Cayman Islands: Offshore Business Sectors
Ship Management and Maritime Operations
See Offshore Business Review – Shipping for a more general treatment of offshore shipping registries.
The Cayman Islands operates Registers of Shipping and Civil Aircraft. George Town is a Port of British Registry. Over the years, Cayman has been included in most English merchant shipping acts, with the result that it is a Category 1 registry, entitled to register all classes of vessel.
The Cayman Islands Shipping Registry administers Cayman registration, and has a full professional staff for this purpose. The Merchant Shipping Law (2008 Revision) governs Cayman registration and lays down fee levels according to tonnage.
Aircraft are registered under the (English) Aircraft Navigation (Overseas Territories) Order 1989 (updated in 2007). The Civil Aviation Authority of the Cayman Islands maintains the register. The UK Civil Aviation Authority has discretion over Cayman registration, and in practical terms limits it to private aircraft.
The Air Navigation (Overseas Territories) Order 2007 came into force on January 9, 2008. The new Order consolidates the provisions of the 2001 Order and its four amendment orders and has also been substantially restructured to make it more user-friendly. A lot of the procedural and administrative material has been removed, largely from the schedules, and is now in the relevant OTAR Parts. A number of new provisions have been introduced, including those relating to regulation of corporate operations, and provisions have been introduced to enable Governors to give instructions concerning the equipment, performance and manner of operation of aircraft. Some changes have also been made to the airworthiness requirements; in relation to permits to fly; and in respect of the introduction of requirements for safety management systems.
By July 2013, the Cayman Islands Shipping Registry had more than 1,900 vessels on its books, with 822 of them being superyachts.
The Merchant Shipping Law of 1997 together with its amendments was commenced in July 1999 to revise, streamline and update the previous law. The law was based mainly on the United Kingdom ("UK") Merchant Shipping Act, 1995, the UK Aviation and Maritime Security Act, 1990 and the UK Merchant Shipping and Maritime Security Act, 1997. It also embraced up-to-date convention requirements together with a number of innovations that address some of the specific needs of the Cayman Islands. These included: wider ownership, extended demise charter, enhanced mortgagee protection, registration and mortgage of ships under construction, mandatory minimum insurance, anti-piracy measures and clearer exercise of due diligence in the registration, deletion and representation of ships. The provisions of a number of ILO Conventions were also incorporated, covering the engagement and welfare of seafarers, recruitment and placement of seafarers, regulation on hours of work and rest, and living and working conditions of seafarers.
A similar revision exercise has taken place with the Merchant Shipping (Marine Pollution) Law. This Law places all applicable aspects of marine pollution into one comprehensive and up-to-date body of law. It incorporates relevant aspects of UNCLOS, MARPOL, the Intervention Convention, OPRC 90, the London Convention on dumping of wastes (including its Protocol of 1996) and the Hazardous and Noxious Substances Convention. Some applications that have a broader reach than strict pollution issues have been included in the Merchant Shipping Law. Examples include the Civil Liability Convention and the Fund Convention.
The third body of principal maritime legislation introduced was the Admiralty Jurisdiction Law, which came into effect in 2003. It was based on the UK Supreme Court Act, 1981 and incorporated the Arrest Convention of 1952. It operated as part of the Cayman Islands Grand Court Law and Rules.
In July 2004 it was announced that the Cayman Islands' shipping registry was fully compliant with the International Maritime Organisation's International Ship and Port Facility Security Code. These international maritime security measures entered into force on July 1, 2004 and are designed to enhance maritime security on board ships and at ship/port interface areas. They were adopted by a Conference on Maritime Security, part of the United Nations, in December 2002. The new chapter applies to passenger ships and cargo ships of 500 gross tonnage and above, including high speed craft, mobile offshore drilling units and port facilities serving such ships engaged on international voyages.
In 2005 a Maritime Authority Law was passed, creating the Maritime Authority of the Cayman Islands (MACI), a body which incorporates the Cayman Islands Shipping Registry, Cayman's Port State Control and Marine Casualty Investigation arms into one entity.
In 2007, Cayman maritime legislation was amended with the aim of improving the services provided by the CISR. The amendments, which were welcomed by MACI, included changes to the Merchant Shipping Law (2005 Revision) or MSL 2005, and the Maritime Authority of the Cayman Islands Law, 2005, (MACI 2005). Under the revisions, the range of countries in which a person or other entity may be eligible to own a Cayman Islands ship was extended by including those countries which are listed under the Third Schedule to the Cayman Islands Money Laundering Regulations. Ship-owning entities in those countries are now able to register ships in the Cayman Islands. Prior to the amendment, qualifying countries only included the 25 European Union countries and their 50-plus overseas dependencies, countries and territories. Two additional Ports of Registry (The Creek and Bloody Bay) were also added to that of George Town.
