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HANSA 08-2020

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Schifffahrt | Shipping

Schifffahrt | Shipping Cyprus, an EU flag and national characteristics Is there a future for a European flag in shipping? The Cyprus flag still has a strong relationship with the German shipping community. Natasa Pilides, Shipping Deputy Minister at the time of the interview and now Minister of Energy, Commerce and Industry, talked to HANSA about plans, »homework« and a European flag 40% of the world fleet is registered under national European flags. What is your standpoint on the on-going discussions for a European flag (HANSA 08/19)? Natasa Pilides: There have been suggestions regarding this, so obviously we need to look at all the ramifications. The important thing is much more to maintain the competitiveness of European shipping as a whole – and Cyprus is definitely very committed to that – than to focus on »smaller« aspects. The competitive advantage that European flags have is something to take very seriously. We need to make sure that we can maintain those qualities as well as a certain degree of flexibility. I also think it is very important to maintain certain national characteristics. The topic of a European flag is in a very preliminarily status. It is something that could be examined but it would need a lot of efforts to look at how exactly it would work and how the different countries would actually fit into a wider and more integrated flag system. EU flags strong among Germans Around 43% of the German fleet flies the flag of a EU country, especially the flags of Portugal, Cyprus and Malta. Antigua & Barbuda and Liberia are still the largest single flag states in the German fleet. Are you open for this? Pilides: We wouldn’t necessarily be negative to it but we would want to ensure that it is in line with global policy that encourages competitiveness, that it gives companies the freedom to operate within a business friendly environment, and consider whether such a registry would be open or closed. It is really important for us to consider this comprehensively and in its entirety. The important aspect of European shipping is far beyond the flag. If we can actually ensure that European vessels are flagged in Europe, that›s a good thing. But we need to be offering shipping and ship owners a certain flexibility. So, hopefully, we can maintain and develop European shipping by providing policies that are good for shipping but also promote innovation aligned with global policies. What is your strategy for the future of the Cyprus flag? Pilides: We have a lot of plans. So far we have updated our registration policy and streamlined our fees. We are looking both at the core safety aspect and the bureaucratic aspect of a registration and tax as well as on automation aspects with a online registration system which is under way. Within that tax system we are also going to introduce some special discounts for environmental friendly vessels. In addition, we are working on our system to make things easier in the process of getting all the paperwork done, in a literal sense. For port state control, we are going to rolling out an electronic platform on a pilot basis. The Corona pandemic now caused a delay in port state control, the automated system can facilitate in that because a lot of the information will be able to be collected remotely and so we can maybe obtain some comfort on the procedures without having to physically doing the inspection whilst the restriction measures are in place. Physical inspection will be done too, but the idea is that a lot of the information can be collected in advance, to limit the inspection to the things. We are trying to make our service a one-stop. But the changes, that we need to do from a legal perspective are something that we require sort of a wider timeframe. 18 HANSA – International Maritime Journal 08 | 2020

Schifffahrt | Shipping What kind of environmental discount do you have in mind? Pilides: It will be up to 30% of the current and obviously for over-compliance. If a ship is not just sticking to the regulations, but being rewarded for proactive measures. Where do you still have some homework left to do? Pilides: Bringing more of those kind of projects to completion will be very important. But also, we have a lot of opportunities in terms of triggering innovation in Cyprus, both in the number of technology companies and in the range of activities. For that, in 2019, the Cyprus marine and maritime institute was set up, a project that will be funded by the EU as part of the Horizon 2020 programme and the Cyprus government. As a member of the board, we are very eager to provide financial support. The good thing is that the private sector is very interested. That›s definitely something that we need to work on because in the end it is state development. Another thing that we need to finish is our blue growth strategy, that is comprising different ministries and activities within both the maritime cluster and the wider marine environment in Cyprus. That will also help to integrate the maritime activities and connect them with things like touristic activities or the department of fisheries and Cyprus’ oil and gas activity. How do you plan to enhance the portfolio of shipping segments or regions? Pilides: I think that the improvements that we have made to our systems in terms of eliminating bureaucracy and speeding up the procedures and ensuring that the electronic certification and electronic transactions is all there. We do have certain sort of types of vessels that have been increasing a lot under the flag, like passenger vessels for example, where we had a big increase in the last couple of years, also oil and gas is an area that we are interested in, especially as it fits in our oil and gas strategy on a wider level. But also we very much value the business that we have from our traditional segments like bulk carriers and tankers. Want to be the forum for shipowners from Europe but also from abroad. Any message for the German shipping community, which, despite a slight decrease, still accounts for 44% of Cyprus’ shipping earnings? After all, German companies account for 52% of the ship management activities in Cyprus. Around 40% of all companies operating in Cyprus also maintain business relations with shipowners in Germany... Pilides: The relationship is obviously very important to us, particularly in the area of shipmanagement but also in flag. We have made a lot of efforts to modernize and to completely revamp that sort of services that we offer. My message is that we are open for suggestions to becoming more innovative and we are very happy to continue the open dialogue. Interview: Michael Meyer Status improved Natasa Pilides In April, it was revealed that Cyprus is no longer part of the Targeted Flag List of the United States Coastguard (USCG) in relation to the safety performance of flag administrations. The three-year average detention ratio of Cyprus for the period 2017-2019 was 0.96% compared to an average USCG ratio of 1.08%. In 2019, the ratio of Cyprus ships was reduced to 0.55%, down from 1.79 % in 2018, while the USCG’s 2019 ratio was 1.12%. »Whilst from a practical point of view, this may lead to fewer inspections for Cyprus vessels at US ports, it adds to the flag’s status as a high-quality flag which is consistently part of the white lists of the Paris and Tokyo MOUs,« the Ministry stated. Cyprus has also obtained the approval of the EU for the prolongation of its tonnage tax system, which applies to ship ownership, ship management and ship chartering activities, for another ten years. © SDM Cyprus HANSA – International Maritime Journal 08 | 2020 19

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