COMMISSION OF THE EUROPEAN COMMUNITIES 
COH (89) 266 final 
Brussels, 3 August 1989 
111 
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v»3K A FUTURE FOR THE COMMUNITY SHIPPING INDUSTRY: 
MEASURES TO IMPROVE THE 
OPERATING CONDITIONS OF COMMUNITY SHIPPING 
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A FUTURE FOR THE COMMUNITY SHIPPING INDUSTRY: 
MEASURES TO IMPROVE THE 
OPERATING CONDITIONS OF COMMUNITY SHIPPING 
(Communication by the Commission to the Council) 
A FUTURE FOR THE COMMUNITY SHIPPING INDUSTRY: 
MEASURES TO IMPROVE 
THE OPERATING CONDITIONS OF COMMUNITY SHIPPING 
TABLE OF CONTENTS 
I. Introduction 
II. The situation of the shipping industry 
1. Changes in world and Community shipping 
(a) Reduced demand for world shipping services 
(b) Fleet developments and the decline of the Community 
fleet 
(c) Relative ageing of the Community fleet 
(d) Shrinkage in employment 
2. The competitive disadvantage of the Community fleet 
3. Measures taken by Member States 
III. The need and scope for Community action 
1. Need for a Community fleet 
2. The scope for Community action 
IV. A Community ship register as a measure to stem the decline of 
the Community fleet. 
V. Areas for further action and accompanying measures 
1. Manning and research 
2. Technical harmonization and standardization and the 
transfer of ships between Community countries. 
3. Social measures 
4. Ensuring the observation of International IMO/ILO standards 
5. Promotion of the use of Community flag shipping for 
transport of food aid 
6. Definition of a Community shipowner 
7. The removal of cabotage restrictions 
8. Consortia 
9. VAT and excise duties related to shipping services. 
ANNEX 1 Proposai for a Council Regulation establishing a Community ship 
register and providing for the flying of the Community flag by 
sea-going vessels 
ANNEX 2 Commission Recommendation on improving the effectiveness of 
Port State Control within the Community 
ANNEX 3 Proposal for a Council Regulation on a common definition of a 
Community shipowner 
ANNEX 4 Proposal for a Council Regulation applying the principle of 
freedom to provide services to maritime transport within Member 
States 
ANNEX 5 Manning costs 
ANNEX 6 Statistical Annex 
A FUTURE FOR THE COMMUNITY SHIPPING INDUSTRY: 
MEASURES TO IMPROVE THE 
OPERATING CONDITIONS OF COMMUNITY SHIPPING 
I. INTRODUCTION 
1. The Community merchant fleet on the ship registers of Member States 
has suffered since 1980 a dramatic decline both in absolute tonnage 
and in its share of the world fleet. The tonnage was practically 
halved between 1980 and 1988<1) . The share of the world fleet 
fell during the decade from 1970 to 1980 by about 3% to 29,7% but 
this share had declined by 1988 to 15,4%. 
Even if account is taken also of vessels registered outside the 
Community but controlled by Community based companies, there is the 
same tendency. While the world fleet as a whole declined only 
marginally (about 5%), the Community-owned fleet was 28.3% down in 
1987 - last year for which relevant figures are available - in 
comparison with 1981. 
The situation of the Community fleet has continued to deteriorate 
since the Commission Communication to the Council transmitted on 19 
March 1985<2) . Sale of ships and flagging out has become an ever 
more serious problem, with negative consequences for the employment 
of Community seafarers. In addition, significant developments have 
taken place in international shipping In respect of ship 
registration. In particular there has been the development of 
"offshore" or "second" registers and moves to extend the use of 
parallel registers. Given the present circumstances of world 
shipping such options have proved increasingly popular to Community 
shipowners in preference to the traditional main registers of 
Member States. This development presents the danger of an 
increasing divergence in operating conditions between Member 
States' fleets and distortion of conditions of competition between 
Community shipowners. 
2. If the downward trend Is not to continue there is a need for 
substantial measures which go beyond those taken on the basis of 
proposals in the Communication and earlier. 
Following the adoption of the package of four Regulations in 
December 1986<3>, which focused in particular on the threat to 
Community shipping from protectionist policies and practices of 
third countries, there is a clear need for further development of 
Community policy to meet the problems relating to the erosion of 
the competitive advantage of Member States' fleets In the world 
market. 
(1) See Statistical Annex, Table 1 
(2) C0M(85)90 final 
(3) OJ L 378, 31.12.86 
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When adopting the four Regulations, the Council therefore agreed on 
a "Statement" relating to the further development of Community 
shipping policy. In that Statement, the Council recognised the need 
for further measures which precisely would aim to maintain and 
develop an efficient and competitive Community shipping industry 
and to secure competitive sea transport services In the interest of 
Community trade. To this effect efforts are needed to reduce the 
disparities in operating conditions and costs between the Community 
fleets as a whole and their foreign competitors. The Commission 
undertook to come forward with relevant proposals to the Council 
and this is the subject of the present Communication. 
3. The Commission is convinced that only a combination of concerted 
measures, taken at Community and national level with the necessary 
participation and co-operation of shipowners and seafarers can have 
the required positive impact on the operating conditions of 
Community shipping. This impact must provide sufficient incentive 
for Community shipowners to register their ships within the 
Community and man those ships, to the highest possible proportion, 
with Community seafarers. Such objectives can be achieved only if 
the operating conditions of the Community fleet improve its 
competitive position in the world market. 
4. Having considered possible measures that could be taken at 
Community level, the Commission has concluded that one effective 
means of assisting the Community fleet to make the necessary 
adjustments in the face of its present difficulties would be the 
establishment of a Community register, parallel to existing 
national registers. Such a register could contribute to the 
achievement of the single internal market in the Community, and 
would bring other advantages which are discussed in Chapter IV 
below. A proposal for a Council Regulation to establish a Community 
ship register is attached at Annex 1. 
5. In addition, the Commission is proposing a number of further 
measures, and areas for further work, which have as their objective 
the improvement of the competitive position of the Community fleet. 
Thus, the Commission's research programme includes work aimed at 
achieving greater technical efficiency in order to consolidate the 
fleet's long term future, by, in particular, putting Community ship 
operators in a competitive position allowing them to accept the 
higher costs of Community seafarers. Measures to achieve mutual 
recognition of technical equipment, thus facilitating the transfer 
of ships between Community countries are being pursued. Similarly, 
proposed social measures include a proposal for mutual recognition 
of seafarers' qualifications. Measures are also to be taken to 
ensure as far as possible that third country flag ships coming to 
Community ports operate in full observance of internationally 
applicable safety, environment and employment standards, as laid 
down In the relevant IMO and ILO Conventions; a Commission 
Recommendation Is at Annex 2. The use of Community flag shipping 
for the transport of food aid will be promoted. Community shipping 
companies will be defined, in order to ensure that the rights and 
benefits attached to shipping in the Community are available only 
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to companies with a substantial presence in the Community: a 
proposal for a Regulation is at Annex 3. there is also a proposal 
for the application to sea transport within Member States of the 
principle of freedom to provide services: a proposal for a 
Regulation, which supersedes the earlier proposal of the Commission 
in COM(85)90, Annex 11-2, is attached at Annex 4. It is also 
necessary that the position of shipping consortia in relation to 
the competition rules of the Treaty should be clarified; the 
Commission will submit a proposal to the Council on the subject as 
soon as possible. And finally, the treatment of shipping for VAT 
and certain excise purposes is to be clarified. 
6. The Commission has come to the conclusion, corroborated by three 
studies carried out for the Commission*1)*2)*3), that, among the 
range of possible measures and actions, fiscal and financial 
measures aimed at reducing the burdens on Community shipping not 
shared by third country competitors could also have an impact. But 
such measures, If Introduced by Member States separately and 
outside a common framework, may not achieve their objectives and 
may well lend to a further divergence of operating conditions 
between Member States' fleets and a distortion of competition 
between Community shipowners. 
7. Such fiscal and financial measures, as well as any other state 
aids, have to comply with the relevant rules of the Treaty, and the 
Commission has adopted guidelines for the examination by it of 
state aids to the shipping industry, contained in a Commission 
document on the subject*4). 
8. The Commission Is confident that, taken together, this substantial 
list of proposed measures offers the Community fleet a new future 
in line with the development of the single market. 
II. THE SITUATION OF THE SHIPPING INDUSTRY 
(1) CHANGES IN WORLD AND COMMUNITY SHIPPING 
9. The protracted oversupply of shipping services world-wide, and the 
consequent fall in freight rates, have precipitated a serious 
decline of the Community's merchant fleet. Despite the reduction in 
world shipping capacity that has taken place during the Eighties, 
and despite the upturn in seaborne trade over the last two years, 
the world shipping market is only now reaching a balance, and in 
some sectors this point has not yet been reached. Over a prolonged 
period markets have been characterised by freight rates that were 
so low that only those ships with the highest levels of 
productivity could compete effectively. 
(1) "A social survey In Maritime Transport" by Maritime Economic 
Research Centre Rotterdam - 1987. 
(2) "Study of the Possible Financial Impact on Shipping Companies and 
Sailors of Measures to aid the Community Fleet" by KPMG Peat Marwick 
Treuhand GmbH - 1988 (unpublished) 
(3) "EEC Maritime Industries Policy Study" by Moore Stephens - 1989 
(4) "Financial and Fiscal Measures concerning Shipping Operations with 
ships registered In the Community", SEC(89)921 
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10. The increased competition has had serious consequences for the 
Community fleet, which has contracted rapidly. The Community fleet 
shrank almost four times as fast as world capacity in the first 
part of the Eighties, or almost one-and-a-half times as fast as 
world shipping demand. The consequences of this rapid contraction 
are measured in terms of increased dependence on the services of 
third country operators, lost foreign exchange earnings, lost 
employment, lost Influence in International trade and shipping 
negotiations and lost orders for Community shipyards. 
11. The following paragraphs present a more detailed analysis of this 
dec 11 ne. 
(a) Reduced demand for world shipping services 
12. Cargo movements by sea in 1988, measured by tonne-miles, were still 
9% below the 1980 level, following a disastrous fall by 24% between 
1980 and 1983. This drop represents not only a fall in the total 
volume of seaborne trade but, more significantly, a fall in the 
distances which this trade is carried. The trend varies for the 
different categories of cargo: broadly speaking, crude oil 
movements are down 38%, while those of oil products are up by 
almost one third, movements of other major bulk commodities have 
grown by 28% - most of the expansion being in coal trades - and 
the movement of other cargoes has expanded by 9% (Table 2). 
13. Irreversible changes have been taking place in the relationship 
between the level of economic activity and that of seaborne trade. 
Firstly, the upturn which the world economy has experienced during 
the last few years has not been accompanied by an equivalent 
increase in seaborne cargo volumes. This is explicable in terms of 
structural changes In the world economy: slower growth in demand 
for primary commodities, increased economic importance for the 
service sector. 
14. Secondly, changes in trade patterns are leading seaborne transport 
to and from Industrialised countries to grow more slowly than the 
expanding world economy. Examples of these changes are the decrease 
of the average voyage distance for some of the main bulk 
commodities, notably oil, as newer production areas become 
important; and the establishment of manufacturing and processing 
facilities In newly-industrialised countries so that trade between 
the EC and those countries tends towards lower-volume, higher-value 
goods than in the past. The Importance of the Pacific Basin, and 
particularly of South and East Asia, as a focus of world economic 
activity has increased sharply during the past decade and as a 
consequence the role of the European economies as a generator of 
cargoes has become relatively less important. These developments 
have an Inevitable effect on the demand for shipping services 
generated by the Community. 
15. While world seaborne trade (or the demand for shipping services) 
fell between 1980 and 1988 by 9%, the capacity of the world fleet 
(or the supply of shipping services) fell by only 5% (Table 1). 
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Excess shipping capacity was still estimated to be about 20% a year 
ago in spite of the slight upturn since 1986 in crude oil trade and 
further reductions In the world fleet. More recently developments 
have confirmed the improvement of the world market towards a 
balance between the supply and demand to shipping services although 
In some sectors, in particular certain liner trades, considerable 
overcapacity persists. 
16. While it Is estimated that the recent recovery in the level of 
seaborne trade will continue with improved freight rates, it needs 
to be borne in mind that the existing beneficial effects can be 
short-lived as new tonnage Is acquired to take advantage of 
Improving markets. 
(b) Fleet developments and the decline of the Community fleet 
17. After years of expansion, the Community's shipping capacity 
contracted sharply in the Eighties. The Community fleet Is now 
smaller than In 1980 and is also a smaller part of the world fleet. 
18. Since 1980 the tonnage registered in the eleven maritime Member 
States has fallen from 117 million gross tons to 59 million tons in 
1988 - a decrease of about 50% while the number of ships fell from 
11 218 to 6 512 (Table 3). As a share of the world fleet, 
Community-registered tonnage In 1988 was 15.4%, compared with more 
than 29,7% in 1980. 
19. To a large extent the reduction has been the result of "flagging 
out" by shipowners. However, the Community-owned fleet as a whole, 
i.e. including also the ships beneficially owned by Community 
shipowners, has also been significantly reduced. 
In 1981, this Community-owned fleet accounted for more than 34% of 
world shipping capacity; in 1987, it was 27%. While world shipping 
capacity, measured by deadweight tonnes, fell by 8% between 1981 
and 1987, Community-owned capacity dropped by 28% (Table 4). 
20. The decline of the different sectors of the Community fleet has not 
run parallel with the evolution of those sectors worldwide. 
Moreover, It has not been evenly experienced across the Member 
States' fleets (Table 6). 