Other amendments to MSL 2005 included the introduction of updated terminology with respect to UK Overseas Territories and references to seafarers; the revision of existing provisions regarding seafarers' wages to maintain the appropriate level of protection under international requirements, ensuring that Cayman continues to meet its international obligations; and the introduction of provisions to ensure that the Cayman Islands are able to take full advantage of emerging international requirements regarding the levels of compensation available to the Islands in the event of a ship-generated major oil pollution incident.
CEO of MACI and Director of the CISR, Joel Walton, commented: "All of these changes will allow MACI to operate in a more efficient and effective manner while continuing to give Cayman's shipping sector a competitive edge globally."
In 2007, the United States Coast Guard (USCG) awarded the Cayman Islands Qualship 21 Status, a maritime quality benchmark which currently only about 10% of foreign ships entering US waters meet.
Qualship 21 is the USCG’s matrix system of extending recognition to “foreign” ships, which fly the Flag of a state which has demonstrated a good safety and pollution prevention record with respect to its ships. Ships in the Qualship 21 system are required to undergo significantly less Port State Control inspections by the USCG whilst in US waters.
Essentially, the Qualship 21 system “rewards” good ships thereby contributing to the elimination of substandard ships.
In a move to further expand its global network, in January 2009, the Cayman Islands Shipping Registry (CISR) named Mr. Martin Chu as its first representative in Hong Kong, opening up a new location for the CISR. He joined the Registry as CISR Business and Technical Consultant Far East. Hong Kong marks the ninth location in the world to have CISR representation, and brings to a total of three representatives to the Far East for the CISR, a division of the Maritime Authority of the Cayman Islands (MACI). Commenting on his appointment, Mr. Chu stated: "It is widely acknowledged that the Cayman fleet quality is benchmarked as a leading industry standard and I am delighted to be given the opportunity to join the Cayman Islands Shipping Registry to contribute to its continued success.
The appointment was announced six months after MACI appointed Ms Evelyn Soon to be the Singapore Representative of the Cayman Islands Shipping Registry (CISR).
In April 2009, the top management of the Maritime Authority of the Cayman Islands visited France to sign an agreement with Bureau Veritas (BV), the French classification society.
"We have official affiliations with seven global Class Societies to ensure our ability to meet the needs of our valued clients on a worldwide basis, and also to keep Cayman at the forefront of the international maritime safety arena," explained MACI CEO, Mr A. Joel Walton, head of the Cayman delegation
In May 2009, the CISR announced that it had relocated its Mediterranean representation to the Principality of Monaco with effect from May 1, 2009.
"Expansion over the past two years has been significant to the CISR," explained Mr Joel Walton, CEO (Designate) of the MACI and Director of CISR.
"In order to strategically place ourselves for the convenience of our clients, we opened our first representative Mediterranean office in Cannes and it was very well received. However, in order to expand our services, we decided to move our representation to Monaco, where we have a large client base, once accommodation and representation services there could be secured," he added.
Walton went on to explain that Monaco, with its wealth of financial services and international high net worth individuals, is a natural fit for the CISR, remarking:
"It’s where we always intended to be, but it was very difficult to find the right fit initially, so we went a little further afield, locating in Cannes when we first had the opportunity."
The Cayman Islands Shipping Registry has representation in nine locations globally: George Town, Grand Cayman Head Office; European Regional Office, Southampton, UK; London; Ft. Lauderdale; Monaco, Athens, Singapore, Hong Kong and Tokyo.
Also in May 2009, it was announced that the CISR had attained "White List" status under the Tokyo Memorandum of Understanding on Port State Control (MOU).
This particular MOU has been signed by 18 countries including Japan, Australia, New Zealand, China, Canada, Chile, Republic of Korea and the Russian Federation.
Previously on the "Grey List", the MACI had worked arduously to achieve the top ranking by diligently upgrading and improving the calibre of its worldwide fleet of vessels.
"This is a great achievement for us, and, more so of our Safety and Survey Division, although the entire organization contributed to this success," said the MACI's CEO, Mr. A. Joel Walton.
"Tokyo is one of the most important MOUs internationally, and brings further recognition to the high standing of the Cayman Islands Shipping Registry," he added.
Later that month, the top management of the Maritime Authority of the Cayman Islands signed an agreement with Registro Italiano Navale (RINA), the Italian marine interests classification society.
"In order to effectively expand our capabilities on a worldwide basis, we have official affiliations with seven global Class Societies, thus enabling them to act on our behalf," explained MACI CEO, Mr A. Joel Walton, head of the Cayman delegation.
Mr Walton added: "MACI has a broad global network of Cayman Islands Shipping representatives, in addition to George Town and UK-based maritime professionals who travel extensively, but our agreements with the various prestigious classification societies give us even more reach in effectively and efficiently servicing our valued clients' needs."
The Maritime Authority of the Cayman Islands (MACI) received news in June 2009 that the CISR had maintained its prestigious “White List” status on the Paris Memorandum of Understanding (MoU) on Port State Control.
According to the MACI's CEO, Mr A. Joel Walton: “Paris is surely one of the most significant MOUs internationally, and being on its “White List” brings well-earned global recognition to the high standing of the Cayman Islands Shipping Registry”.