is suspended for the duration of the parallel-in registration. The foreign registry is operative only with respect to the ownership and encumbrance’s status of the vessel. (a) Application and documentation. The bareboat chartered will apply for the parallel-in registration. The Charterer must be a person (physical or legal) who is qualified under Cyprus law to own a Cyprus ship. The following documents are required: (i) Application to the Ministry of Communications and Works through the Registrar of Cyprus Ships requesting the parallel registration of the vessel. The application must be filed by a local lawyer acting on behalf of the bareboat charterer; (ii) if the bareboat charterer is a company rather than a physical person, copies of its memorandum and articles of association, certificate of incorporation, list of shareholders and directors, resolutions of the shareholders and directors authorizing the parallel-in registration of the vessel and, if a third person is to attend registration matters, the original of the power of attorney authorising that person; (iii) memorandum of appointment of ship’s husband; (iv) certificate of measurement of the vessel; (v) certified copy of the bareboat charter; (vi) certified written consent of the owner for the parallel-in registration; (vii) certified written consent of the mortgages, if any; (viii) written consent of the foreign registry with an official translation, if required; (ix) certificate of encumbrances from the foreign registry; (x) crew list; (xi) application for license to install and work a wireless telegraphy and/or telephony station on board the vessel; (xii) confirmation of class from the head office of a recognized classification society; (xiii) confirmation from a recognized radio traffic accounting authority that they will settle the ship’s radio maritime accounts; and (xiv) Confirmation from the master or from a recognized classification society as to the marking of the vessel. On registration, the Registrar will issue a Certificate of Cyprus Registry. (b) Tonnage and name of vessel. No new measurement for the tonnage of the vessel is required. The tonnage and survey certificates are issued on the basis of the corresponding documents of the foreign registry. The vessel may keep her name provided that no other ship on the Cyprus Registry is using the same name. However, the ship may change her name under the same rules applicable for provisional and permanent registrations. An application for the change of name is made by the bareboat charterer with the written consent of the ship-owner and any mortgages. The change must be notified to the foreign registry. (c) Status of vessel. Vessels under parallel-in registration must hoist the Cyprus flag and must not use the flag of the foreign registry. The port of registry marked on the stern must be LIMASSOL (LEMESOS) and not that of the foreign registry. Any transfer or ownership of a vessel under parallel-in registration must be according to the law of the foreign, and not the Cyprus, registry. The transfer is only notified to the Cyprus Registrar for entry in the Cyprus Register of Ships. Mortgages can only be created by the ship-owner and in accordance with the laws of the foreign registry and the Cyprus registrar will, again, be notified. Except for matters of ownership and encumbrances, all other matters in relation to the vessel are governed by Cyprus law. (d) Termination of the parallel-in registration. Termination can be effected in one of the following cases: (i) the foreign registry revokes its consent for the parallel-in registration, or; (ii) the bareboat charter is terminated, or; (iii) the period of time for which the Ministry has approved the parallel-in registration has lapsed, or; (iv) If the vessel was provisionally or permanently registered, there would exist any reason for its deletion under Cyprus law. Upon termination of the parallel-in registration, the vessel will be deleted from the Special Book of Parallel Registration of the Cyprus Register. 6.3 Parallel-out Registration Cyprus ships may be bareboat chartered to a foreign person or company and be registered in parallel in a foreign registry for the duration of the charter. This is called parallel-out registration. As with parallel-in registration, the laws of the Cyprus and the foreign registry must be compatible. This kind of registration is available to ships whether provisionally or permanently registered on the Cyprus Registry. Again, the prior consent of the Ministry of Communications and Works is required. Parallel-out registration allows for a ship to be mortgaged under the Cyprus flag while being registered in a foreign registry throughout the bareboat charter arrangement. (a) Application and documentation. Applications for parallel-out registration must be submitted by the owner to the Registrar of Cyprus Ships. The following documents must be submitted: (i) application for parallel-out registration made by a local lawyer; (ii) where the owner is a company, certified copies of the resolutions of the directors of the ship owning company resolving to bareboat charter the vessel and of the power of attorney if a third person is signing the bareboat charter on behalf of the owners; (iii) certified copy of the bareboat charter; (iv) certified written consent of the bareboat charterer to the parallel-out registration; (v) original certificate of the Cyprus Registry; (vi) written consent of the foreign registry confirming that the law allows for parallel-out registration with an official translation; (vii) certified written consent of the