In the six years 1981-1987, the capacity of the Community-owned 
tanker fleet fell by 40%, the same as the fall In world demand 
for crude oil capacity. Another third of the fleet only 
remained competitive by being transferred to open registries so 
that the Community-registered fleet declined twice as fast as 
the world fleet, with a fall of 54%. The effects were greatest 
In the UK, the Federal Republic, France and the Netherlands. 
In the dry bulk sector. Community-owned capacity dropped over 
the same period by 13% while world capacity grew by 16%. Again, 
competitiveness for a large part of the fleet could only be 
maintained by transferring It to open registries: about 40% of 
the Community-owned fleet was flagged out In this way. The 
effects were most severe in the UK and the Federal Republic. 
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Community-owned non-bulk capacity in 1987 was nearly 20% below 
the 1981 level with a 36% drop in the Community-registered 
share. However, this conceals sharp differences according to 
vessel types. The Community's conventional general cargo fleet 
has declined much faster than the world's fleet, with most of 
the loss occurring In the Greek fleet. The decline of this 
sector was to be expected with the advent of container!sat ion, 
and indeed the container sector has expanded, with recent 
growth taking place In the Federal Republic and Denmark. The 
expansion has not, though, been sufficient to enable the .. 
Community to maintain its world share in this expanding part of 
the shipping market: it stood at 28% in 1987, against 36% as 
recently as 1983. Over the same period, the world share of the 
open-registry container fleets had doubled. There were sharp 
increases too in the Far East container fleets (Table 7). There 
are signs that overcapacity in the containerised sector will 
Increase, particularly in the Trans-atlantlc and Transpacific 
trades. 
21. Each of the Member States' fleets is smaller now than it was in 
1980, with the exception of Belgium whose fleet continued to grow 
until 1986. The largest tonnage falls have been In the Greek- and 
UK-reglstered fleets, which together account for two-thirds of the 
decline in the Community-registered fleet. The crisis In Greek 
shipping led to a doubling of Greek-owned ships on open registries 
' between 1981 and 1987, but total Greek-owned capacity still fell by 
some 8% (Table 8). 
22. While most OECD fleets have declined over the last decade, the 
United States fleet has increased by a third. Nonetheless, the OECD 
share of world shipping in 1988 stood at 34% compared with 53% in 
1980. The rate of expansion of the COMECON fleet in the 1970s has 
not been sustained in the 1980s, and its world share is now 7%. The 
fleets of the developing countries have increased by 60% in the 
Eighties and now represent just over 20% of world shipping. The 
growth has been heavily biased towards South and East Asia, where 
four newly industrialised countries (Rep. of China, Hong Kong, 
Singapore and South Korea) had 6.8% of world shipping capacity in 
1988 (from 3.9% In 1980). 
23. The tendency for the fleets of developing countries to provide 
sharp competition to the Community fleet highlights one aspect of 
present Community policy with respect to shipbuilding. Present 
policy places a celling on the amount of national aid that may be 
accorded to a Community shipyard building a ship for registration 
In the Community. These rules may be relaxed for ships for 
developing countries, with the result that a Member State was 
recently allowed to pay bigger aids for two container ships for 
Singapore than could have been paid for container ships for the 
Community fleet. The Commission has now Introduced a stricter 
interpretation of the rules concerning shipbuilding aid for 
developing countries. 
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24. The open registry fleets' share of world shipping has grown from 
27% to 35%, but this conceals some sharp changes. The LIberian 
fleet is now a third smaller than it was in 1980, the Panamanian 
fleet is twice as large and the Cypriot fleet is eight times 
larger. In the recent years, the newer open registries, such as 
Vanuatu, St. Vincent and Antigua, have grown sharply and have 
Intensified the competition between open registries to attract 
shipowners. 
25. However, the most remarkable feature of recent years has been the 
growth of "offshore" or "international" registries. These registers 
differ from open registries in that ships operating on the former 
fly the flag of the country concerned.**) By June 1988, the 
Norwegian International Registry had attracted 241 ships of 12.2 
million tonnes deadweight within a year of Its establishment. Most 
of these were transfers from the main Norwegian registry but an 
estimated 40% were repatriated from other flags. By the end of 
1987, the Isle of Man, one of the UK's second registries, had 
attracted 112 ships of 2.3 million gross tons and there was more 
tanker tonnage registered In the Isle of Man than in the UK itself. 
The Bermudan registry expanded too, to stand at 3.7 million gross 
tons at mid-1988, reflecting in part the flagging-ln of tankers in 
order to gain Royal Navy protection in the Gulf. Within days of 
opening in August 1988, the Danish International Register had 
attracted a large part of the fleet from the main Danish registry. 
(c) Relative ageing of the Community fleet 
26. However, apart from the case of the Federal Republic and Denmark, 
the reduction of older tonnage through flagging out as well as 
increased scrapping has not been accompanied by a modernisation of 
the Community's fleet. The Community-registered fleet is now older 
than most of its competitors (Table 8). There are, of course, 
variations between member States reflecting, inter alia, the 
different compositions of their fleets. Thus, over 70% of ships 
registered in the Federal Republic are less than 10 years old and 
in Denmark 45% but in the UK and Spain it is 34%, in France and 
Greece 27% and Italy 17%. For the Community as a whole, the average 
Is 34%, compared with an OECD average of 40%, 39% for COMECON and 
30% for open registers. In the rapidly growing fleets of Hong Kong 
and Taiwan, half the tonnage Is under ten years old. 
27. The relative ageing of the Community fleet reflects the reduced 
level of investment in new ships. This is in some cases a fully 
justified decision In an oversupplied market. In other cases, 
however, it reflects reduced possibilities because of reduced cash 
flow. In any event it means a reduced opportunity to benefit from 
developments in shipbuilding design and construction aimed at 
increasing operational efficiency and reducing running costs. The 
continuation of such a trend would contribute further to a loss of 
competitiveness in the Community fleet. 
(*) See also section 11.(3) below 
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(d) Shrinkage in employment 
28. The contraction of the Community fleet and the development of more 
technologically advanced ships with lower manning requirements has 
led to reduced seagoing employment (Table 9). The total number of 
seafarers employed in the Community fell by about 138,000 or some 
45%, between 1980 and 1986 to barely 169,000. In 1980 the 
Community-registered fleet employed about 54,000 seafarers of 
nationalities other than that of the flag state out of a total of 
about 307,000. Although precise figures are not available, the 
number of Community nationals on board vessels registered in ... 
another Member State is limited, the largest part of non-domiciled 
seafarers being nationals of third countries. Their number had 
dropped to about 18 600 in 1986, this reduction being accounted for 
to a large extent by the reduction by about 23,800 in employment of 
non-national seafarers in the Greek fleet and by about 8 200 in the 
UK fleet. 
29. Comparable information is not available for non-seagoing employment 
in the Industry, but this too has probably declined. In addition, 
there have been significant job losses in related industries such 
as shipbuilding and ship repair, the bulk of the orders for which 
come from Community shipowners. 
(2) THE COMPETITIVE DISADVANTAGE OF THE COMMUNITY FLEET 
30. All world fleets have faced the problem of excess capacity 
aggravated by recession and continued heavily subsidised 
shipbuilding especially in the Far East. However, the acute 
competition and cuts in freight rates have led to the relatively 
much greater decline in the Community fleet in a position of 
comparative disadvantage. The previous communication identified the 
loss of comparative advantage as a main factor in the decline. In 
the past Community fleets have countered competition by maintaining 
a technological lead and providing a higher quality of service. 
However, in recent years third country fleets have expanded with 
modern vessels to at least match technically the Community fleet 
and the cost disadvantages of operating under Community flags have 
proved too great for many shipowners. Whilst world market 
conditions have now improved very significantly, the problem of 
comparative disadvantage remains. 
31. In part there have been the growth of protectionist measures by 
third countries and unfair pricing practices. The Council 
Regulations on coordinated action to safeguard free access to 
cargoes in ocean trades and on unfair pricing practices in maritime 
transport are now available to combat such practices*1). 
32. To compete effectively, however, Community shipping has to face the 
problem of loss of comparative advantage. Shipowners when flagging 
out have emphasised in particular the importance of reducing crew 
costs in making their decision. Third country crews have been so 
much cheaper not only because basic wages have been lower but also 
because the seafarers' taxes and social security contributions 
(1) ÔJ L 378 31.12.86 
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(payable by the seafarer and employer) are lower or non existent. 
Tax treatment of shipping companies must also be taken into account 
in this connection: a company established in an open register 
country does not pay any corporate income tax. 
33. The importance of crew costs in the total costs of a vessel varies 
considerably with the age, category and financing of a vessel and 
the tax system under which the shipowner Is operating his business. 
In the first year of a new vessel of relatively high capital cost 
such as a container vessel the allocation for depreciation and 
.Interest may be substantial. After amortisation and loan repayment 
crew costs become a more significant consideration. However, in 
either case, the degree of competition is sufficiently acute for 
shipowners to examine carefully the possible cost savings of 
employing third country crews under the flags of convenience or 
alternative registers with less stringent crew nationality 
conditions. The fluctuation of currency exchange values can also 
prove decisive in certain circumstances. 
34. The studies for the Commission referred to above*1) provide 
examples of such variations based on certain fixed assumptions. One 
example of a container vessel of 1500 TEU operated by-a UK company 
had a total cost structure in the first year dominated by 
depreciation of 58% and loan interest 18% with fuel 10%, and net 
salaries 7% with wage taxes 2%. By the fifth year the balance of 
the cost structure had altered to depreciation 31%, loan interest 
21%, fuel 16% and net salaries 12% with wage taxes 4%. In the case 
of a cheaper bulker vessel capital costs as a proportion of total 
costs are realtively low and by the twelfth year costs for the crew 
could come close to half of the ships overall costs (about 46% In 
the example given in Table 10). The low purchase price of bulkers 
in recent years has accentuated this position* Further examples and 
details are given in Annex 5 and Table 10 (see also footnote*2)). 
35. The age structure of the Community fleet (Table 8), with a high 
proportion of vessels above 10 years old, Is especially relevant 
from this point of view. The development of more advanced vessels 
with lower manning requirements should help Member States with 
relatively high manning costs by reducing the relative importance 
of this cost element (on this subject see Section VI.1 - Manning 
and Research). Furthermore there are significant cost advantages 
especially In fuel consumption and maintenance which can be gained 
by Investment in modern vessels. 
(1) See footnotes 2 to paragraph 6 
(2) Another study (source below) has suggested that running costs of a 
German registered vessel could be reduced by 30% on average by flagging 
out of which 90% was represented by savings on crew costs. Such figures 
emphasise at least In Germany the Importance of crew costs In the 
consideration of alternative sltl» registers by Community shipowners and 
give an indication of the seals of the problem In maintaining 
competrtlvity. 
Source: Schlffahrtsgutachten vom Institute of shipping economics and 
logistics, Bremen, vom 30.9.87 Untersuchung von Massnahmen zur mit te I -
und langfrIstlgen Slcherung der deutschen Seeechlffahrt im Auftrag der 
Bundeelaender Bremen, Hamburg, Nledersaehsen und Schleewlg - HoIstein. 
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36. Whilst technological developments have made possible significantly 
reduced manning scales as compared with the past, In some Member 
States the relevant regulations have not been adapted accordingly. 
As a result, these Member States' fleets* are now burdened with an 
additional handicap which could be alleviated by the adoption of 
more appropriate manning scales. 
37. Furthermore, in certain Member States shipowners are as a rule 
required to build their vessels in the national shipyards, at 
prices higher than they would pay In the world market; and, in. at 
least one country, when permitted to buy abroad they have to pay an 
import duty. The resulting burdens on the price of the ship are 
quite heavy; and the position becomes more difficult If this comes 
on top of antiquated manning scales and any other disadvantages, 
vis a vis competitors. In respect of crew cost elements mentioned 
above. 
38. During the last year, the problems facing the shipping industry 
have eased to some extent, as economic recovery and the scrapping 
of surplus ships have brought supply and demand for shipping Into a 
better balance, although the position varies from sector to sector. 
However, such changes in economic conditions do not eliminate the 
structural comparative disadvantage which Community shipping 
suffers as against many third country fleets - except to the extent 
that certain Member States have already taken measures to improve 
the competitiveness of their shipping industry. 
(3) MEASURES TAKEN BY MEMBER STATES 
39. Faced with the increasing tendency for shipowners operating under 
their national registers to transfer their vessels to open 
registers outside the Community, or leave the Industry altogether, 
the Member States havs responded In a variety of ways. Measures 
have been introduced with the main aim of reducing operating costs. 
A number of cost factors depend on government Intervention - in 
particular, taxation of shipping companies and seafarers and social 
security contributions - and It Is in these areas that Member 
States have started to act. In addition, some Member States have 
Introduced financial aid to shipping companies In the form of 
operating subsidies or aid for the repatriation or training of 
crews. 
40. In a number of Member States, the use of existing offshore 
registers has been greatly expanded, or new offshore or 
"International" reglstsrs have been established. By means of such 
registers, Member States compete to lower costs by easing the 
conditions under which vessels are operated. These reduced 
operating costs of shipowners may be achieved by lower registration 
costs and little or no taxation. However, a common character letic 
of such registers Is the possibility of replacing Community 
seafarers by employing non-community seafarers on non-Community 
wages and conditions. Traditionally, these seafarers have come from 
developing countries, particularly thoss of the Far East, but 
COMECON countries are now becoming important too as suppliers of 
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officers as well as ratings. By replacing Community seafarers in 
this way, shipowners attempt to meet the competitive advantage of 
non-community operators who employ crews from low-wage areas of the 
world. 
41. Among the registers whose use has been expanded in this way are 
those of the Isle of Man, Hong Kong, the Cayman Islands and 
Bermuda; Kerguelen (French Antarctic Territory); and the Dutch 
Antilles. In addition, Danish and German International Registers 
have been set up, following the successful model of the Norwegian 
International Register. A new register is also being founded in 
Luxembourg, with the cooperation of the Belgian authorities. 
