Ship Registration: Law and Practice
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CHAPTER 15
Isle of Man
Isle of Man
15.1 The Isle of Man is an island situated in the Irish Sea with a population of approximately 85,000. Part of a Norse kingdom until the thirteenth century, the Lordship of Man was purchased by the English Crown in 1765. It is an internally self-governing Crown Dependency forming part of the British Isles, but not the UK. It has its own parliamentary and legal systems, while the Crown remains responsible for international relations and defence issues. The Queen’s representative on the Island is known as the Lieutenant-Governor. The Isle of Man is outside the European Union, but enjoys a special relationship under Protocol 3 of the Treaty of Accession, enabling the inhabitants to enjoy freedom of trade with EU countries. The legislature, the Tynwald, is made up of two parts: the Legislative Council and the House of Keys, the latter body having 24 elected members. The legal tender is the Manx pound, equivalent to the pound sterling. 15.2 Vessels registered in the Isle of Man are British ships, but are subject to the control of the Isle of Man Ship Registry. Part of the Red Ensign Group, the group of British registries collectively promoting their quality brand and reputation, the Isle of Man is a popular choice for tankers, bulk carriers and offshore support vessels as well as for large commercial yachts, and appears as 11th in the list of best-performing flag States in the 2017 Paris MOU White List.1 In July 2017 the website of the registry was fully modernised and re-launched with online services now available. Vessels registered in the Isle of Man fly the Red Ensign, defaced with the ‘triskelion’ symbol of three conjoined legs.Sources of law
15.3 Registration of ships in the Isle of Man is regulated by an Act of Tynwald, the Merchant Shipping Registration Act 1991 (‘the Act’), as amended. Unless otherwise stated, references to sections in this chapter are references to sections of the Act. The Isle of Man is classified under the UK Merchant Shipping Act 1995 as a Category 1 registry (unlimited tonnage and type).Page 170
Vessel eligibility
Vessel type
15.4 Most of the more common types of vessel may be registered in the Isle of Man. However, the following categories of vessel will not be accepted for registration:2- (1) ships and commercial yachts that are not classed by approved classification societies;
- (2) ships of less than 500 gross tons, unless operating locally in and around the Isle of Man;
- (3) single hull oil tankers;
- (4) high speed craft and passenger ships operating outside the Irish Sea area;
- (5) floating dry docks;
- (6) harbour and estuarial craft operating outside Isle of Man waters;
- (7) pilgrim ships;
- (8) ships engaged in the carriage of irradiated nuclear fuel.
Age limits
15.5 There are no defined age limits in legislation which would prevent a ship from being registered under the Isle of Man flag. However, the Registry will not normally accept ships over 20 years old. Merchant vessels intended to be registered require an initial general inspection (IGI) by an Isle of Man surveyor either prior to registration or within six months of registration as follows, according to the life-cycle of the vessel concerned. For existing ships, the timing of the IGI is dependent upon the age of the vessel and its Port State Control (PSC) history. Generally, existing vessels of less than ten years old, which maintain an acceptable PSC inspection history, will not require an IGI prior to registration. Such vessels will however need to be attended for an IGI within six months of registration. Vessels more than ten years old will require a satisfactory IGI attended by an Isle of Man surveyor prior to registration. For new ships, a vessel built at a shipyard which has delivered IoM-registered ships previously to an owner or manager that has vessels currently registered with the Isle of Man administration will not normally be subject to an IGI prior to registration. The IGI will however be required to be carried out within six months of registration. Vessels delivered from shipyards that have not previously built ships to the Isle of Man flag, and ships owned or managed by companies previously unknown to the Isle of Man Ship Registry, will normally be subject to an IGI prior to registration.Ownership
15.6 The following categories of persons are qualified to be the owners of ships registered in the Isle of Man:- (1) British citizens;
- (2) British Dependent Territory citizens;
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(3) British Overseas citizens;Page 171
- (4) persons who under the British Nationality Act 1981 (an Act of the UK Parliament) are British subjects;
- (5) persons who under the Hong Kong (British Nationality) Order 1986 are British Nationals (Overseas);
- (6) bodies corporate incorporated in the Island or in any relevant country and having their principal place of business in the Island or in any such country;
- (7) citizens of the Republic of Ireland and such other relevant countries as may be prescribed under section 45; and
- (8) limited partnerships having their principal place of business in the Island or a prescribed relevant country.