mortgagees, if any; (viii) confirmation from a recognized radio traffic accounting authority that they will continue to settle the vessel’s radio marine accounts; and (ix) common declaration by the ship-owner and the bareboat charterer undertaking that during the ship’s parallel registration: (A) Cyprus law will be respected; (B) The vessel will continue to meet the same requirements as regards compliance with international conventions even though the foreign state may not be a contracting party to those conventions; (C) Any changes to the name or other particulars of the vessel will be promptly notified to the Registrar of Cyprus Ships; and (D) The owner ensures that a certified copy of the certificate of parallel registration issued by the foreign registry will be deposited with the Registrar of Cyprus Ships within 1 month from the ship’s parallel registration. Upon payment of all the appropriate fees and once all the necessary documents have been filed, the Registrar may allow the parallel-out registration for a period up to 3 years. This may be renewed. The Cypriot nationality of the vessel is suspended and the Cyprus certificate of registration must be delivered to the Registrar of Cyprus Ships. Unless the Minister withdraws his approval for the parallel-out registration or the foreign registry its consent, the parallel-out registration remains in force for the duration of the charter party. When the registration is terminated, the Cypriot certificate of registration is returned to the ship-owner. (b) Status of vessel. Cypriot vessels registered parallel-out must hoist the flag of the foreign registry and cannot use the Cyprus flag. The port of registry marked on the stern of the vessel must be that of the foreign registry. Same as with parallel-in registration, transfers of ownership and any transactions affecting mortgages are governed by Cyprus law. The Registrar will notify the foreign registry of any such changes. All other matters are dealt with by the foreign registry.
6.1 Options
Cyprus law allows for parallel registration of vessels. Parallel registration is essentially a mechanism whereby the nationality of a vessel under bareboat charter is suspended for a period of time and during that period the vessel is registered under a different flag. There are two forms of parallel registration, parallel-in and parallel-out. Both these are internationally accepted forms of bareboat registration. The Registrar of Ships maintains a Special Book of Parallel Registration of the Cyprus Register.
For parallel registration to be possible, the law of the foreign registry must be compatible with Cyprus. Today it is possible to effect parallel (bareboat) registration with more than 20 other states. Parallel registration is often used in shipping transactions involving leaseback and hire-purchase financing arrangements.
The provisions regarding age limits as set out above also apply.
6.2 Parallel-in registration
Parallel-in registration allows for a foreign flag vessel on bareboat charter to a Cyprus shipping company to be registered in parallel under the Cyprus flag. Parallel registration is subject to the prior approval of the Ministry of Communications and Works. It is effective for a period of 2 years, this period being renewable.
The vessel is not deleted from the foreign register but, rather, that registration is suspended for the duration of the parallel-in registration. The foreign registry is operative only with respect to the ownership and encumbrance’s status of the vessel.
(a) Application and documentation. The bareboat chartered will apply for the parallel-in registration. The Charterer must be a person (physical or legal) who is qualified under Cyprus law to own a Cyprus ship. The following documents are required:
(i) Application to the Ministry of Communications and Works through the Registrar of Cyprus Ships requesting the parallel registration of the vessel. The application must be filed by a local lawyer acting on behalf of the bareboat charterer;
(ii) if the bareboat charterer is a company rather than a physical person, copies of its memorandum and articles of association, certificate of incorporation, list of shareholders and directors, resolutions of the shareholders and directors authorizing the parallel-in registration of the vessel and, if a third person is to attend registration matters, the original of the power of attorney authorising that person;
(iii) memorandum of appointment of ship’s husband;
(iv) certificate of measurement of the vessel;
(v) certified copy of the bareboat charter;
(vi) certified written consent of the owner for the parallel-in registration;
(vii) certified written consent of the mortgages, if any;
(viii) written consent of the foreign registry with an official translation, if required;
(ix) certificate of encumbrances from the foreign registry;
(x) crew list;
(xi) application for license to install and work a wireless telegraphy and/or telephony station on board the vessel;
(xii) confirmation of class from the head office of a recognized classification society;
(xiii) confirmation from a recognized radio traffic accounting authority that they will settle the ship’s radio maritime accounts; and
(xiv) Confirmation from the master or from a recognized classification society as to the marking of the vessel.
On registration, the Registrar will issue a Certificate of Cyprus Registry.
(b) Tonnage and name of vessel. No new measurement for the tonnage of the vessel is required. The tonnage and survey certificates are issued on the basis of the corresponding documents of the foreign registry.