III. THE NEED AND SCOPE FOR COMMUNITY ACTION 
(1) NEED FOR A COMMUNITY FLEET 
42. There are three main lines of economic and commercial argument 
which call for the need to support a merchant fleet registered 
in the Community and manned as far as possible with Community 
seafarers. These arguments are relevant both for national and 
Community measures and acquire additional significance within 
the context of the effort to complete the internal market. 
43. The first consideration is that shipping is strategically vital 
for the Member States and for the Community itself as the 
world's leading trading area and there should not be an 
overdependence on third country fleets. Shippers should have 
the option of using a competitive Community fleet, at least 
controlled by Community interests but preferably flying a 
Community flag, for carrying their imports and exports. 
Sometimes indifference Is expressed about the flag of the 
vessel carrying goods as long as the price Is competitive. In 
the long run the Commission considers however that the loss of 
a Community fleet could have an adverse influence on the 
quality and cost of transport to and from the Community and 
damage the Community's trading position. 
44. Second, there is employment generated by the Community fleet. 
There is a strategic need not only to retain Community vessels 
but to maintain a force of well trained experienced seafarers. 
As noted above there remains a significant but fast declining 
number of Community eeafarers. The uncertain prospects have 
also made the profession less attractive for new recruits and 
the numbers in maritime academies have been dwindling. At a 
time when the Community gives particular attention to the 
social dimension of the Internal market, it needs to provide a 
perspective to the people employed in the shipping industry. 
45. It is Important also to remember employment In related services 
and industries. To some extent services such as insurance have 
many clients on third country registers but others such as 
- 12 -
shipbuilding are very much dependent on the health of national 
fleets. There seems little doubt that a further decline in the 
Community fleet would damage the interests and employment in 
these associated sectors. 
46. A third concern is the loss of the direct contribution made by 
Member State fleets to the balance of payments through their 
operation both in home trades and in cross trades. 
47. In addition to these economic and social considerations, Member 
States may have defence policies which depend on the 
availability of Community vessels and experienced Community 
seafarers. 
(2) THE SCOPE FOR COMMUNITY ACTION 
48. The decline of the fleet is, as seen above, a matter of concern 
for both the Member States and the Community. The assessment 
of the facts presented in Chapter II leads to the conclusion 
that the downward trend in ownership, flag and crew of the 
Community fleet can only be stemmed by active policies. Member 
States have started adopting a variety of measures aimed at 
stemming the decline and retaining vessels under their flags. 
The challenge for the Community is whether it shall, and if so 
how, contribute to redressing the situation of the European 
shipping industry. 
49. In a situation where the Community is completing its internal 
market for goods and services in general it cannot allow a 
fading away of its presence on the world shipping market and a 
drifting apart of Member States' own national policies of 
assistance to their fleets, with the consequent danger of 
increasing disparities inside the Community and distortion of 
competition between Community shipowners. The question as to 
how the Community should contribute, beyond trying to secure 
free and fair competition in the world shipping market through 
the implementation of the package of Regulations adopted in 
December 1986, needs further consideration. 
50. First the objective must be clear. The objective of the 
Community cannot be to seek that as many ships as in the early 
80's be owned by nationals of Member States or shipping 
companies established in the Community. Nor is it necessary 
that all ships owned by nationals of Member States are 
regletered in one of the Member States registers or manned 
totally by their nationals. It is sufficient that the three 
elements, namely Community ownership, registration and crew are 
achieved to a relative extent. The degree of meeting this 
requirement depends on the situation of the world shipping 
market,* the structural changes taking place and the extent to 
which Member States and the Community can assist the fleet. 
51. The aim of this assistance is reduction of disparities in 
operating conditions between the Community fleets and their 
foreign competitors insofar as the operating 
- 13 -
conditions in Europe adversary affect the costs of European 
operators. The shipping industry Is, like certain other 
industries of the Community, facing strong competition from 
third countries. But shipping is more vulnerable than 
textiles, steel or agriculture since it has to face 
International competition without any help from external 
Community customs borders or other measures of foreign trade 
policy. In short, there is no internal Community shipping 
market as distinct from the world market. As agreed by the 
Council In the debate preceding the adoption of the package of 
Regulations in December 1986, even sea transport between Member 
States of the Community is open to anybody from the rest of the 
world. 
52. Therefore the normal function of the Community of harmonising 
conditions of competition between the Member States is only 
relevant to shipping Insofar as It might be a by-product of an 
adjustment of the European operating conditions to those 
existing on the world shipping market. 
53. The Commission believes that an action programme is necessary 
to help the Community shipping industry stem the decline of the 
fleet. This action programme must meet a number of criteria: 
It must be in line with the non-protection 1st shipping 
policy of ths Community, based on the principle of free and 
fair competition in world shipping; 
It must be effective in responding to the situation facing 
the Industry; 
It must be capable of speedy introduction; 
It must prsvent the growing divergence between Member 
States policies which are tending towards a "beggar thy 
neighbour" effect and, as far as possible, reduce existing 
divergence; 
It must maintain, to ths highest possible proportion, 
Community employment In the sector and provide a 
perspective to thoss employed in It; 
It must not Isad to the undermining of Internationally 
agreed safsty and environmental standards and employment 
conditions; 
It must not drlvs up freight rates to the detriment of 
shippers; 
It must be adapted to the financial possibilities of the 
Member States. 
54. The Commission has considered what scope there Is for action to 
be taken by the Community which would meet the above objectives 
and criteria. It has concluded that such action should be 
taken in three ways: 
- 14 -
(i) by the setting up of a Community register of ships flying 
the European Flag in addition to their national flag; 
(ii) by the clarification of the Commission's approach to 
fiscal and financial measures taken by the Member States; 
and 
(iii) by a set of other actions and accompanying measures, as 
already referred to in paragraph 5, by which the position 
of the fleet could be improved. Some of these actions and 
measures can be linked to the Community register. 
Subjects (i) and (iii) above are dealt with in the following 
two sections, respectively. Fiscal and financial measures are 
the subject of guidelines adopted by the Commission for the 
examination of state aids to Community shipping companies.**). 
IV. A COMMUNITY SHIP REGISTER AS A MEASURE TO STEM THE DECLINE OF 
THE COMMUNITY FLEET. 
55. The Commission has investigated the possibility of setting up 
an EC register, whose ships would fly the Community flag. 
Whilst the setting-up of a single Community register cannot be 
seen as a short-term prospect, the establishment of a parallel 
register would be technically and legally feasible. Under this 
arrangement ships would remain on the register of a Member 
State, and would remain under the control and jurisdiction of 
the Member State. But they would also be eligible for 
registration in the Community register, subject to certain 
conditions intended to ensure that the register serves its 
purpose of contributing to the maintenance of a Community 
shipping fleet and a workforce of high quality Community 
seafarers. 
56. There are obvious attractions in a single Community register as 
a replacement for the present assortment of registers with a 
variety of conditions linked to Member States to different 
degrees. The legal and practical implications of a single 
Community ship register would need however careful examination. 
57. It has to be recognised that existing maritime law and 
conventions vest jurisdiction and control in administrative, 
technical and social matters In the national state. The 
administrative needs of a quality independent register include 
a competent inspectorate to secure compliance with 
international conventions and enquire into maritime casualties. 
There are also policing and legal functions which can include 
detection and dealing with fraud and the arrest and enforced 
sale of vessels if necessary, as well as the ability to act in 
the case of vessels detained or confiscated in third countries. 
There is no short-term prospect for setting up a single 
independent registry for the Community. 
58. The Community can play a fuller role In the international 
mar itime organisât ions dealing with the technical and social 
aspects of shipping; to this end the Commission wi11 exploit as 
(*) èEC(ÔÔ)921 
4) 
- 15 -
far as possible the present status of the Community as an 
observer. In time the Community could formally accede to IMO 
and ILO conventions and accept certain responsibilities. This 
however would first require amendment of those conventions to 
make Community accession possible. 
59. Alternatively, as a first step, the Community can set up a 
parallel register to Member State registers. Vessels which are 
registered in a national ship register of a Member State, while 
staying in that register, would also be eligible for 
registration in a Community register, provided that adequate 
safety and social standards on board such vessels are being 
enforced and will be enforced by the Member States concerned. 
Vessels acquired by Community vessel owners (as defined in 
Annex 1, Article 3.2) on the basis of a bareboat charter and 
entitled to fly the flag of a Member State would also be 
eligible, under certain conditions. 
The Commission reminds the Member States that the provisions on 
the admission to the national register have to respect the 
fundamental principles of the EEC Treaty, especially with 
regard to the prohibition of discrimination on the grounds of 
nationality and the right of establishment. 
The parallel register would set minimum requirements for the 
conditions with respect to the nationality of seafarers and 
thereby seek to obtain the observance of such requirements 
throughout the Community. 
60. Conditions for registration as a Community vessel would include 
a requirement that at least a specified number or proportion of 
seafarers on board should be nationals of a Member State. Such 
a condition would place a limit on the number of foreign and 
non domiciled seafarers who could be employed by Community 
shipowners, and safeguard the employment of a minimum of 
Community nationals employed on board the vessels concerned. 
Owners of ships on the EC register would however have to employ 
Member States' nationals in greater numbers than the specified 
minimum, where this was a requirement of the Member State 
register involved. Such a requirement must be applied in 
conformity with the fundamental principles of the EEC Treaty on 
the prohibition of discrimination on the grounds of nationality 
and the free movement of workers. Ships on Member State 
registers which permit a lower proportion of Member States' 
nationals would be admitted to the EC register only if they 
complied with or exceeded the EC minimum. 
61. The crew nationality requirements would aim to achieve one of 
the objectives of the Community ship register, which is to 
secure the employment of European seafarere in highly-skilled 
functions and as far as possible those In other functions. 
While each Member State has the right to seek full employment 
opportunities for Community nationals in the latter functions 
through national measures, it would be unrealistic to give an 
- 16 -
assurance that they could invariably remain employed at the 
wage level of the Member State, at least not for the Community 
as a whole. The Community ship register, while requiring a 
substantial European element in the manning of the highly-
skilled functions, does not prevent shipowners of ships 
registered in it from employing third-country seafarers at 
rates agreed with their representative organisation, provided 
that the provisions of the ILO wages, hours of work and Manning 
(Sea) Recommendation (No 109) were respected. Equally, social 
security for seafarers of third countries must be provided on a 
level which reflects the standards of the country where the 
seafarer is resident, following the provisions of the ILO 
Social Security for seafarers (Revised) Convention, No 165. 
As far as the highly skilled functions are concerned, the 
requirements for the Community ship register reflect the trend 
in some Member States to secure the employment of officers and 
certified seamen by requiring a minimum number of seafarers 
with national or recognised certificates. In determining such 
minimum requirements for the Community register, account is 
also taken of the differences in operating costs with Community 
shipowners' major competitors and the need that they be reduced 
to an acceptable level, which, together with other competitive 
advantages, would be sufficient to compete effectively in the 
worId market. 
62. The flying of the Community flag would then be an indication 
that the vessel concerned met high standards of quality, 
reliability and safety. Within the EC register obstacles to 
the transfer of ships from one Member State register to another 
could also be removed through the recognition of technical 
equipment. Similarly, the free movement of seafarers between 
vessels on the EC register would also be facilitated through 
the mutual recognition of their qualifications. 
63. Finally, advantages of "a fiscal and financial nature made * 
available by Member States should be used in a way which make 
them appropriate to reach the objectives pursued by the 
creation of an EEC register. In considering such advantages, 
regard will need to be had to the objective of preventing a 
divergence, and achieving a convergence, of the conditions of 
competition among Member States. The various possible fiscal 
and financial advantages which Member States will wish to 
consider, the contribution which they could make to restoring 
the competitive position of Community shipping, and the 
approach which the Commission intends to adopt in relation to 
such measures, are discussed in a Commission document on the 
subject.**) 
64. From a broader perspective, the establishment of a parallel 
Community register would have other obvious attractions. The 
European flag flying on Community vessels throughout the world 
would be a powerful reminder of the Community presence in 
global trade, and a symbol of the Community as a single trading 
entity. The register would also serve as a focus for 
discussions to achieve a greater cohesion in the Community of 
operating conditions. 
(*) "Financial and Fiscal Measures concerning Shipping Operations with 
Ships registered in the Community", SEC(89)921 
- 17 -
65. Technically and legally speaking the setting up of a parallel 
register is not a major problem. It is not in conflict with 
the new UN Convention on conditions for registration of ships 
since it does not lead to registration in two different states. 
The ship remains on its national register and the legislation 
of the Member State governs the control and jurisdiction over 
the vessel. Indeed, if a ship Is entered in the Community 
register, it would be ascertained that the registration on the 
national register still existed. The entry itself could be 
relatively simple with no transfer of ownership, renegotiation 
of lease, loan agreements or mortgages, re-survey and re-
measurement . 
66. In general such a register would secure the discipline needed 
to make a system of harmonised, yet less burdensome, operating 
conditions better workable. Moreover, it would be the 
intention by adopting sufficiently attractive conditions to end 
the necessity for setting up and maintaining second or offshore 
registers. 
A proposal for a Council Regulation for the establishment of a 
Community register as above described is attached at Annex 1. 
V. AREAS FOR FURTHER ACTION & ACCOMPANYING MEASURES 
(1) MANNING AND RESEARCH 
67. Manning costs are the main component of the competitive 
disadvantage of the Community vis-à-vis its competitors of 
third countries. The same factor also largely accounts for the 
disparity between the operating costs of the ships belonging to 
the European fleets. 