- (1) the UK;
- (2) any of the Channel Islands;
- (3) any British Dependent Territory;3
- (4) any Member State of the European Union or other State which is a party to the European Economic Area Agreement;
- (5) Australia; the Bahamas; Canada; China; Hong Kong; India; Japan; Liberia; Malta; Marshall Islands; Monaco; New Zealand; Pakistan; Panama; Russia; Singapore; South Africa; South Korea; Switzerland; United Arab Emirates; and the USA.
Bareboat charter registration
15.8 The Act introduced into the Isle of Man a demise (bareboat) charter register that enables ships registered in a compatible foreign register to be demise charter registered in the Isle of Man, provided that the charterer is a person or corporation qualified to be the owner of a Manx ship. Such ships fly the Red Ensign and are subject to Manx regulations concerning safety, prevention of pollution and manning, but retain their status on the foreign underlying register in respect of ownership and mortgages. 15.9 Ships registered in the main Part I Register in the Isle of Man and demise chartered to foreign interests may be demise charter registered ‘out’ to a compatible foreign registry. Such ships operate and trade as ships of that foreign country and are not entitled to fly the Red Ensign; they are subject to the foreign country’s statutory regulations concerning safety, prevention of pollution and manning, but retain their status on the Isle of Man in respect of ownership and mortgages.Trading limits
15.10 There are no limitations on trading, subject to any prevailing EU or UN sanctions.Page 172
Manning requirements
15.11 The Isle of Man has adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978, including its Annex and the STCW Code, and all amendments made to that Convention up to and including those amendments made by resolutions 1 and 2 of the 2010 STCW Conference (the Manila Amendments). The detailed requirements of this Convention are introduced by the Merchant Shipping (Manning and STCW) Regulations 2014.Certificates of competency for officers and ratings
15.12 Masters and other officers are required to hold either a valid UK certificate of competency or a national certificate of competency issued by an acceptable country accompanied by an Isle of Man endorsement. Since 1 February 1997 a UK certificate of competency will only be acceptable if it has a clearly stated STCW endorsement and not more than five years have passed since the last revalidation date. A certificate holder will only be permitted to sail in the capacity stated in the STCW endorsement. The 2014 Regulations permit the Ship Registry to recognise certificates of competency obtained after examination and issued by other countries that have ratified and implemented the STCW Convention. Ratings who form part of a watch (bridge or engine room) must hold an appropriate watch rating certificate. These can be issued by the Isle of Man Ship Registry for ratings who do not hold a certificate issued by another country. Each application to the Manx authorities for approval of non-UK certificates will be considered on its individual merits. The process for application of STCW endorsement is now available online, with electronic certificates issued to operators using the system.4Nationality of crew
15.13 There are no restrictions on the nationality of officers or ratings, recognition is based upon the issuing country of the candidate’s certificate of competency. The Isle of Man Ship Registry maintains a current list of acceptable countries whose standards of crew training and certification are accepted by the Isle of Man Ship Registry and a signed undertaking is in place between the two countries.5Document of safe manning
15.14 All Manx ships, apart from vessels on the small ships register (Part II), pleasure craft of under 24 metres load line length, and fishing vessels, are required to hold a safe manning certificate setting out the minimum number of officers and ratings considered to be the minimum safe level for the operation of the ship. Each ship is considered on an individual basis by the Isle of Man Ship Registry prior to the issue of a certificate. The manning levels set out in a safe manning certificate will reflect the IMO guidelines,Page 173
Approved classification societies
15.15 The following classification societies are approved by the Isle of Man Government to act as recognised organisations:- American Bureau of Shipping (ABS)
- Bureau Veritas (BV)
- DNV GL
- Korean Register of Shipping (KRS)
- Lloyd’s Register of Shipping (LR)
- Nippon Kaiji Kyokai (NKK)
- Registro Italiano Navale (RINA)
Taxation
15.16 Since 6 April 2006, the standard rate of corporate income tax for resident and non-resident companies has been 0%. Companies receiving income from banking or from land and property in the Isle of Man are subject to income tax at the rate of 10%. No withholding taxes are payable on dividends or interest paid by resident companies to foreign companies. There are no taxes on capital gains, no inheritance tax or stamp duties in the Isle of Man. The country has a customs union with the UK.Procedure for registration
Provisional registration
15.17 There is no provisional registration in the Isle of Man. Full registration can be achieved to suit ship delivery times wherever they may be.Permanent registration
