Once a ship has been registered under the Cyprus flag, a mortgage can be created thereby securing a loan or other financial obligations. Exchange control permission is not required. The mortgage can be in respect of any sum and in any currency. A mortgage can be registered either through the Registrar of Ships directly or (with the Registrar’s permission) through a Cyprus consulate or embassy abroad. Where several mortgages are registered in respect of the same ship, priority depends on the date on which each mortgage was recorded in the Register, with earlier mortgages ranking first. Every registered mortgagee has absolute power to dispose of the ship in enforcing his rights under the mortgage. In fact, it has always been the policy of the government to protect the rights of mortgages and make it as easy as possible for them to enforce their security. Where there are several registered mortgagees for the same ship, a later mortgagee may not, except by an order of a court of competent jurisdiction, sell the ship or share without the concurrence of every prior mortgagee. 7.1 The Register of Cyprus Ships Once a mortgage is created, it must be deposited (together with its respective deed of covenant) with the Registrar of Cyprus Ships or with a consular officer on the instructions of the Registrar. The mortgage is recorded thereafter in the Register as from the date and hour of its deposit and remains an encumbrance on the vessel until discharged by the mortgagees. A mortgage may be created whether the ship is provisionally or permanently registered. The creation of a mortgage under Cypriot laws is not allowed on vessels registered parallel-in in the Cyprus Register of Ships. If the ship on which a mortgage was created belongs to a Cypriot company, the mortgage will also have to be registered with the Registrar of Companies within a maximum period of 42 days after its creation. Registration protects the mortgagee’s security in the case of liquidation of the ship owning company. Transfer of a mortgage may be effected by completing the statutory form of transfer and submitting it to the Registrar of Cyprus Ships or to a consular officer. The fees payable on transfer are the same as those for the registration of the mortgage on the ship. 7.2 The Mortgage Deed The Cyprus mortgage is in the form of a Mortgage to secure an Account Current. It must be accompanied by a deed of covenant regulating all matters relating to the mortgage such as interest, repayment, insurances, events of default etc. Mortgage deeds are exempt from stamp duty. To discharge a mortgage, a memorandum of discharge must be duly executed by the mortgagee. It is then attested and delivered to the Registrar of Cyprus Ships or a consular officer on the instructions of the Registrar.
Once a ship has been registered under the Cyprus flag, a mortgage can be created thereby securing a loan or other financial obligations. Exchange control permission is not required. The mortgage can be in respect of any sum and in any currency. A mortgage can be registered either through the Registrar of Ships directly or (with the Registrar’s permission) through a Cyprus consulate or embassy abroad.
Where several mortgages are registered in respect of the same ship, priority depends on the date on which each mortgage was recorded in the Register, with earlier mortgages ranking first.
Every registered mortgagee has absolute power to dispose of the ship in enforcing his rights under the mortgage. In fact, it has always been the policy of the government to protect the rights of mortgages and make it as easy as possible for them to enforce their security. Where there are several registered mortgagees for the same ship, a later mortgagee may not, except by an order of a court of competent jurisdiction, sell the ship or share without the concurrence of every prior mortgagee.
7.1 The Register of Cyprus Ships
Once a mortgage is created, it must be deposited (together with its respective deed of covenant) with the Registrar of Cyprus Ships or with a consular officer on the instructions of the Registrar. The mortgage is recorded thereafter in the Register as from the date and hour of its deposit and remains an encumbrance on the vessel until discharged by the mortgagees. A mortgage may be created whether the ship is provisionally or permanently registered. The creation of a mortgage under Cypriot laws is not allowed on vessels registered parallel-in in the Cyprus Register of Ships.
If the ship on which a mortgage was created belongs to a Cypriot company, the mortgage will also have to be registered with the Registrar of Companies within a maximum period of 42 days after its creation. Registration protects the mortgagee’s security in the case of liquidation of the ship owning company. Transfer of a mortgage may be effected by completing the statutory form of transfer and submitting it to the Registrar of Cyprus Ships or to a consular officer. The fees payable on transfer are the same as those for the registration of the mortgage on the ship.
7.2 The Mortgage Deed
The Cyprus mortgage is in the form of a Mortgage to secure an Account Current. It must be accompanied by a deed of covenant regulating all matters relating to the mortgage such as interest, repayment, insurances, events of default etc. Mortgage deeds are exempt from stamp duty.
To discharge a mortgage, a memorandum of discharge must be duly executed by the mortgagee. It is then attested and delivered to the Registrar of Cyprus Ships or a consular officer on the instructions of the Registrar.