68. Research can contribute to the objective of improving the 
competitive position of Community fleets by leading to 
improvements in technical efficiency which result in lower 
operational costs through improved fuel efficiency and reduced 
maintenance and manning costs. Third country fleets can also 
take advantage of such developments but Member State fleets 
because of relatively high manning costs will benefit in 
particular from advances which lead to reduced crew sizes. 
69. There has been some consideration of manning costs as a 
proportion of total running costs in Chapter III. A further 
example has been based on the manning costs of a container ship 
of 1500 TEU (1) which show that manning costs (basic wages, 
overtime, leave pay, social security contributions, retirement 
provisions, crew rotation, travel and victualling) amount to 
50% or more of operating costs with the exceptions of Portugal 
and Greece. 
70. Differences between the annual costs of a sailor on board 
Member States' vessels*1) have to be related to the various 
systems of social security (e.g very high contributions in 
France), or to the different levels of wages (Italian case). 
(1) See Annex 5 
- 18 -
The negative effects of this situation (together with 
technological improvements) on the number of seafarers employed 
are shown in Table 9 of the Statistical Annex: diminution of 
the supply with the main effects of a decline of the number of 
Community seafarers on board of the ships of the Member States, 
reduction of crews, and recruitment of low cost manpower. 
71. In that respect the tendency can now be seen in Member States 
to modify their strict regulations concerning the size and 
composition of the crew and to allow, under certain conditions, 
the interested parties to determine their needs, case by case, 
with reference to the equipment and the qualification of the 
staff on board. 
72. In addition, using the most specialised techniques and offering 
high-quality services are important considerations in seeking 
to maintain a competitive position in world shipping. 
73. Taking into account the changes which have occurred in the 
equipment of ships and new transport techniques, the 
Commission considers that the rationalisation of work on board, 
adapted to the needs related to innovation and restructuring, 
constitutes an appropriate instrument for improving 
productivity and as a consequence the competitiveness of the 
sector. 
74. The Commission believes that to achieve a balanced 
rationalisation, consultation and negotiation have to be 
developed, by obtaining the cooperation and the commitment of 
social partners in the definition of the tasks and functions of 
staff on board to achieve safe navigation consistent with a 
commercial management ashore. 
75. These measures of rationalisation have to be accompanied by 
standardised automation programmes to develop the exchange of 
data ship to ship, ship to land and between users: shipowners, 
ports agencies, administrations and others. 
76. Finally such a rationalisation conceived for safety as well as 
for commercial management needs, requires that training 
programmes, both theoretical and practical, are developed in 
view of both the needs of the ships under operation and of a 
continuing innovating process in the management of the ship. 
77. The improvement of productivity based on advanced and/or 
improved techniques requires continuing progress in research. 
Some Member States have undertaken action in that respect and 
have started research programmes on the ship of the future. t 
is in that field that cooperation and coordination at Community 
level can be most fruitful. 
78 In the context of the framework programme for Community 
activities in the field of research and technological 
development*1), the Commission is finishing the preparatory 
(1) Ô.J. L3Ô2 24.10.87 
-19-
work of a four-year programme for Research and Development in 
the field of Transport, a section of which is devoted to 
Maritime Transport. 
The main objectives of the transport programme are the 
improvement of the efficiency and the competitiveness of the 
transport system, the improvement of safety and work conditions 
and the protection of environment. 
79. Amongst the themes of research relating to maritime transport 
special priority is being given to: 
research into the interface between the human being and the 
ship and on-board equipment, including investigation of the 
possibility of integrating and automating certain 
functions; and 
research into the use of manpower, with a view to 
determining the optimum crew for different types of vessel. 
80. The new BRITE/EURAM Programme covering Research and Development 
on manufacturing technologies and advanced materials will 
include some R&D topics relevant to the shipbuilding 
industry. These topics deal with material technology, design 
methodologies and assurance, manufacturing technologies and 
processes such as shaping, assembling and joining. 
81 It is worth mentioning also the COST projects. Two of them 
concern safety at sea and one the maintenance management of 
ships. As regards safety, the project COST 301 was directed at 
shore-based marine navigation aid systems. An executive and a 
main report of this project have been published*1). The 
follow up to COST 301 consists of a new research COST project, 
called 311, concerning the simulation of maritime traffic, and 
a research project on the design and assessment of a vessel 
traffic management system, which is to be included in the 
Research and Development Program mentioned in para. 78 above. 
Project COST 308 relating to maintenance of ships commenced in 
1987. Through the management of maintenance systems on board 
the expected results of this research will contribute to 
rationalisation of the functions of crews. 
(2) TECHNICAL HARMONIZATION AND STANDARDIZATION AND THE 
TRANSFER OF SHIPS BETWEEN COMMUNITY COUNTRI ES 
82. One measure under consideration by the Commission is the 
achievement of mutual recognition within the Community of the 
technical equipment of ships. Costs to shipowners transferring 
vessels between Community ship registers may arise from the 
need to change equipment completely, supplementary work to 
existing equipment, additional testing or approval fees and the 
time in delays. In the past mutual agreement on standards has 
been achieved only after long detailed discussion between 
experts and a considerable amount of such work will still be 
necessary. However, an impetus has been given to the work by 
the need to achieve the Single Market. 
(1) CEL COST EUR 11250 EN Luxembourg 1987 
CEL COST EUR 11304 EN Luxembourg 1988 
- 20 -
83. One approach considered by the Commission has been that 
representatives of marine equipment manufacturers and the 
European Association of Classification Societies should draw up 
a list of those items of marine technical equipment on which it 
is felt that there can be agreement on mutual recognition. 
This list would be then offered for consideration by the 
national administrations and clear the ground for discussion on 
other items. 
84. This idea has been explored with the European Associât ion of 
Classification Societies which produced a list of around 400 
items; for each item information was provided on whether there 
is a need for certification by the particular national 
regulatory authorities, limited mutual recognition of the 
certificates of other authorities or general recognition. The 
broad finding was that the authorities accepted only equipment 
approved by themselves. Where there were deviations from the 
rule, cases tended to be considered on an individual basis. 
85. The Classification Societies recognised the need to maintain 
high safety standards and proposed: 
initial control on type approval of marine and marine 
related equipment; 
initial control on installations and laboratories where 
type approval is carried out; 
initial control on manufacturers of marine and marine 
related equipment and 
regular control on maintenance of required standards and 
compliance with regulations for marine and marine related 
equipment. 
The Classification Societies would be prepared to set up and 
operate such a system acting on behalf of the governments 
concerned. 
86. However, in view of the fact that the Community is now in the 
process of establishing EC-wide standards and certification 
procedures, so that products meeting stipulated "essential" 
requirements concerning health, safety, the protection of the 
consumer or the environment can be marketed freely throughout 
the Community, it seems that the time has come to reconsider 
the foregoing initiatives in the framework of the Community's 
New Approach on Technical Specifications, Testing and 
Certification, adopted by the Council in its Resolution of 7 
May 1985 (OJ No. C 136, 4.6.85). 
87. The situation in this sector is, however, complicated by the 
fact that the international character of technical regulation 
of the shipping industry is highly developed and it would be 
undesirable for the Community to follow an approach which was 
- 21 -
independent of developments within IMO. It would still be 
possible, however, to imagine a situation in which the 
Community, acting within the constraints of the international 
framework, developed a new approach to the implementation of 
international recommendations within its jurisdiction. 
This approach could be summarized as follows: 
The Community would, through a Directive, agree upon a 
basic set of essential requirements for ships and their 
equipment (perhaps based upon existing IMO documentation); 
In the light of those agreed essential requirements, the 
Community as such would henceforth negotiate in IMO 
discussions on the development of new international safety 
recommendations; 
Adoption of future IMO recommendations as new or revised 
essential requirements would take place through a 
Community-1 eve I decision, on the basis of a proposal 
submitted by the Commission to an appropriate regulatory 
committee; 
In its decisions on how to implement adopted IMO 
recommendations, the Community would decide case-by-case to 
what extent it would be appropriate to follow the new 
approach to technical harmonization, that is: 
. to lay down technical specifications and conformity 
assessment procedures in Community legislation, or 
. to delegate the task of defining such specifications to 
standardization bodies, thereby giving them a voluntary 
character which nevertheless provided a presumption of 
conformity to the essential requirements. 
88. This approach would have to be supported by Initiatives in the 
shipping industry and the related marine industries to create 
the necessary infrastructure in the voluntary sector, both in 
the European standardization bodies and in the future European 
Organization on Testing and Certification, in order to ensure 
that sufficient expertise is available to develop the 
standards, test methods and certification procedures needed 
under the new approach. Following consultations of the main 
interested parties and national administrations during the next 
12 months, the Commission will submit proposals concerning the 
different areas of action. 
89. The Commission considers that ships which will be accepted on 
the Community ship register should not be hindered by technical 
obstacles in being transferred between Community shipowners and 
Member States' flags. To achieve this, the period until the EEC 
register is established has to be used so that any technical 
obstacles are removed. Accordingly, the EEC register will 
Include a provision to the effect that any vessel on the 
- 22 -
register which has valid certificates and classification and 
which meets the essential technical requirements to be laid 
down by the Council according to the provisions of the Treaty 
by the time the EEC register is established, may be transferred 
to the register of another Member State without the imposition 
of additional technical requirements. 
90. Meanwhile, the Community already disposes of an instrument 
whereby deviations between national technical requirements can 
be limited. Directive 83/189/EEC requires that all proposed 
national technical regulations (that is, technical 
specifications which are made obiigatory by law) are notified 
to the Commission and the other Member States, and may not be 
adopted until a-certain time limit" has elapsed. Adoption of 
such measures may be delayed if the Commission or another 
Member State considers that they will create obstacles to the 
free movement of goods. In this context the Commission notes 
with regret that the Member States have until now not respected 
the obligation to notify technical specifications in the sector 
concerned. The Commission Is therefore considering to initiate 
infringement procedures in this respect. 
(3) SOCIAL MEASURES 
91. In order to reduce differences in working conditions in the 
Community fleet attention should be given to social measures. 
These should lead to a greater coherence In the maritime sector 
in relation to the international context in which the fleet 
operates. This would involve strengthening the dialogue and 
co-operation between the social partners especially in the work 
of the» restructuring of the fleet and enable individuals and 
-~~**~~"Duslnees*s to^faee^better the challenge of modernisation. 
92. The Commission will, therefore, consult with the Joint 
Committee on Maritime Transport*1) in developing measures 
relating to: 
the improvement of specific working conditions in the 
shipping industry; 
the drawing up of common programmes of training and 
retraining adapted to the needs of technological change; 
mutual recognition of diplomas, licenses and certificates 
of competence. 
93. In respect of training programs, attention will be given to 
training needs in connection with rationalization of work on 
board and in particular in connection with the multi-functional 
concept of work. (See also para. 76 in Section V.1). 
94. In respect of the last item mentioned in para. 92 above, the 
recently adopted Council Directive 89/48/EEC of 21.12.88 "on a 
general system for the recognition of higher-education diplomas 
(1) OJ No. L253, 4.9.87 
- 23 -
awarded on completion of professional education and training of 
at least three years' duration"*1) will cover certain 
functions on board ships. However, for those not falling within 
the scope of the Directive, It will be necessary to make 
proposals to achieve comprehensive coverage of mutual 
recognit ion. 
95. In the specific field of maritime transport the International 
Convention on Standards of Training, Certification and 
Watchkeeping for Seafarers (1978), adopted in 1984, lays down 
internationally accepted minimum standards for the training and 
certification of Masters, Officers and Ratings. It also 
establishes watchkeeping standards. All Community countries 
have ratified this Convention which can serve as a useful 
instrument to achieve mobility and equality of standards within 
the Community. 
96. The Commission considers that in the case of vessels which have 
joined the proposed EC register it would be particularly 
inappropriate for any unnecessary obstacles to exist in the way 
of free movement of seafarers between vessels of the Member 
States. Therefore, the proposed register will include a 
specific provision that seafarers of any Member State will be 
free to work on any vessel on the register provided they meet 
the minimum requirements for professional training and 
experience laid down in the IMO STCW 1978 Convention. 
(4) ENSURING THE OBSERVATION OF INTERNATIONAL IMO/ILO STANDARDS 
97. Whereas the observation of internationally applicable IMO and 
ILO standards by all ships is essential for reasons of safety 
of ships and crew and for environmental protection, it can also 
have a beneficial effect for the Community fleet through 
eliminating unfair competition from ships not observing those 
standards. 
98. This is an area for continuing action, and the Commission plays 
an active role with a view to strengthening the enforcement of 
Port State Control. It also intends to play a full role in the 
protection of the marine environment and the fight against 
pollution. The Commission, wi11 participate, to this end, in the 
appropriate meetings of the International Maritime Organization 
and the relevant regional agreements, such as the Bonn 
Agreement on the North Sea and the Barcelona agreement on the 
Mediterranean Sea. 
99. The Commission attaches particular priority to the effective 
application of the ILO Merchant Shipping (Minimum Standards) 
Convention, 1976 (No. 147), and has recently taken the lead, in 
conjunction with the Port State Control Secretariat and the 
maritime branch of the ILO, in achieving agreement among the 
countries subscribing to the Memorandum of Understanding on 
Port State Control on the integration of this Convention into 
the manual for surveyors. Appropriate amendments to the 
relevant Annex 1 of the MOU have been accepted, taking effect 
on 11 May 1989. The task ahead is to secure their 
implementat ion. 
(i) ÔJ No L 19, 24.1.89 
- 24 -
100. In order to strengthen the effectiveness of Port State Control 
and to ensure uniform standards of application throughout the 
Community, the Commission will continue to finance seminars for 
surveyors on specific subjects. Seminars have been held in 
Lisbon and Rotterdam on the implementation of MARPOL 73/78, and 
it is now the Commission's intention to support two such 
seminars each year on the subject of ILO Convention 147. 
