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Cyprus company formation package: 345 EURO – arrangement of Cyprus company formation (via officially licensed local member / partner firms) including VAT and Tax registration. "FBS KOTSOMITIS", operating since 1998, is a well-known and established international professional services network with officially licensed and regulated local member / partner firms. Contact us to start process by sending an email to enquiries@fbscyprus.com, by using our contact form or by calling at +357 22 456363
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The Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law of 2012

Nicosia, July 2012

Introduction

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 New Law

The Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law of 2012 (Law 77(I)/2012) has been published in the Official Gazette of the Republic No. 4339, Supplement I(I), of 15 June 2012 and is now in force.

The Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law of 2012 (the Law) has been designed to enhance the security of ships flying the Cyprus flag (Cyprus ships) whilst at sea and, inter alia, establishes the required legislative framework for permitting the use, in a regulated manner, of privately contracted unarmed and armed security personnel on board Cyprus ships when they are sailing through high risk areas such as the North West Indian Ocean or along the West coast of Africa in the Gulf of Guinea.

The scope of the new law goes beyond acts or attempted acts of piracy and addresses all forms of unlawful acts against a ship or attempts to violate the security of the ship. To this end, the Law includes a broad definition of “unlawful acts” which is void of:
 
Unlawful act means an act or suspicious act or circumstance which, by its nature or context, threatens the security of the ship or may cause damage to the ship or to the persons on board or to the cargo and includes the commissioning and attempted commissioning of following acts:

(a) the seizure of the control of the ship, its capture, its immobilization, its detention, its looting, its kidnapping or its hostage-taking and includes acts of piracy; or
 
(b) committing an act of violence against any one of the persons on board the ship or causing injury or death to them; or
 
(c) the destruction of the ship or causing damage to the ship or to the cargo; or

(d) the placement on board, in any way and by any means, of a device or substance which may destroy the ship or cause damage to it or to the cargo or cause bodily harm or death to any one of the persons on board; or

(e) the abduction, detention or hostage-taking of one, some or all of the persons on board;

(f) the theft or the transportation out of the ship without prior permission of permanently installed or portable equipment or outfitting, documents, supplies, tools or of parts of the ship or of personal property or money belonging to those on board; or

(g) the exercise, or the threat, of violence or any other form of blackmail or intimidation for the commissioning or attempted commissioning of any of the acts referred to in (a) to (f) above; or

(h) the transmission of information that can assist in the commissioning or attempted commissioning of anyone of the acts referred to in (a) to (g) above.

Company as defined in SOLAS regulations IX/1 and XI-2/1. motive and refers to any act or suspicious act or circumstance which, by its nature or context, threatens the security of the ship or may cause damage to the ship or to the persons on board or to the cargo.

The Law provides that Cyprus ships are required to implement, in addition to the special measures to enhance maritime security as set out in SOLAS chapter XI-2 and the ISPS Code, compulsory security measures when navigating through risk and high risk areas. These can be developed and implemented taking into account the related recommendations and guidelines published by International Maritime Organization (IMO) and/or the shipping industry.

Armed Guards on Cyprus Registered Vessels

The Law allows the registered owner, the registered bareboat charterer or the manager of a Cyprus ship (the operator of the Cyprus ship) to request, on the basis of a reasoned and justified security risk assessment, permission to engage the services of a private ship security company providing unarmed or armed private ship security guards when the ship is navigating through high-risk areas.

The use of the unarmed or armed private ship security guards is an additional protective measure which the operator of the Cyprus ship may desire to put in place beyond meeting its obligation in relation to the compulsory requirements.

However, the private ship security company and its security personnel should be one of those the Government of the Republic (the Government) has vetted and certified as being allowed to provide security-related services to Cyprus ships.

The circumstances for the use of force should be documented and its use is subject to the prior authorization of the master.
 
The Law has been based and incorporates the recommendations and guidance developed by IMO thus far in relation to the use of privately contracted armed security personnel on board ships navigating in high risk areas. Furthermore, the Law takes into account the provisions of the United Nations Convention on the Law of the Sea and in particular the rights of a State as a port and a coastal State within its internal waters, territorial sea and contiguous zone.
 
The Law addresses a variety of issues relating to the position of the unarmed or armed private security guards whilst onboard; their embarkation and disembarkation; as well as, the movement and storage on board of their firearms, their ammunition and of other security-related equipment. It also addresses issues of civil liability of the operator of the Cyprus ship and of its shipboard personnel vis-à-vis the private ship security company and its employees and vice versa.

Taking into account that passenger ships or other ships which carry on board a large number of special or industrial personnel are increasingly tending to engage the services of contractors in relation to the security measures that they are required to have in place for compliance with the requirements of SOLAS chapter XI-2 and the ISPS Code, the Law also regulates this aspect.

Furthermore, the Law establishes new rights for seafarers and covers several issues, in particular in cases of the ship being hijacked, in connection with the ordinary rights and obligations of the shipboard personnel.

