Nicosia May 2012
Cyprus has throughout history been an important location for the shipping lanes of the Mediterranean. Furthermore the beneficial tax regime and ship register has made Cyprus one of the top jurisdictions for ship registration in the world. According to the statistics of the Department of Merchant Shipping of Cyprus, “the total fleet managed from Cyprus represents 20% of the world third–party ship-management market”. It is not surprising then that many ships under the Cyprus flag fall victim of the scourge of the seas, modern day pirates.
In recent years the seizure of vessels and detention of mariners under inhumane conditions including torture, injury and killings, for ransom payment claims on behalf of ship-owners for their release has increased dramatically, especially around the East coast of Africa. It has been estimated that the cost of Piracy in terms of International Trade during 2010 only, was estimated at 12 Billion American Dollars.
The Cyprus Government has followed other jurisdictions in preparing legislation to combat piracy on the high seas, mainly with the provision of specially trained and certified armed guards/escorts on the merchant vessel flying the flag of Cyprus.
The Department of Merchant Shipping of Cyprus in collaboration with other relevant authorities of Cyprus has prepared a draft Bill which has been approved by the Council of Ministers of Cyprus, on the 20th of April 2012.
The Cyprus Shipping Chamber has commented on the draft bill that “Cyprus will become the first country in the European Union, and possibly internationally, which will regulate in such detail this burning issue for International Shipping and in this way, it will further enhance its maritime infrastructure, as well as its image held today as a reliable and constantly developing Maritime Centre.”
The Draft Bill will be reviewed one final time by the Office of the Attorney General of Cyprus before being brought before the House of Representatives to enact it into law.
Cyprus Companies Providing Anti-Piracy Escorts
As explained above, due to the huge cost of piracy on mariners, goods and vessels, companies licensed under this new law will be able to provide a much sought service in what has become a very lucrative market. If we take the example of similar companies which have been set up under the laws of the United Kingdom and Greece, many ship-owning companies have immediately engaged their services.
Therefore, the market is there, what Cyprus offers over and above the jurisdictions mentioned previously is the beneficial tax regime and experienced service industry regime to administer such companies.
Focus Business Services (Cyprus) Limited together with its subsidiaries and affiliates can provide full set-up, licensing, legal, accounting, tax and audit services for companies to be set up under the new Anti-Piracy legislation.
Furthermore, our group has already registered companies engaged in the provision of security services to combat piracy in other jurisdictions, thus gathering expertise in this new industry, which will prove beneficial for potential clients wishing to set up a new company for the provision of maritime anti-piracy security services.
We keep regular updates on the outcome of the Draft Bill and will provide a detailed report as soon as it becomes Law.