101. The Commission considers that the system of Port State Control 
has been developing in a satisfactory manner although there is 
still room for improvement. The Commission, through its work 
in this field, will continue to encourage Member States to 
implement Port State Control procedures fully and effectively. 
If however this is not achieved and it becomes evident that 
competitive pressures amongst the various ports of the 
Community are undermining the application of Port State 
Control, the way to deal with them would be by writing the MOU 
into Community law. The Commission maintains on the table the 
draft Directive proposed in 1980*1) with this end in view. It 
considers, however, that the target laid down in the Memorandum 
of Understanding on Port State Control of inspecting 25% of 
individual ships entering the ports of each Community country 
should be attained if international standards are to be 
maintained and the high levels of inspection already attained 
are to continue. 
102. The Commission also considers necessary that Member States, 
which have not sofar done so, ratify all the relevant 
conventions as soon as possible, particularly MARPOL and ILO 
147, and that their provisions are applied to their own flagged 
ships as well as to those of third countries. 
103. At this stage, therefore, the Commission addresses a 
Recommendation to Member States in respect of the 25% 
inspection target and the ratification of the relevant 
conventions, as mentioned above; the Recommendation is attached 
in Annex 2. 
104. The Commission will encourage the existing trend to establish 
forms of co-operation with non-signatories of the Memorandum. 
Co-operation agreements already exist with the United States 
and Canadian Coastguards. The Soviet Union has inquired about 
possible forms of co-operation. Over the past few years 
exchanges of information on Port State Control have been taking 
place with the Maritime Authorities of Japan. Such co­
operation and the establishment of effective, concerted and 
uniform regional Port State Control systems elsewhere in the 
world will contribute to reducing sub-standard shipping in the 
world. 
(1> ÔJ C 192, 36.7.80 
- 25 -
(5) PROMOTION OF THE USE OF COMMUNITY FLAG SHIPPING FOR 
TRANSPORT OF FOOD AID 
105. During the past decade Community shipowners have pressed for 
improvements in the system of "mobilization" of Community food 
aid. This system consists generally of a package whereby a 
company ("the mobilizer") purchases the food, transports it to 
its destination and is paid a "package price" for the entire 
operation. In practice, mobilizers use vessels flying a wide 
range of flags, including occasionally flags of countries 
politically undesirable for the transport of Community aid paid 
for by the Community taxpayer. 
106. The provisions of Commission Regulation No.2200/87 on the 
mobilization of food aid were a step forward insofar as they 
opened up the possibility of forbidding the transport of food 
aid by shipowners of third countries whose practices are 
harmful to Community shipowners or who benefit from schemes 
which legally or in practice reserve cargoes for their 
shipowners. 
107. The Commission considers it necessary that EC shipowners be 
given the opportunity to offer their services for the transport 
of Community food aid cargoes. It also considers that the very 
fact that these cargoes are Community aid to third countries 
justifies that they be carried with ships flying the Community 
flag , ships registered in a Member State and meeting the 
requirements for registration in the Community register or 
ships flying the flag of developing countries pre-qualif led by 
the Commission on the basis of objective technical and social 
criteria. 
108. Measures will be taken so that mobilizers of food aid will be 
obliged to use, for the carriage of food aid, ships on the 
proposed EEC register, ships on a Member State's register and 
meeting the requirements for registration in the Community 
register or ships flying the flag of developing countries pre-
qual if led by the Commission as above. 
(6) DEFINITION OF A COMMUNITY SHIPOWNER 
109. As long ago as 1979, upon the adoption of Regulation 954/79 on 
the ratification of the UN Liner Code, the need was felt to 
jointly define a "national shipping line" for the purpose of 
the Code of*Conduct for Liner Conferences. Some Member States 
did not wish to rely only on the procedures of Regulation 
954/79 and the criteria in the Council Minutes but there should 
be no restrictions introduced which would be contrary to the 
non-discrimination provisions of the Treaty and Regulation 
954/79. The Commission made a proposal as part of its 
Communication of March 1985, "Progress towards a common 
transport policy (maritime transport)", but so far no 
discussion in depth on this proposal has taken place in the 
Counc iI. 
- 26 -
110. Also during the discussions on the proposal concerning the 
freedom to provide services which led to the adoption in 
December 1986 of Regulation 4055/86, some Member States 
supported the idea of a restriction of the beneficiaries to 
"Community shipping companies" which would be made subject to 
certain conditions, in particular, as to the capital and 
nationality of board members and even their use of ships flying 
the flag of a Member State. Only the last condition was partly 
and temporarily introduced in the phasing out of existing 
restrictions in the freedom to provide services. 
111. The measures proposed in this Communication include proposals 
for the removal of cabotage restrictions and the promotion of 
the use of Community flag shipping for the transport of food 
aid. In this context, it is clearly right to consider again the 
joint definition of Community shipowners as the bénéficiaires 
of such measures, so as to ensure that these and other rights 
and benefits attached to Community shipownership accrue only to 
shipowners with a real and substantial presence in the 
Community. A proposal for a Regulation is at Annex 3. 
112. The outcome might also facilitate the adoption of the 1985 
Commission proposal on the joint definition of a national 
shipping line. That proposal, although restricted to carriers 
to which the United Nations Convention on a Code of Conduct for 
Liner Conferences applies, also requires a real and substantial 
presence of shipowners in the Community. Its text may need 
adjustment, however, in the light of the present proposal and 
of developments since the adoption of Regulation 954/79. 
(7) REMOVAL OF CABOTAGE RESTRICTIONS 
113. With the communication which it addressed to the Council in 
1985 on maritime transport, the Commission proposed the 
application of the principle of freedom to provide services to 
the sector (C0M(85)90, Annex II-2). In agreeing to the package 
of four Regulations In the field of maritime transport in 
December 1986, the Council did not find it possible to decide 
at that stage on the application of the principle of freedom to 
provide services in respect of shipping services within the 
Member States; it therefore agreed that further consideration 
of this part of the Commission proposal was necessary. 
No progress, however, has been achieved on the subject during 
the intervening interval of more than two years. 
114. In the context of measures being proposed with the aim of 
maintaining a more competitive Community fleet, with convergirg 
conditions of operation, through the instrument of a parallel 
Community register, the Commission considers it necessary to 
make progress with the application to Member States' internal 
maritime transport of the principle of the freedom to provide 
services, in view of the completion of the internal market by 
1993. 
- 27 -
115. In this context, the Commission considers appropriate that the 
removal of restrictions on the freedom to provide services in 
Member States' internal maritime transport In respect of 
nationals and maritime companies of the Member States should be 
accompanied by conditions in respect of the vessels used to 
provide the service, so as to ensure a degree of approximation 
of operating conditions, always taking also due account of the 
special requirements of certain public services of cabotage 
which the Member States make in the general interest. The 
Commission therefore proposes that removal of restrictions is 
subject to the use of vessels registered in the Community ship 
register and which operate in short-sea trades. A proposal for 
a Council regulation concerning the application to Member 
States' internal maritime transport of the freedom to provide 
services, which incorporates the above considerations and 
supersedes the earlier Commission proposal, Is at Annex 4. 
(8) CONSORTIA 
116. During its meeting of 15/16 December 1986, the Council, when it 
reached agreement on the Competition Regulation, made a 
statement in which it invited the Commission to study inter 
alia the matter of consortia and if necessary to submit new 
proposals. The Commission undertook to submit a report to the 
Council, within one year from the date of adoption of the 
Regulation, on whether to provide for block exemptions for such 
agreements as consortia and to submit a proposal to that effect 
if necessary. 
117. In January 1988 the Commission gave its interim report in which 
it concluded that so far no evidence had been made available 
which could justify a block exemption for consortia. From the 
content of the few agreements submitted to the Commission's 
services and subsequent soundings, it seems, however, that 
there are substantial differences between consortia, ranging 
from purely technical arrangements to closely knitted 
organisations with joint marketing. There seems to be three 
main categories of agreements: 
the technical agreement (exchange of slots, equipment, use 
of terminals) 
the operational agreement (joint scheduling, pooling of 
cargoes or revenues) 
the commercial agreement (notably joint marketing). 
118. Whereas consortia which take the form of a technical 
arrangement only might be easily exempted (or in the framework 
of a block exemption excepted), the two other sorts of 
agreement could substantially restrict competition between the 
partners and as such be forbidden. Whether and, if so, how far 
a group exemption could be given for the two other sorts of 
agreements, and the conditions for such possible group 
exemption is not yet clear. 
- 28 -
119. The Commission is anxious to clarify the position of consortia 
and intends to make a report to the Council. As soon as it has 
received the necessary further information, it will give 
serious consideration to the possibility of granting a group 
exempt ion. 
(9) VAT AND EXCISE DUTIES RELATED TO SHIPPING SERVICES 
120. It is of course a generally shared concern (throughout the 
Commission) to succeed in creating a genuine single market and 
thus getting the economic as well as social benefits of it for 
Europe and its people. That is precisely the reason why the 
measures chosen to achieve this objective have to be carefully 
weighted against the actual operating conditions of a given 
economic activity, so as to avoid undesired adverse 
consequences. 
121. As regards fiscality the drive of the Community towards 
completing the internal market led the Commission to put 
forward in August 1987 a series of proposals on the removal of 
fiscal frontiers*1). The measures envisaged would introduce 
considerable changes for the Community shipping industry. In 
particular, 
passenger fares on sea voyages within the Community would 
no longer benefit the transitional exemption granted under 
the 6th VAT directive*2), and would be submitted to VAT 
rates from 4 to 9%; freight costs will be chargeable at the 
standard rate. 
- within the Community VAT - and excise duties where 
appropriate - would be added for the first time to the 
supply of ships and ships' equipment, bunker fuel and a 
number of various shipping related activities where 
intracommunity voyages are concerned. (It is not however 
proposed to charge excise duties on bunker fuel). 
These changes would in turn cause rate increases in similar 
proportions, which would obviously put the Community shipping 
industry at disadvantage if the same charges are not also borne 
by their non-Community competitors insofar as they also provide 
services in intracommunity voyages. 
122. Maritime transport being typically a world-scale operated sort 
of service and subject to a very strong international 
competition, the global fiscal principles at stake, whether on 
VAT or on excise duties, raise a number of complex issues of 
detail at the practical level to ensure equal treatment between 
Community and non-Community operators and to ensure there is no 
taxation on voyages to third countries. Balanced solutions 
will have to be worked out, also taking into account the 
(1) COM(07)320 final and following, especially C0M(87) 322 and 324, 
August 1987. 
(2) OJ L 145 of 13.6.1977. 
- 29 -
legitimate interests of an international trading sector which 
is of paramount importance for the Community in its economic 
and social as well as strategic aspects. This will have to be 
borne in mind in working out the detailed application of the 
Commission's fiscal proposals, in the light of the 
Communication of May 1989*1) on the completion of the interna 
market and approximation of indirect taxes. 
(1) CÔM (Ô9> 2ÔÔ 
ANNEX 1 
Proposal for a 
COUNCIL REGULATION 
establishing a Community ship register and providing for the 
flying of the Community flag by sea-going vessels 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 84(2) thereof, 
Having regard to the proposal of the Commission, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas shipping is an indispensable element in trade between the 
Member States and between Member States and third countries; 
Whereas the availability of a high quality and truly competitive fleet 
depends, on the one hand, on the availability of a maritime 
infrastructure within the Community including a reserve of nationals of 
Member States to serve as seafarers and, on the other hand, a cost 
level which is competitive; 
Whereas the fleet flying Member States' flags has suffered a considerable 
decline over the years and to the extent that ships have been 
transferred to third country registers, there has been a severe loss of 
employment for Community nationals; 
Whereas the efforts to meet the problem through national measures, 
inter alia the establishment of second national registers, to which 
more favourable conditions are attached, tend to disperse the effects 
of the actions undertaken and risk a distortion of competition; 
Whereas it is in the Community interest to aim at a structural 
development of a fleet of vessels, registered in Member States 
registers but also identifiable as ships serving Community needs, 
which comply with the standards of the maritime conventions, and whose 
crew includes as a minimum a specified number of trained seafarers from 
Member States; 
Whereas this aim cannot be attained without a reduction of the cost 
level; 
Whereas the Commission has developed guidelInes for the examination of 
State aids to be given by the Member States to Community shipping 
companies; 
- 2 -
Whereas the establishment of a Community ship register should serve the 
purpose of creating a channel through which national efforts can be 
converged, a pool of Community seafarers and a trade mark guaranteeing 
shippers a high quality service; 
Whereas the Community ship register will be additional to the national 
register; 
Whereas the right to register vessels in the Community register should 
be reserved for natural and legal persons having a certain link with 
the Community; whereas, however, this right should also be given under 
certain conditions to persons having a link with a given third country; 
Whereas the vessel to be registered in the Community register should comply with 
certain conditions; whereas, in particular, the vessel should be and 
remain registered in a national register; whereas the decisions on the 
admission to the national register must be taken in compliance with the 
provisions of the Treaty, 
Whereas registration in the Community register should depend on 
compliance with the safety measures required by the international 
conventions in this respect; 
Whereas the number of trained seafarers from Member States on board of 
vessels registered in this register should be sufficient to meet future 
requirements of the Community fleet; 
Whereas seafarers from non-Community countries on vessels registered in 
this register should be employed on conditions in conformity with 
internationally agreed standards, unless otherwise mutually agreed with 
their representative organisations; 
seafarers on vessels registered in this register should at 
t from the social security schemes to which they are entitled Whereas a 11 
least benef 
in the country where they are resident; 
Whereas vessels, while remaining on this register, should be able to 
transfer between the national registers of Member States without 
technical hindrance, when they comply with the essential technical 
requirements to be laid down by the Council; 
Whereas the right of free movement under Article 48 of the Treaty as 
implemented by Council Regulation 1612/681 applies to employment of 
nationals of Member States on board vessels registered in the Member 
States; whereas therefore this right applies to vessels registered in 
EUROS; whereas, however, the effective exercise of that right may be 
hindered by differences between qualifications and licences issued in 
the Member States; whereas it Is appropriate to provide for recognition 
of such qualifications and licences for seafarers for the purposes of 
employment on board vessels in the Community register subject to 
minimum requirements laid down by the Council; 
Whereas registration in this register should be reflected in the right 
and obligation to fly the European Flag; 
10J No L 257, 19.10.1968, p. 2. 
