Newsletter: One step closer bareboat registration in Norwegian ship registries

On 6 December 2019, the Government decided to advance a proposal from the Ministry of Trade, Industry and Fisheries to amend the Maritime Act and the NIS Act to allow for bareboat registration in the Norwegian ship registries. The decision means that the proposal will be considered by the Norwegian Parliament, most likely in the spring of 2020.

Bareboat registration means that a vessel registered in one state (the primary state) is at the same time registered temporarily in another state (the bareboat state). The consequence is that the public law and private law functions of the registration are split between the two states. In example, the flag state jurisdiction will be transferred to the bareboat state, whereas ownership, mortgages, pledges and encumbrances will remain registered in the primary state.

Unlike Norway, bareboat registration is currently permitted in most major flag states. This can be a competitive advantage because many states require all vessels operating within their jurisdiction fly local flag. This applies e.g. in Brazil, Canada, Australia and Mexico, as well as some African countries. The Brazilian blocking regulations in particular, have affected numerous Norwegian shipowning companies, in that Norwegian flagged vessels have had their contracts terminated.

Many financial institutions also require that their mortgages are registered in certain registries. This is both for practical reasons and because the enforcement/accession of the mortgage often will be associated with a different risk profile in different jurisdictions. The balance between these two factors in particular makes bareboat registration advantageous. The purpose of the proposal is therefore to make the Norwegian registers more attractive and competitive.

Highlights:

The proposal consists of the following main elements:

  • Vessels registered in NOR/NIS can be bareboat registered in foreign ship registers (flagging-out).
  • Foreign-registered vessels can be bareboat-registered in NOR/NIS (flagging in).
  • The rules on bareboat registration apply for cargo vessels, passenger vessels, drilling rigs and similar mobile facilities, which are subject to registration, but not fishing vessels.
  • There are no restrictions on which foreign registries vessels can be bareboat registered out to, or in from, provided that the relevant foreign state has compatible rules of law.
  • Bareboat registration is permitted for a period of up to ten years, with a possibility for extensions of five years at a time, but will always be limited to the duration of the relevant bareboat charter party.
  • The vessel’s owner and all registered holders of rights in the vessel must consent to the bareboat registration.
  • Bareboat registration out of NOR/NIS does not prevent new mortgages or other encumbrances from being registered on the vessel.

In our view, the Government has decided to advance a proposal which is well suited to safeguard the interests of Norwegian shipowners and financial institutions. The proposal has been drafted with a view to the legislative guidelines drawn up by the International Chamber of Commerce, and therefore has many similarities with the legislation in comparable states. The proposal also provides good flexibility compared to, e.g. the solution chosen in Danish law, where there are limitations on which country’s registries vessels can be bareboat registered out to, and in from.

The proposal is scheduled to be considered by the Norwegian Parliament in the spring of 2020. If the proposed legislation is passed, it will probably enter into force during the second half of 2020 at the earliest.


Kvale regularly assists clients with questions related to bareboat charter parties and registration of ships in Norwegian and international ship registers. Feel free to contact us if you have any questions related to this, or would like assistance.