The Law includes provisions regulating the protection of Cyprus ships by the Armed Forces or Security Forces of other States, as well as, issues relating to intervention, immobilization and marking and tracking of Cyprus ships which have been unlawfully detained or seized.

Some of the Law’s other provisions include:

(a) the right of the shipboard personnel for self-defense;

(b) the right of the shipboard personnel to arrest and detain those attempting to commit or those who have committed an unlawful act against the ship and to seize their arms and equipment, when they are found on board the ship;

(c) the submission by the operator of the Cyprus ship of an application requesting the issuing of a certificate to the ship which will allow the boarding of private ship security guards for the implementation of security measures and the use by them of firearms or other security-related equipment whilst within high-risk areas;

(d) the submission by a private ship security company of an application requesting the issue of a certificate attesting that the applicant is allowed to provide the services of unarmed or armed security personnel it employs to Cyprus ships;
 
(e) the conditions regarding the issuing, suspension and cancellation of the certificates;

(f) the obligations of the master, the shipboard personnel, the operator of the Cyprus ship, in case of boarding of privately contracted unarmed or armed security personnel for the purpose of providing protection to the ship;

(g) the obligations of the private ship security company and of its employees, in case of boarding of unarmed or armed private ship security guards for the purpose of providing protection to the ship; and

(h) prohibitions and criminal offences.

Application of Private Companies Providing the Service of Protecting Vessels Registered Under the Cyprus Flag

A Cyprus Limited Liability company, may, by way of application to the Department of Merchant Shipping of Cyprus (the regulatory authority), be authorized to provide services of armed guard on Cyprus ships.

The company to be licensed as a company providing services of protection at sea, can be:

(a) A company incorporated under the laws of the Republic of Cyprus and has its registered office in Cyprus, or

(b) A company incorporated under the laws of any EU state, and has its registered office and management in a member state, and has to have an authorized representative in Cyprus, or

(c) A company incorporated under the jurisdiction on any third country, which subject to the approval of the Minister of Communication and Works approval, and has to have an authorized representative in Cyprus.

The main application requirements are the following:

• Name and address of applicant company

• Must have an authorized representative who is a physical or legal person and who is a permanent resident of Cyprus (arguably must be a director)

• All directors, shareholders and employees must have a clean criminal record and no pending charges against them

• All directors, shareholders and employees cannot also hold a current position in any military or governmental authorities

• All directors, shareholders and employees must have a clean health certificate, no drug issues etc.

• All company corporate documents

• The full name, nationality, ID or passport number, telephone numbers, residence address, academic and other qualifications, previous employment details and relevant experience of all persons in the company (i.e shareholders, directors, employees and armed guards)

• Address of office of the company and details on office hours, telephone and fax lines as well as email address for contacting at non-office hours

• Detailed description of the activities of the company, its corporate structure and regulatory structure and operation of its services rendered

• Detailed report on the proposed services and to what type of vessels

• Description of weapons used and relevant serial number security (for tracing purposes)

• Statement of the applicant that it undertakes to assure that the shareholders, directors, secretary, authorized person, and armed guards are all persons employed by the company

• Statement of the applicant that all weapons held have been legally purchased and registered and will remain registered in the name of the company and will not be sold or given for use at another state after a service mission

• Statement of the applicant that it will undertake to pay for any damages to those aboard a ship it is providing security services to which is a result of the negligence or purposefully by the security guard

• Statement by the applicant that all armed guards have a binding contract of employment, and that they are trained to a sufficient level in the handling, transfer and storage of firearms and explosives

• Statement of the applicant that it commits to provide for medical and health care upon the return of the armed guard

• Statement of the applicant that it will abide strictly with the provisions of the current legislation and apply the decisions of the Department of Merchant Shipping of Cyprus

• Statement of each of the directors, secretary, authorised representative, the armed guards and all persons employed by the company, that they agree to be bound and undertake irrevocably to abide strictly with the provisions of the current legislation and apply the decisions of the Department of Merchant Shipping of Cyprus.

Conclusion

The new law allows the ship owner or ship operator of a Cyprus registered vessel to obtain the services of security protection (armed or not) when sailing through high-risk zones.

Furthermore, the new law provides the structure and procedure by which a company may be granted authorization by the Ministry of Communications and Works through the Department of Merchant Shipping, to provide guard (armed or unarmed) services to Cyprus registered vessels.

Initially, Focus Business Services (Cyprus) Limited can incorporate the company and subsequently can provide legal assistance with the preparation of the application and supporting documents, as well professional advice throughout the application process as well as during the operation of the company.

Also, our Group can provide all ongoing assistance after successful authorization of a private company providing services of armed guards on Cyprus vessels for Accounting and Audit.

Our Group can furthermore provide the required by the relevant law physical office space for such companies


 


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