- 3 -
Whereas the Commission should be enabled to adopt implementing provisions 
concerning the establishment of the register and concerning procedures of 
registration and deregistration; 
Whereas there should be cooperation between the Community register and 
the national ship registers, including an exchange of information; 
Whereas the Member States should take the necessary measures to control 
and enforce compliance with the provisions of this Regulation; 
HAS ADOPTED THIS REGULATION: 
SECTION 1 •: Scope of the Regulation 
Article 1 - Objective 
This Regulation provides for : 
the establishment of a Community ship register for sea-going 
merchant vessels ; 
the conditions for registration; 
certain facilities accruing from such registration; 
the right to fly the European flag on these vessels in addition to 
the national flag. 
SECTION 2 : The register, vessel owners and vessels 
Article 2 : Establishment of the register. 
A Community ship register (hereafter called "EUROS") is hereby 
established in which sea-going merchant vessels may be registered in 
addition to their national registration in a Member State. 
The Commission shall register when the conditions laid 
down in Articles 3, 4 and 5 are met. It shall deregister a vessel when 
it no longer conforms to the provisions of this Regulation. 
Article 3 - Persons entitled to have a vessel registered in EUROS. 
1) The following may apply for registration of a vessel in EUROS : 
a) nationals of the Member States established in a Member State 
and pursuing shipping activities ; 
- 4 -
b) a shipping company formed in accordance with the law of a 
Member State and having its principal place of business in, and 
effective control exercised within the Community, provided that 
the majority of the capital of that company is owned by 
nationals of the Member States or the majority of the board of 
the company consists of such nationals, who have their domicile 
or usual residence in the Community. 
c) nationals of Member States established outside the Community or 
shipping companies established outside the Community and 
controlled by nationals of a Member State, if the vessels owned 
or operated by them are registered in that Member State in 
accordance with its legislation; 
2) For the purpose of this regulation, a natural or legal person meant 
in paragraph 1 will hereafter be referred to as a "Community vessel 
owner"; 
3) Where it has been agreed between a third country and the Community 
that registration of vessels in each other's register shall be 
permitted, the term "nationals of the Member States" shall, for the 
purposes only of paragraph 1(a) and (b), include nationals of the 
third country concerned. 
Article 4 - Vessels eligible for registration 
Eligible for registration in EUROS Is any sea-going merchant vessel of 
at least 500 grt, built or under construct Ion,which is already 
registered in a Member State, and entitled to fly the flag of that 
Member State and used or to be used in national or international trade 
for the transport of cargo or passengers or any other commercial 
purpose, if it fulfils the following conditions: 
a. the vessel must be and remain registered in the national ship 
register for the duration of its registration in EUROS; 
b. the vessel must be owned and for the duration of its 
registration in EUROS remain owned by a person entitled to 
register a vessel in EUROS, or operated by a Community vessel 
owner on the basis of a bare-boat charter in accordance with 
the provisions of Article 5; 
c. the vessel shall not be more than 20 years old. 
Article 5. - Bare-boat charters 
Vessels operated by Community vessel owners on the basis of a bare-boat 
charter may be registered In EUROS during the period of that charter if 
the following conditions are fulfilled: 
1. the vessel is registered as a bare-boat chartered vessel in a 
national ship register of a Member State; 
- 5 -
2. the laws of the vessel's initial flag country allow bare-boat 
registration in another country; 
3. the consent of the owner of the vessel and of all mortgage 
creditors for the registration of the bare-boat is obtained; and 
4. the bare-boat charter is duly recorded in the register of the 
vessel's initial flag country. 
SECTION 3: Safety, manning and crew. 
Article 6 - Safety. 
Throughout the period of registration the vessel must be provided with 
all certificates required by the Member State concerned. 
Article 7 - Nationality of crew. 
On vessels registered in EUROS all officers and at least half of the 
rest of the crew shall be nationals of a Member State. 
Trainees do not count towards meeting the requirements above. 
Article 8 - Wages, working hours and further labour conditions. 
Wages, working hours and further labour conditions of seafarers, who 
are not nationals of a Member State, on board vessels registered in 
EUROS, shall be in accordance with the ILO Wages, Hours of Work and 
Manning (Sea) Recommendation (No 109), 1958, subject to any arrangement 
on collective wages agreed upon with organisations as referred to in 
Article 9. 
Article 9 - Collective wage agreements 
1. If Community vessel owners who have registered the vessels which 
they own or operate In EUROS employ seafarers who are not nationals of 
a Member State such seafarers may be employed only on the basis of 
collective wage agreements concluded with trade unions or similar 
organisations of the country where they are resident. 
2. No collective wage agreement may be concluded with a foreign trade 
union or similar organization on behalf of nationals of a third 
country if such trade union or organization does not satisfy the 
conditions of ILO Convention No. 87 concerning the freedom of 
association and protection of the right to organize. 
- 6 -
3. The law of the Member State of registration of the vessel or, if 
explicitly referred to in the agreement, any other Member State, 
shall apply to such collective wage agreements. The courts of the 
Member State concerned shall be competent to hear and determine 
disputes arising out of such agreements. 
Article 10 - Social Security 
Without prejudice to Article 13(2) (c) of Council Regulation (EEC) No 1408/71 and 
unless otherwise mutually agreed at the level of governments or social 
partners, social security for seafarers on board vessels registered in 
EUROS shall be the responsibility of the country in which the seafarer 
is resident unless the legislation of that country expressly provides 
otherwise, in which case the Member State of registration shall be 
responsible but in accordance with the legislation of the country of 
residence. 
For the purpose of this provision residence means residence on shore 
and employment on board a vessel registered in a Member State shall not 
of itself, be considered as being residence in that State. 
Article 11 
Articles 8, 9 and 10 shall apply subject to any right conferred or 
obligations imposed by any other Community legislative act except where 
such act expressly provides otherwise. 
SECTION 4: Facilities attached to registration in EUROS 
Art icle 12 - Transfer of vessels 
Any vessel registered in EUROS and having valid certificates and 
classification and meeting the essential technical requirements to be 
laid down by the Council according to the provisions of the Treaty 
before 1 July 1991, may be transferred to the register of another 
Member State without the imposition of additional technical 
requirements. 
Article 13 - Recognition of seafarers' qualifications 
The qualifications and licences of seafarers who are nationals of a 
Member State shall be recognised by the competent authorities of each 
Member State for the purposes of employment on any vessel registered in 
EUROS, subject to minimum requirements for professional training and 
experience in the function concerned as required in Directives adopted 
or to be adopted by the Council, according to the provisions of the 
Treaty, before 1 July 1991. 
SECTION 5: European flag, port of registration 
Art icle 14 - European flag 
1. Vessels registered in EUROS are entitled and obliged to fly the 
European flag in addition to their national flag. 
10J No L 149, 5.7.1971, p. 2. 
- 7 -
2. Upon registration a certificate conveying the right to fly the 
European flag will be delivered by the Commission to the applicant 
for registration. 
Article 15 - Port of registration 
A vessel registered in EUROS shall bear a relevant identification on 
its stern under the name of the port of registry in its national . 
register. 
SECTION 6: Final provisions 
Article 16 - Implementing measures 
The Commission shall, within six months after the adoption of this 
regulation, adopt the necessary implementing measures concerning the 
establishment of EUROS, the procedures for registration and 
deregistration, the form and content of the documents concerned, 
including the certificate concerning the right to fly the European 
Flag, the form of, and rules governing the flying of, the flag, and the 
identification of vessels on the register. 
Article 17 - Cooperation 
1. National authorities and the Commission shall assist each other in 
applying this Regulation and in checking compliance therewith. 
2. Within the framework of this mutual assistance they shall 
communicate to each other the necessary information with respect to 
registration and deregistration. 
Article 18 - Transitional period 
1. Member States shall, within six months after the adoption of this 
Regulation and after consultation with the Commission, take the 
necessary measures to: 
organise effective controls to ensure compliance with the 
requirements laid down in Sections 2, 3 and 5; 
- impose sanctions in case of non-compliance with those 
requirements; 
enable vessels registered in EUROS to exercise the right to fly 
the European flag. 
2. Such measures shall make express reference to this Regulation. 
3. Member States shall forthwith communicate to the Commission the 
measures adopted. 
- 8 -
Article 19 - Entry into force 
This Regulation shall enter into force on 1 January 1991. 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, 1989. 
For the CounciI 
The President 
ANNEX 2 
COMMISSION R ECOMMENDATION 
on improving the effectiveness of Port State Control 
in the Community 
THE COMMISSION OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, 
Whereas the safety of life at sea, acceptable standards of living and 
working conditions on board ships and the protection of the marine 
environment must be maintained and promoted; 
Whereas the principal responsibility for the effective application of 
these standards as laid down in international instruments rests upon 
the relevant authorities of the State whose flag a ship is entitled to 
fly; 
Whereas effective action in the form of Port State Control is, 
nevertheless, necessary to ensure proper application of these standards 
in order to reduce and prevent substandard shipping; 
Whereas all the maritime nations of the European Economic Community are 
signatories of the Memorandum of Understanding on Port State Control; 
Whereas it is essential that all international conventions under the 
Memorandum of Understanding are duly signed and ratified by all Member 
States; 
Whereas correct application of the international conventions referred 
to in the Memorandum of Understanding on Port State Control requires 
uniform and effective checking by Member States who are signatories to 
the aforesaid Memorandum; 
Whereas it is necessary to ensure that the target number of inspections 
on individual foreign merchant ships visiting the ports of signatories 
to the Memorandum Is achieved in order to reduce and prevent 
substandard shipping and in order to avoid distortions of conditions of 
competition between ports within the Community; 
Whereas for these purposes a full and uniform system of Port State 
Control should be in force throughout the Community; 
- 2 -
HEREBY RECOMMENDS THE MEMBER STATES to take the following measures in 
pursuance of their obligations under the Memorandum of Understanding on 
Port State Control (M.O.U.): 
I. WITH REGARD TO RATIFICATION OF THE INTERNATIONAL CONVENTIONS 
COVERED BY THE MEMORANDUM OF UNDERSTANDING 
1. those Member States, which have not yet ratified the 
International Conventions cited below, to do so forthwith: 
the International Convention on Load Lines, 1966; 
the International Convention for the Safety of Life at Sea, 
1974, as amended by the Protocol of 1978; 
the International Convention for the Prevention of 
Pollution from Ships, 1973, as modified by the Protocol of 
1978; 
the International Convention on Standards of Training, 
Certification and Watchkeeping for Seafarers, 1978; 
the Convention on the International Regulations for 
Preventing Collisions at Sea, 1972; 
the Merchant Shipping (Minimum Standards) Convention, 1976 
(ILO Convention no. 147). 
2. those Member States, which have not yet ratified the optional 
annexes to the International Convention for the Prevention of 
Pollution from Ships, 1973, as amended by the Protocol of 1978 
(MARPOL 73/78), to do so forthwith. 
II. WITH REGARD TO THE IMPLEMENTATION OF THE INTERNATIONAL CONVENTIONS 
COVERED BY THE MEMORANDUM OF UNDERSTANDING 
Member States, which are signatories to the Memorandum of 
Understanding, to ensure that 
1. a minimum annual total of 25% of the number of individual 
foreign merchant ships visiting their ports are inspected in 
accordance with the provisions of the Memorandum of 
Understanding; 
2. the inspection procedures laid down in the Manual for Surveyors 
adopted by the Port State Control Committee are strictly 
applled; 
3. adequate resources, both financial and manpower, are provided 
to ensure a full implementation of their obligations under the 
Memorandum of Understanding on Port State Control. 
The Commission requests Member States to inform It within twelve months 
of the adoption of the Recommendation of the measures they have taken 
in this field. 
ANNEX 3 
Proposal for a 
COUNCIL REGULATION 
on a common definition of a Community shipowner 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 84 (2) thereof, 
Having regard to the proposal of the Commission, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas the development of the single market makes it desirable to 
affirm the identity of the Community also in the field of sea transport 
services; 
Whereas to an increasing degree Community legislation refers to 
Community shipowners and there should be a common view on the identity 
of such a shipowner; 
Whereas it is desirable to distinguish between companies owned by 
nationals of a third country or the majority of whose board consists of 
nationals of such a country and those which are owned or managed by 
Community nationals, taking into account that the former may themselves 
have acquired the same status as companies of the Member States by 
their establishment in a Member State; 
Whereas such a distinction can be achieved by defining as Community 
shipowners those nationals of a Member State who have a significant 
economic link with a Member State; 
HAS ADOPTED THIS REGULATION: 
- 2 -
Article 1 
This Regulation lays down criteria establishing a common definition of 
a Community shipowner. 
Article 2 
Unless otherwise stated, all references to "Community shipowner", in 
regulations, directives and decisions of the Council are to be 
interpreted in accordance with Articles 3 and 4. 
Article 3 
For the purpose of this Regulation "a shipowner" means: 
a natural or legal person providing a liner or tramp service in the 
field of maritime transport of passengers or goods by one or more sea­
going vessels which he or it owns or has chartered on the basis of a 
bare-boat charter, time charter or voyage charter. 
