Flying the Dutch flag: an overview of opportunities for ship owners

 September 30, 2019 | Blog
 
Flying the Dutch flag has unfortunately become less popular with ship owners over the past ten years. Although not all the reasons for this decrease in popularity are clear, in any event it appears that the presumption that flying the Dutch flag is limited by the location of the vessel's owner is one of them. In this blog, we discuss opportunities for ship owners to fly the Dutch flag – there are less restrictions than one might initially think.

A seagoing vessel is eligible for registration in the Netherlands and may fly the Dutch flag if the vessel has Dutch nationality under the Certificates of Registry Act ("CRA", Zeebrievenwet), and if the Dutch Human Environment and Transport Inspectorate ("Inspectie Leefomgeving en Transport") has confirmed Dutch nationality by issuing a nationality certificate.

On the face of it, only European ship owners are able to satisfy the requirements laid down for the nationality certificate, but in fact, there is much more scope for flying the Dutch flag. In this blog we outline the possibilities for owners registered in, inter alia, the British Virgin Islands, the Cayman Islands, Saint Pierre and Miquelon, to obtain a Dutch flag for their vessels without the need to have their headquarters or a secondary establishment in the Netherlands.   

Registration in the Dutch register
A seagoing vessel may only be registered in the Netherlands and obtain the Dutch flag if it qualifies as a Dutch vessel within the meaning of Article 311 of the Dutch Commercial Code ("Wetboek van Koophandel"). For registration in the Netherlands, four criteria are considered: (i) the owner's nationality, (ii) the owner's location, (iii) the manager's location, and (iv) the responsible person. In respect of these four criteria, the following requirements have to be met:

i. The owner's nationality: the ship is in the ownership of one or more:
-    natural persons which possess the nationality of an EU Member State, or of another state which is a party to the Agreement on the European Economic Area, of Switzerland, or natural persons who are EU-equated nationals;
-    companies and/or legal entities governed by the laws of an EU Member State, EEA Member State, Switzerland or one of the countries, islands or areas referred to in Article 299 (2-5, 6(c)) of the EC treaty; or          
-    individuals, companies or legal entities, other than those mentioned above, that can invoke EU law of freedom of establishment on the basis of a treaty between the EU and a third country; 
ii. The owner's location: the owner has its headquarters or a secondary establishment in the Netherlands;
iii. The manager's location: one or more individuals who have their office in the Netherlands are responsible, on behalf of the ship owner, for the ship, the master, the other crew members, as well as for all related matters, and who, either alone or together, have the power of decision and the power to represent the ship owner; and
iv. The responsible person: one or more individuals as mentioned above or, in their absence, a deputy, who is permanently available and has the power to act without delay if this is required (the ship's manager).

Instead of complying with requirements (ii), (iii) and (iv) itself, the owner of a vessel may appoint a ship's manager in the Netherlands. This manager also needs to be established in the Netherlands (headquarters or a secondary establishment) and needs to meet requirements (iii) and (iv). The manager is responsible for managing the vessel, and for the Dutch government it is important that the manager or representative is able to hand over the data relevant for the Dutch government to supervise the vessel.

The scope of the possibilities under requirement (i) is considerably broader than one might think. In particular, the reference to companies and entities established in countries, islands or areas referred to in Article 299 (2-5, 6(c)) of the EC treaty is of interest. The countries and geographic areas as referred to in Article 299 (3) of the EC treaty are not limited to the European territory, but include:

  • The British Virgin Islands;
  • The Cayman Islands;
  • Saint Pierre and Miquelon;
  • French Polynesia;
  • Anguilla; and
  • The Bermuda Islands.

This means that an owner duly established in one of these countries, islands or geographic areas may also obtain the Dutch flag for its vessel(s) provided that all other requirements of Article 311 of the Dutch Commercial Code are also met.

Bareboat Charter Register
In addition to entry in the Dutch register, owners of vessels can also opt to register their vessel in the Dutch bareboat charter register. Articles 2 and 3 of the Seagoing Ships under Bareboat Charter (Nationality) Act ("Wet nationaliteit zeeschepen in rompbevrachting") stipulate the requirements for registration of a vessel in the Dutch bareboat charter register and for obtaining the Dutch flag in accordance with the CRA. It is beyond the scope of this blog to discuss registration of the vessel in the bareboat register in detail. However, under Article 5 of the Seagoing Ships under Bareboat Charter (Nationality) Act, the vessel obtains Dutch nationality from the moment it is registered in the bareboat registry, even if it has been entered into another registry.

Conclusion
Reference to Article 299 of the EC treaty in Article 311 of the Dutch Commercial Code means that vessels owned by owners established in countries, islands or geographic areas as included in Annex II of the EC treaty can fly the Dutch flag. Owners have the possibility to transfer vessels with a Dutch flag to entities in these countries, islands or geographic areas without the vessels losing their Dutch flag. 

Legal advice or more information?