15.18 An application for registration shall be made by contacting the Ship Registry using the contact details shown at the end of this chapter. There are four possible ports of registry: Castletown, Douglas, Peel, and Ramsey. In the case of merchant ships and large yachts the Registry should be consulted to confirm whether an initial general inspection (IGI) by an Isle of Man surveyor is required before registration. Specimen forms are provided in Appendix XI. In the case of an application by a body corporate the following documents will need to be submitted:- (1) a completed application form to register an Isle of Man ship (Form REG 1);
- (2) a completed appointment of authorised officer (Form REG 3);
- (3) a completed declaration of ownership on behalf of a body corporate, an individual or LLP (Form REG 4, REG 5, or REG 14 respectively);
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(4) a copy certificate of incorporation and any certificate of change of company name;Page 174
- (5) a completed appointment of a representative person in the Isle of Man;
- (6) evidence of ownership title: in the case of a new ship, a builder’s certificate acceptable form and all subsequent documents of sale (if any) prior to registration in the applicant’s name; in the case of a ship that is not new and previously foreign registered, a bill of sale from the last foreign owner to the applicant;
- (7) for a pleasure vessel, complete form REG 15 declaring that the vessel is to be used for pleasure;
- (8) a certificate of survey, normally prepared by an approved classification society, detailing the parameters of the vessel;6
- (9) tonnage certificate;
- (10) a deletion certificate or evidence that the previous registry of the vessel has closed, in the case of transfer from a foreign flag;
- (11) evidence of liability insurance – CLC blue card (oil tankers only), bunker oil blue card (if vessel over 1000 GT), and Nairobi wreck removal certificate (if vessel over 300 GT) as applicable; and
- (12) a new call sign and MMSI number.7
Registration of mortgages and security interests
15.19 Any registered vessel or a share in a registered vessel may be made a security for the repayment of a loan or the discharge of any other obligation. The instrument creating such security shall be on one of the standard printed forms of mortgage approved by the Department and similar to the statutory forms of mortgage used for British vessels registered in the UK. In order to register a mortgage, the original document shall be delivered to the Registrar who will cause the relevant details to be recorded in the Register. He or she will then endorse on the mortgage deed the date and time of recording. Where there is more than one mortgage against a single vessel, mortgages will be registered in the order in which they are produced to the Ship Registry for registration purposes, and will rank between each other for priority in order of such registration. In such cases the later mortgage will receive a subsequent identifying priority letter. 15.20 Where a party intends to take a mortgage over a vessel or a share in a registered vessel, advance priority may be obtained by delivering a ‘notice of mortgage intent’ (MORT 1) to the Ship Registry. Once delivered to the Registry with the appropriate fee, such a notice will give priority to the intended mortgagee for a period of 30 days from the time on which the notice was recorded on the register. If the mortgagee is unable to register a mortgage within 30 days, the notice of mortgage intent may be extended for a further 30-day period.Surveys
15.21 In view of the availability of improved ship performance data, the Isle of Man Ship Registry may waive the requirement for an IGI of any vessel under ten years old.Page 175
Deregistration procedure
15.22 A ship may be deregistered on the written request of the owner in the event of a sale to an unqualified owner, or the scrapping or total loss of the vessel. The owner is required to surrender to the Ship Registry the original certificate of registry, if available. Following the closure of the register, the Registry will issue a closed transcript as official evidence of the closure.Yachts
15.23 Pleasure yachts have been registered in the Isle of Man for many years. The ownership qualification requirements and registration procedures are largely the same as those applied to commercial vessels. Because of the favourable tax regime in the Isle of Man and the growth of indigenous yacht management, professional and financial expertise, the Isle of Man has become a centre for the management of yachts whether used for pleasure purposes or commercial charter. 15.24 The Isle of Man applies the UK’s Large Commercial Yacht Code (LY3) to all commercially-operated yachts over 24 metres in length constructed on or after 20 August 2013. Such vessels are subject to inspection by Isle of Man Ship Registry surveyors and are issued with certificates of compliance (with LY3), equivalent to the ‘MCA Code’ compliance certificates issued to commercial yachts registered with the UK and with other Red Ensign Group registries.Contact addresses
15.25Isle of Man Ship Registry