Article 4 
The following shipowners are regarded as Community shipowners 
1a a national of a Member State, who has his domicile or usual 
residence in a Member State; 
1b a shipping company or firm which is formed in accordance with 
the law of a Member State and which complies with the 
following requirements: 
i) the principal place of business is situated and the 
effective control exercised in a Member State and 
ii) the executive board consists of persons the majority of 
whom are nationals of a Member State or the majority of the 
shares are owned by nationals of a Member State having 
their domicile or usual residence in a Member State. 
2a a national of a Member State who has his domicile or usual 
residence outside the Community if his vessels are registered 
in that Member State in accordance with its legislation; 
2b a shipping company or firm established outside the Community 
and controlled by nationals of a Member State if its vessels 
are registered in that Member State in accordance with its 
legislation. 
- .3 -
Article 5 
This Regulation shall enter into force on 1 January 1990, 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels 1989 
For the CounciI 
The President 
ANNEX 4 
Proposal for a 
COUNCIL REGULATION 
applying the principle of freedom to provide services to maritime 
transport within Member States 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 84 (2) thereof, 
Having regard to the proposal of the Commission, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas the principle of freedom to provide services does not yet apply 
to maritime transport within the Member States; 
Whereas it is important to adopt measures with the aim of progressively 
establishing the internal market over a period expiring on 31 December 
1992; whereas the internal market shall comprise an area without 
internal frontiers in which the free movement of goods, persons, 
services and capital is ensured; 
i 
Whereas in accordance with Article 61 of the Treaty freedom to provide 
services in the field of maritime transport is to be governed by the 
provisions of the Title relating to transport; 
Whereas the abolition of restrictions on the provision of maritime transport 
services within Member States is necessary for the establishment of the 
single market; 
Whereas therefore the principle of freedom to provide services should 
be applied to maritime transport within Member States; 
Whereas this freedom should be subject to conditions in respect of the 
vessels used to provide the services,so as to ensure a degree of 
approximation of operating conditions among the persons and companies 
providing such services; 
Whereas such conditions are fulfilled by ships registered in the 
Community ship register established by Council Regulation (EEC) No ... 
and used in short-sea trades; 
HAS ADOPTED THIS REGULATION: 
- 2 -
Article 1 
1. Restrictions on freedom to provide maritime transport services 
within Member States shall be abolished in respect of Community 
shipowners who are established in a Member State of the Community 
other than that of the person for whom the services are intended 
when using vessels registered in the Community ship register and 
not exceeding 6000 grt. 
2. The provisions of this Regulation shall also apply to nationals of 
the Member States established outside the Community and to shipping 
companies established outside the Community and controlled by 
nationals of a Member State, if their vessels are registered in 
that Member State in accordance with its legislation and in the 
Community ship register and not exceeding 6000 grt. 
3. For the purposes of this Regulation, services shall be considered 
as "maritime transport services" where they are normally provided 
for remuneration and shall in particular include: 
(a) the carriage of passengers or goods by sea between ports in any 
one Member State, including overseas departments of that State 
(cabotage); 
(b) the carriage of passengers or goods by sea between any port in 
a Member State and installations or structures on the 
continental shelf of that Member State (off-shore supply 
services). 
4. The Member State between whose ports the maritime transport 
services are provided may require that the vessels used for these 
services are manned with nationals of the Member States to the same 
degree as is required in respect of the vessels flying its own flag 
which are used for these services. 
Article 2 
1. Notwithstanding Article 1(1) and (2), a Member State may, 
where necessary in order to maintain sufficient maritime transport 
services in the case of cabotage between the mainland and its 
islands and between its islands,impose public service obligations 
as a condition for the right to provide the service. 
2. For the purpose of this Regulation the law, regulations or 
administrative conditions imposed by Member States aiming to 
guarantee the continuity, regularity and efficiency of the 
services, and the provision of goods of fundamental importance for 
the economic we 11 being of such territories shall be considered as 
public service obligations. 
- 3 -
Article 3 
Articles 55 to 58 and 62 of the Treaty shall apply to the matters 
covered by this Regulation. 
Article 4 
Without prejudice to the provisions of the Treaty relating to the 
right of establishment, a person providing a maritime transport 
service may, in order to do so, temporarily pursue his activity in 
the Member State where the service is provided, under the same 
conditions as are imposed by that State on its own nationals. 
Article 5 
Member States shall, before adopting laws, regulations or 
administrative provisions in implementation of Article 2 consult 
the Commission. They shall send to the latter any such measures so 
adopted. 
Article 6 
This Regulation shall be reviewed before 1 January 1993. 
Article 7 
This Regulation shall enter into force on 1 January 1991. 
This regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council 
The President 
ANNEX 5 
MANNING COSTS 
The following table presents the results of a calculation of 
the relative importance of manning costs as part of total 
operating costs, provided in "A Social Survey in Maritime 
Transport- (MERC-1987) for a 1500 TEU container vessel. 
Manning costs include basic wages, overtime, leave pay, 
social security contributions, retirement provisions, crew 
rotation, travel and victualling. 
Operating costs consist of manning, repair and maintenance, 
stores, lubrication oil, insurance and overhead. 
Daily manning and operating cost compared (in USD) 
(1500 TEU VESSEL - October 1986) 
Cost Item 
Country 
Belgium 
Denmark 
Prance 
W. Germany 
Greece 
Ireland 
Italy 
Netherlands 
Portugal 
Spain 
UK Crew 
Sise 
22 
21 
23 
21 
21 
NA 
21 
24 
30 
25 
24 Manning 
cost (1) 
3586 
3228 
4030 
3527 
1296 
NA 
4070 
3623 
1352 
2952 
2817 Operating 
cost (2) 
6654 
6414 
7177 
6679 
4034 
NA 
7113 
6715 
4056 
5913 
5741 1/2 
(%) 
54% 
50% 
56% 
53% 
32% 
NA 
57% 
54% 
33% 
50% 
49% 
SOURCE: "A Social survey in Maritime Transport" by MERC -
1987 
- 2 -
Tin» significant differences in manning costs within the 
Community are illustrated in the following graph which 
translates the relevant data of the above table into annual 
manning costs. 
MANNING COSTS 
US % I YEAR 
i.too.ooo 
1.400.000 
1.700 000 
1.000.000 
•00.000 
•00.000 
400 000 
230.000 1.30S 0»O 1.2H.3SS 1.4SS.SS0 
473.040 1.077.4*0 
^ \ 1.02S.20S 
- 3 -
The following table from the "Social Survey" illustrates the 
relative weight of manning costs and other cost components 
in the overall cost, as calculated in 1986 for a newly built 
Dutch 1500 TEU container vessel. 
Manning costs in the overall cost environment 
(Dutch 1500 TEU container vessel, newly built) 
Cost USD % 
Item (mln) 
Manning 1.286 21.1 
R&M 0.424 6.9 
Stores 0.098 1.6 
Lub. Oil 0.108 1.8 
Insurance 0.251 4.1 
Overhead 0.217 3.6 
Fuel 1.196 19.6 
Capital 2.519 41.3 
Total 6.097 100% 
I I 
ANNEX 6 
STATISTICAL ANNEX 
Table 1 Merchant fleet of the world 1970-1988 
Table 2 Development of world seaborne trade 1975-1988 
Graph 1 Cargo carried by world fleet 1965-1988 
Graph 2 Ton-Miles performed by world fleet 1965-1988 
Table 3 Merchant fleets - analysis by Community ship register 
Table 4 Development of EEC national fleets and EEC owned fleets 
under the flag of open register countries between 1981 and 
1987 
Table 5 Distribution of World merchant fleets by category of 
vessels and flag - 1988 
Table 6 
Table 7 Development of world container fleets - 1981 and 1987 
Table 8 Merchant fleets: Age comparison by percentage share of 
total dwt - 1986 
Table 9 Personnel employed In Member States' fleets: by nationality 
(1980. 1986-1968) 
Table 10 Structure of costs for selected vessels 
TABLE 1 : MERCHANT FLEET OF THE WORLD 1970-1988 (1) 
TEARS 
Trnr 
5 
9 
1980 
L en 
WORLD 
MGRT ff nrrr 
325*6 
393.0 
398.8 
399.7 
403.0 
400.0 
396*0 
392.9 
381.4 
379.6 
378.9 & C D 
(io 
MGRT 
TTT7T 
193.8 
208.5 
210.5 
209.4 
205.3 
193.0 
180.4 
169.5 
150.5 
133.7 
128.1 EEC) 
X TTT 59.5 
53.0 
52.8 
52.4 
50.9 
48.3 
45.6 
43.1 
39.5 
35.2 
33.8 (2) 
EEC 
MGRT "TT7 
100.4 
116.6 
117.2 
116.1 
110.6 
101.4 
92.7 
84.5 
74.0 
63.2 
58.5 X 727T 30.8 
29.7 
29.4 
29.0 
27.4 
25.4 
23.4 
21.5 
19.4 
16.6 
15.4 (3) 
OPEN REGISTRT 
COUNTRIES 
MGRT 
-ÏÏÏ7T 
84.2 
107.7 
108.0 
104.8 
106.3 
108.1 
111.3 
114.2 
116.5 
126.9 
132.5 X 
Ttt 25.9 
27.4 
27. 1 
26.2 
26.4 
27.0 
28.1 
29.1 
30.5 
33.4 
35.0 (A) 
COMECON 
MGRT 
T37Ô 
17.7 
22.7 
23.2 
25.5 
23.9 
24.7 
24.9 
25.4 
25.8 
26.2 
26.3 T7T 
5.5 
5.8 
5.8 
6.4 
5.9 
6.2 
6.3 
6.5 
6.7 
6.9 
6.9 out of which: 
OTHERS 
MGRT 
T77J 
29.9 
54.1 
57.1 
60.0 
67.5 
74.2 
79.4 
83.8 
88.6 
92.8 
92.0 X -rrr 
9.2 
13.8 
14.3 
15.0 
16.7 
18.6 
20.0 
21.3 
23.2 
24.5 
24.3 WIC» <5) 
MGRT 
7.0 
14.8 
15 .2 
15.9 
17.8 
20.0 
22.3 
24.1 
25.1 
26.1 
25.8 2.1 
3.8 
3.8 
4.0 
4.4 
5.0 
5.6 
6.1 
6.6 
6.9 
6.8 China(PR), Israel 
South Africa 
MGRT I X 
3.6 
7.2 
7.6 
8.5 
9.0 
9.7 
10.1 
11.2 
12.1 
12.8 
13.3 1.1 
1.8 
1.9 
2. 1 
2.2 
2.4 
2.6 
2.9 
3.2 
3.4 
3.5 
SOURCE: EUR08TAT Statistical Yearbook - Transport» Communications, Tourism and Lloyds Statistical Tables 
• MGRTI million gross registered tons - all ships of 100 GRT and over 
• X s percentage of world total 
(1) Merchant fleets excluding the fishing fleet, tugs, dredgers. Icebreakers, research ships, supply ships 
and tenders, miscellaneous 
(2) Figures 1er EEC are for the "12". UK, DK, IRL joined EEC in 1973, GR in 1981, E and P in 1986, but the tonna 
figurée have jbeen included from 1970 onvarde for statistical reasons 
(3) Antigua» lésâmes, Bermuda, Cayman Isles, Cyprus, Gibraltar, Lebanon, Liberia, Malta, Panama, St. Vincent, 
Vanuatu. (Figures for the years to 1983 provided in COM(85)90 are not directly comparable as a result of 
reclassification of a number of countries) 
(4) Socialist countries of Eastern Europe: Albania, Bulgaria, Czechoslovakia, DRG, Hungary, Poland, Romania, 
USSR. 
(5) Newly Industrialised Countries of the Far East: Rep. of China, Hong Kong, Singapore and South Korea. 
TABLE 2 : WORLD SEABORNE TRADE. 1977-1988 
TOTAL TRAOE 
ESTIMATE 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
1984 
1985 
1986 
1987 
1988 (estimate) 399 
466 
714 
606 
461 
199 
090 
292 
293 
385 
4S7 
666 CRUDE OIL 
1 451 
1 432 
1 497 
1 320 
1 170 
993 
930 
930 
871 
958 
970 
1 050 OIL PRODUCTS 
273 
270 
279 
276 
267 
285 
282 
297 
288 
305 
309 
315 IRON ORE 
276 
278 
327 
314 
303 
273 
257 
306 
321 
311 
309 
345 COAL 
132 
127 
159 
188 
210 
208 
197 
232 
272 
276 
283 
298 GRAIN 
147 
169 
182 
198 
206 
200 
199 
207 
181 
165 
186 
188 in million tonnas 
OTHERS 
ESTIMATE 
1 120 
1 190 
1 270 
1 310 
1 305 
1 240 
1 225 
1 320 
1 360 
1 370 
1 390 
1 470 
in thousand million tonne-miles 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
1984 
1985 
1986 
1987 
1988 (estimate) TOTAL TRAOE 
ESTIMATE 
17 453 
16 934 
17 513 
16 611 
15 662 
13 499 
12 580 
13 426 
13 065 
13 856 
14 273 
15 170 CRUDE OIL 
10 
9 
9 
8 
7 
5 
4 
4 
4 
4 
4 
5 408 
561 
452 
219 
193 
212 
478 
506 
007 
640 
671 
080 OIL PRODUCTS 
995 
985 
1 045 
1 020 
1 000 
1 070 
1 080 
1 140 
1 150 
1 265 
1 320 
1 350 IRON ORE 
1 386 
1 384 
1 599 
1 613 
1 508 
1 443 
1 320 
1 631 
1 675 
1 671 
1 728 
1 870 COAL 
643 
604 
786 
952 
1 120 
1 094 
1 057 
1 270 
1 479 
1 586 
1 653 
1 740 GRAIN 
801 
945 
1 026 
1 087 
1 131 
1 120 
1 135 
1 157 
1 004 
914 
1 061 
1 070 OTHERS 
ESTIMATE 
220 
455 
605 
720 
710 
560 
510 
720 
750 
780 
840 
060 
NOTE: Atttntion is drawn to the figures for grain which include sorghum and soya beans (in addition to wheat, maize, barley, oats and rye) for the 
entire period. 