If you have any questions about this topic, please do not hesitate to contact Jan Kromhout or Céline Claessen.

 
Flying the Dutch flag has unfortunately become less popular with ship owners over the past ten years. Although not all the reasons for this decrease in popularity are clear, in any event it appears that the presumption that flying the Dutch flag is limited by the location of the vessel's owner is one of them. In this blog, we discuss opportunities for ship owners to fly the Dutch flag – there are less restrictions than one might initially think.

A seagoing vessel is eligible for registration in the Netherlands and may fly the Dutch flag if the vessel has Dutch nationality under the Certificates of Registry Act ("CRA", Zeebrievenwet), and if the Dutch Human Environment and Transport Inspectorate ("Inspectie Leefomgeving en Transport") has confirmed Dutch nationality by issuing a nationality certificate.

On the face of it, only European ship owners are able to satisfy the requirements laid down for the nationality certificate, but in fact, there is much more scope for flying the Dutch flag. In this blog we outline the possibilities for owners registered in, inter alia, the British Virgin Islands, the Cayman Islands, Saint Pierre and Miquelon, to obtain a Dutch flag for their vessels without the need to have their headquarters or a secondary establishment in the Netherlands.   

Registration in the Dutch register
A seagoing vessel may only be registered in the Netherlands and obtain the Dutch flag if it qualifies as a Dutch vessel within the meaning of Article 311 of the Dutch Commercial Code ("Wetboek van Koophandel"). For registration in the Netherlands, four criteria are considered: (i) the owner's nationality, (ii) the owner's location, (iii) the manager's location, and (iv) the responsible person. In respect of these four criteria, the following requirements have to be met:

i. The owner's nationality: the ship is in the ownership of one or more:
-    natural persons which possess the nationality of an EU Member State, or of another state which is a party to the Agreement on the European Economic Area, of Switzerland, or natural persons who are EU-equated nationals;
-    companies and/or legal entities governed by the laws of an EU Member State, EEA Member State, Switzerland or one of the countries, islands or areas referred to in Article 299 (2-5, 6(c)) of the EC treaty; or          
-    individuals, companies or legal entities, other than those mentioned above, that can invoke EU law of freedom of establishment on the basis of a treaty between the EU and a third country; 
ii. The owner's location: the owner has its headquarters or a secondary establishment in the Netherlands;
iii. The manager's location: one or more individuals who have their office in the Netherlands are responsible, on behalf of the ship owner, for the ship, the master, the other crew members, as well as for all related matters, and who, either alone or together, have the power of decision and the power to represent the ship owner; and
iv. The responsible person: one or more individuals as mentioned above or, in their absence, a deputy, who is permanently available and has the power to act without delay if this is required (the ship's manager).

Instead of complying with requirements (ii), (iii) and (iv) itself, the owner of a vessel may appoint a ship's manager in the Netherlands. This manager also needs to be established in the Netherlands (headquarters or a secondary establishment) and needs to meet requirements (iii) and (iv). The manager is responsible for managing the vessel, and for the Dutch government it is important that the manager or representative is able to hand over the data relevant for the Dutch government to supervise the vessel.

The scope of the possibilities under requirement (i) is considerably broader than one might think. In particular, the reference to companies and entities established in countries, islands or areas referred to in Article 299 (2-5, 6(c)) of the EC treaty is of interest. The countries and geographic areas as referred to in Article 299 (3) of the EC treaty are not limited to the European territory, but include:

  • The British Virgin Islands;
  • The Cayman Islands;
  • Saint Pierre and Miquelon;
  • French Polynesia;
  • Anguilla; and
  • The Bermuda Islands.

This means that an owner duly established in one of these countries, islands or geographic areas may also obtain the Dutch flag for its vessel(s) provided that all other requirements of Article 311 of the Dutch Commercial Code are also met.

Bareboat Charter Register
In addition to entry in the Dutch register, owners of vessels can also opt to register their vessel in the Dutch bareboat charter register. Articles 2 and 3 of the Seagoing Ships under Bareboat Charter (Nationality) Act ("Wet nationaliteit zeeschepen in rompbevrachting") stipulate the requirements for registration of a vessel in the Dutch bareboat charter register and for obtaining the Dutch flag in accordance with the CRA. It is beyond the scope of this blog to discuss registration of the vessel in the bareboat register in detail. However, under Article 5 of the Seagoing Ships under Bareboat Charter (Nationality) Act, the vessel obtains Dutch nationality from the moment it is registered in the bareboat registry, even if it has been entered into another registry.

Conclusion
Reference to Article 299 of the EC treaty in Article 311 of the Dutch Commercial Code means that vessels owned by owners established in countries, islands or geographic areas as included in Annex II of the EC treaty can fly the Dutch flag. Owners have the possibility to transfer vessels with a Dutch flag to entities in these countries, islands or geographic areas without the vessels losing their Dutch flag. 

Legal advice or more information?

If you have any questions about this topic, please do not hesitate to contact Jan Kromhout or Céline Claessen.

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