The vessel may keep her name provided that no other ship on the Cyprus Registry is using the same name. However, the ship may change her name under the same rules applicable for provisional and permanent registrations. An application for the change of name is made by the bareboat charterer with the written consent of the ship-owner and any mortgages. The change must be notified to the foreign registry.
(c) Status of vessel. Vessels under parallel-in registration must hoist the Cyprus flag and must not use the flag of the foreign registry. The port of registry marked on the stern must be LIMASSOL (LEMESOS) and not that of the foreign registry.
Any transfer or ownership of a vessel under parallel-in registration must be according to the law of the foreign, and not the Cyprus, registry. The transfer is only notified to the Cyprus Registrar for entry in the Cyprus Register of Ships. Mortgages can only be created by the ship-owner and in accordance with the laws of the foreign registry and the Cyprus registrar will, again, be notified. Except for matters of ownership and encumbrances, all other matters in relation to the vessel are governed by Cyprus law.
(d) Termination of the parallel-in registration. Termination can be effected in one of the following cases:
(i) the foreign registry revokes its consent for the parallel-in registration, or;
(ii) the bareboat charter is terminated, or;
(iii) the period of time for which the Ministry has approved the parallel-in registration has lapsed, or;
(iv) If the vessel was provisionally or permanently registered, there would exist any reason for its deletion under Cyprus law.
Upon termination of the parallel-in registration, the vessel will be deleted from the Special Book of Parallel Registration of the Cyprus Register.
6.3 Parallel-out Registration
Cyprus ships may be bareboat chartered to a foreign person or company and be registered in parallel in a foreign registry for the duration of the charter. This is called parallel-out registration. As with parallel-in registration, the laws of the Cyprus and the foreign registry must be compatible. This kind of registration is available to ships whether provisionally or permanently registered on the Cyprus Registry. Again, the prior consent of the Ministry of Communications and Works is required.
Parallel-out registration allows for a ship to be mortgaged under the Cyprus flag while being registered in a foreign registry throughout the bareboat charter arrangement.
(a) Application and documentation. Applications for parallel-out registration must be submitted by the owner to the Registrar of Cyprus Ships. The following documents must be submitted:
(i) application for parallel-out registration made by a local lawyer;
(ii) where the owner is a company, certified copies of the resolutions of the directors of the ship owning company resolving to bareboat charter the vessel and of the power of attorney if a third person is signing the bareboat charter on behalf of the owners;
(iii) certified copy of the bareboat charter;
(iv) certified written consent of the bareboat charterer to the parallel-out registration;
(v) original certificate of the Cyprus Registry;
(vi) written consent of the foreign registry confirming that the law allows for parallel-out registration with an official translation;
(vii) certified written consent of the mortgagees, if any;
(viii) confirmation from a recognized radio traffic accounting authority that they will continue to settle the vessel’s radio marine accounts; and
(ix) common declaration by the ship-owner and the bareboat charterer undertaking that during the ship’s parallel registration:
(A) Cyprus law will be respected;
(B) The vessel will continue to meet the same requirements as regards compliance with international conventions even though the foreign state may not be a contracting party to those conventions;
(C) Any changes to the name or other particulars of the vessel will be promptly notified to the Registrar of Cyprus Ships; and
(D) The owner ensures that a certified copy of the certificate of parallel registration issued by the foreign registry will be deposited with the Registrar of Cyprus Ships within 1 month from the ship’s parallel registration.
Upon payment of all the appropriate fees and once all the necessary documents have been filed, the Registrar may allow the parallel-out registration for a period up to 3 years. This may be renewed. The Cypriot nationality of the vessel is suspended and the Cyprus certificate of registration must be delivered to the Registrar of Cyprus Ships. Unless the Minister withdraws his approval for the parallel-out registration or the foreign registry its consent, the parallel-out registration remains in force for the duration of the charter party. When the registration is terminated, the Cypriot certificate of registration is returned to the ship-owner.
(b) Status of vessel. Cypriot vessels registered parallel-out must hoist the flag of the foreign registry and cannot use the Cyprus flag. The port of registry marked on the stern of the vessel must be that of the foreign registry.
Same as with parallel-in registration, transfers of ownership and any transactions affecting mortgages are governed by Cyprus law. The Registrar will notify the foreign registry of any such changes. All other matters are dealt with by the foreign registry.