SOURCE: Fearnleys. Oslo. Review 1988 
GRAPH 1 : 
Cargo carried by world fleet 1965-1988 
GRAPH 2 : 
Ton-miles performed by world fleet 1965-1988 
Bill.ton-eiles 
18 T 
D Crude 
oil B Other 
cargo G Grain QCoal Q Iron ore Oil 
products 
Source: JSL Sreaen. oasetf on data fora Fearnleys Review 
TABLE 3 l MERCHAR FLEETS (1) - ANALYSIS BY COHHIMITT SHIP REGISTERS (2) 
Source t Lloyd's Register of Shipping, Statistical Tables 
(I) t Itorchant fleet excluding fl.hlng vessel., tug., dredger.. Ice-breaker.. re.e«rch ve..el.. 
...nnl« ahln. tender, and atecellaneous• Vessel. 100 CRT and over. 
(J) . E«.Yl£re. inclua. various -second" register, e.g. the Lie of M.n and Kerguelen I.laod. FLAC 
B. 
DK 
ft 
FRC. 
C*V 
IlLe 
It. 
10*. 
PORT. 
SP. 
UK. 
BEG 11 1975 
M* of 
ships 
99 
950 
562 
1578 
2561 
51 
1222 
802 
169 
804 
2246 
11044 MGRT 
1.3 
4.3 
10.4 
8.2 
22.4 
0.2 
9.9 
5.4 
1.1 
4.8 
32.2 
100*2 1980 
B# of 
ships 
105 
746 
465 
1492 
3634 
63 
1154 
690 
121 
817 
1931 
11218 HGRT 
1.7 
5.2 
11.6 
8.0 
39.4 
0.2 
10.9 
5.3 
1.2 
7.5 
26.1 
117.1 1984 
M* of 
ships 
125 
643 
405 
1424 
2673 
69 
978 
635 
109 
765 
1216 
9042 MGRT 
2.3 
5.1 
8.6 
6.0 
34.9 
0.2 
9.0 
4.0 
1.4 
6.4 
14.9 
92.8 1985 
N* of 
ships 
124 
607 
381 
1447 
2353 
67 
956 
630 
112 
740 
1135 
8552 MGRT 
2.3 
4.8 
7.9 
5.9 
30.9 
0.2 
8.6 
3.7 
1.3 
5.6 
13.3 
84.5 1986 
N* of 
ships 
117 
575 
415 
1410 
1995 
69 
947 
644 
100 
674 
1026 
7972 MGRT 
2.3 
4.5 
5.6 
5.3 
28.3 
0.1 
7.6 
3.8 
1.0 
4.9 
10.6 
74.0 1987 
N* of 
ships 
112 
588 
315 
1099 
1679 
64 
943 
620 
77 
609 
916 
7022 MGRT 
2.1 
4.6 
4.1 
4.1 
23.4 
0.1 
7.6 
3.4 
0.9 
4.4 
7.5 
63.2 1988 
N* of 
ships 
103 
549 
291 
923 
1584 
66 
930 
565 
76 
554 
871 
6512 MGRT 
1.9 
4.2 
4.2 
3.7 
21.8 
0.1 
7.4 
3.2 
0.9 
3.8 
7.2 
58.5 
TABLE 4 
DEVELOPMENT OF EEC NATIONAL FLAG FLEETS AMD EEC OWNED FLEETS UNDER THE FLAG OF OPEN REGISTRY COUNTRIES BETWEEN 
1981 AND 1987 (Vessels of 500 t.DWT and over) 
M.S. 
B. 
DK 
FRG 
FR 
GR 
IRL 
IT 
NL 
PORT 
SP 
UK 
EEC 
WORLD NATIONAL FUG 
National Flag - 1000 DWT 
TANKERS 
1981 
500 
4851 
5146 
14684 
26976 
23 
8221 
4410 
1449 
9303 
22848 
98414 
335464 1987 
382 
4554 
569 
4844 
18540 
27 
4765 
1278 
1005 
4352 
5083 
45399 
245492 BULK 
CARRIERS 
1981 
1581 
883 
2671 
2695 
31122 
239 
6778 
963 
193 
2168 
11036 
60329 
199452 1987 
2508 
456 
618 
1493 
19287 
-
4954 
551 
477 
1958 
2675 
34997 
231802 OTHERS 
1981 
867 
2244 
4592 
2730 
15425 
76 
-
3226 
539 
1630 
7388 
41141 
162272 1987 
764 
1951 
4472 
2070 
4949 
! 136 
2459 
3294 
221 
2077 
3918 
26311 
163470 TOTAL 
1981 
2948 
7978 
12409 
20112 
73513 
... T..., , 
1 342 
17429 
8599 
2181 
13101 
41272 
199884 1987 
3654 
6961 
5659 
8407 
42776 
163 
12178 
5123 
1703 
8387 
11676 
106687 
6971881640764 OPEN REGISTRY FLEET 
Beneficial ownership - 1000 DWT 
TANKERS 
1981 
-
8 
2398 
884 
14845 1987 
-
81 
2150 
1231 
19245 
' * 
987 
1529 
33 
0 
1906 
22590 
111510 192 
623 
32 
6 
2731 
26292 
93787 BULK 
CARRIERS 
1981 
19 
593 
1518 
219 
4875 
-
917 
51 
54 
76 
451 
8773 
56558 1987 
101 
285 
2655 
88 
19614 
-
166 
513 
89 
143 
1723 
25375 
77782 OTHERS 
1981 
26 
123 
1858 
147 
2866 
J 
10 
291 
902 
20 
90 
786 
7122 
29629 1987 
123 
504 
2535 
450 
6296 
28 
345 
869 
90 
113 
1222 
12577 
44973 TOTAL 
1981 
45 
724 
5774 
1258 
22586 
10 
2195 
2483 
107 
166 
3140 
38485 1987 
224 
870 
7340 
1768 
45155 
28 
703 
2004 
211 
262 
5676 
64244 
197697 216382 
Sources: OECD and UNCTAD 
TABLE !> : DISTRIBUTION OF WORLD MERCHANT FLEETS BY CATEGORY OF VESSEL AND FLAG - 1988 (1) 
Oil & oil/chemical & 
miscellaneous tankers 
Chemical tankers 
Liquified gas carriers 
TOTAL TANKERS 
Ore/Bulk/oil carriers 
Ore & bulk carriers 
TOTAL BULK CARRIERS 
General cargo 
Containers (Fully Cellular) 
Passenger, ferries, vehicle 
carriers & other merchant 
vessels 
TOTAL GENERAL CARGO AND 
OTHER MERCHANT VESSELS 
TOTAL ALL SHIPS WORLD 
MGRT 
127.9 
3.5 
9.8 
141.2 
20.0 
109.6 
129.6 
71.9 
22.1 
14.2 
108.2 
378.9 of 
OECD 
MGRT Z 
45.5 35.6 
1.4 39.5 
4.9 50.5 
51.8 36.7 
5.2 26.0 
31.9 29.1 
37.1 28.6 
19.8 27.6 
11.4 51.5 
7.9 55.9 
39.1 36.1 
128.1 33.8 which : 
EEC 
MGRT Z 
21.3 16.6 
0.5 14.2 
1.0 10.2 
22.8 16.1 
2.8 14.0 
15.1 13.7 
17.9 13.8 
8.6 11.9 
5.9 26.7 
3.2 22.5 
17.7 16.3 
58.5 15.4 (2) 
OR 
MGRT Z 
55.4 43.3 
1.4 39.2 
2.5 25.4 
59.3 42.0 
10.0 49.8 
37.6 34.3 
47.6 36.7 
17.8 24.8 
4.3 19.6 
3.6 25.4 
25.7 23.8 
132.5 35.0 (3) 
COMECON 
MGRT Z 
5.5 4.3 
0.0 0.6 
0.2 2.0 
5.7 4.0 
0.9 4.4 
7.2 6.6 
8.1 6.3 
11.3 15.7 
0.9 4.0 
0.8 5.6 
13.0 12.0 
26.7 7.0 OTHERS 
MGRT Z 
21.5 16.8 
0.7 20.0 
2.2 22.4 
24.4 17.2 
3.9 19.5 
32.9 30.0 
36.8 28.3 
23.0 31.9 
5.5 24.8 
1.9 13.4 
30.4 28.0 
91.6 24.2 
Source; Lloyd's Register of shipping - Statistical Tables 1988 
• MGRT: million gross registered tons - all ships of 100 GRT and over 
• Z : percentage of world total 
(1) Merchant fleet: excluding the fishing fleet, tugs, dredgers, icebreakers, research ships, supply ships 
and tenders, miscellaneous 
(2) Open registry countries: Antigua, Bahamas, Bermuda, Cayman Isles, Cyprus, Gibraltar, Lebanon, Liberia, 
Malta, Panama, St Vincent, Vanuatu 
(3) Socialist countries of Eastern Europe: Albania, Bulgaria, Czechoslovakia, DRG, Hungary, Poland, 
Romania,USSR. 
UCKLD MERCHANT KLE£f; 
GROUP OF FLAGS: EEC 
FLAG 
& 
YEAR Ship, of 1ÛO gross tonnage and upward 
by principal type* 
In 1000 gross tonnage 
BELCTLM 1970 
75 
80 
85 
86 
87 
88 
DENMARK 1970 
75 
80 
85 
86 
87 
88 
FRAfCE 1970 
75 
80 
85 
86 
87 
88 
GERMANT 1970 
75 
80 
85 
86 
87 
88 
GREECE 1970 
75 
80 
85 
86 
87 
88 
IRELAND 1970 
75 
80 
85 
86 
87 
88 
ITALY 1970 
75 
80 
85 
86 
87 
88 
NEDERL 1970 
75 
80 
85 
86 
87 
88 
PORTUGAL 1970 
75 
80 
85 
SBUN 
UK 88 
1970 
75 
80 
83 
86 
87 
86 
1970 
75 
80 
85 
86 
87 GRAND 
TOTAL on. 
ITANKERS 
1 
(B+L2) 
974 
L29S 
1696 
2251 
2253 
2097 
1928 
3012 
4332 
5210 
4766 
4464 
4612 
4229 
5907 
10390 
11557 
7886 
5633 
5063 
4204 
7519 
8230 
8007 
5925 
5339 
4112 
3726 
10638 
22449 
39376 
30895 
28256 
23403 
21815 
152 
198 
183 
167 
121 
123 
129 
7023 
9928 
10861 
8588 
7631 
7516 
7395 
4989 
5414 
5341 
3650 
3195 
721 
1054 
1208 
1291 m 
855 
2864 
4846 
7495 
5688 
4862 
4364 
3778 
24690 
32162 
26103 
13362 
10596 
7516 
7235 fonyaeacAL 
TANKERS 
305 
367 
294 
108 
115 
117 
118 
1340 
2161 
2807 
2048 
1830 
1740 
1576 
3477 
6938 
7777 
4332 
2589 
2451 
1934 
1643 
2725 
2757 
1241 
593 
155 
105 
3872 
8295 
11780 
9276 
10235 
9125 
8380 
3 
6 
7 
5 
4 
4 
3 
2721 
4061 
4685 
3579 
2513 
2732 
2587 
1985 
2637 
2509 
553 
667 
499 
369 
248 
516 
775 
860 m 
486 
1423 
2556 
• 4818 
2874 
2350 
2083 
1601 
12032 
16096 
13230 
5790 
4303 
2732 
2764 CHMCAL 
[TANKERS 
3(*) 
124 
151 
107 
134 
ISO 
214 
427 
478 
14 
14 
23 
25 
: 
152 
157 
161 
161 
90 
24 
143 
134 
4 
4 
15 
19 
» 
I 
: 
22 
48 
93 
99 
: 
: 
i 
192 
264 
277 
248 
: 
t 
: 
: 
: 
t 
32 
21 
32 
26 
t 
t 
147 
92 
92 
71 JLIÇLEFIED 
teAS CARRIERS 
76 
76 
4 
4 
6 
7 
5 
5 
8 
2 
7 
11 
S 
62 
50 
52 
24 
24 
14 
10 
9 
18 
76 
72 
46 
40 
1 
8 
3 
3 
3 
S 
1 
3 
40 
25 
70 
94 
111 
110 
120 
18 
13 
20 
43 
74 
66 
58 
5 
6 
6 
I 
6 
2 
2 
35 
92 
91 
96 
90 
55 
170 
165 
140 
133 
130 
120 78 
140 
15S 
157 
150 
17 
30 
50 
142 
144 
98 
94 
86 
241 
322 
271 
258 
227 
184 
6 
23 
30 
197 
216 
141 
125 
8 
17 
33 
66 
63 
63 
62 
116 
148 
204 
175 
187 
192 
187 
23 
58 
64 
61 
62 
43 
28 
4 
4 
4 
2 
i 
67 
52 
56 
69 
69 
69 
74 
97 
703 
1052 
717 
708 
144 
1*4 BULMHL 
CARRIERS |0RE* BIX 
CARRIERS 
203 
208 
295 
293 
251 
77 
638 
609 
388 
132 
132 
54 
123 
42 
90 
90 
90 
163 
152 
1215 
2741 
2149 
1423 
1016 
983 
492 
1554 
1612 
905 
932 
980 
1017 
45 
261 
256 
128 
117 
117 
117 
365 
2918 
2349 
870 
514 
312 
242 318 
547 
767 
1157 
1207 
1055 
872 
445 
552 
639 
423 
290 
2523 
163 
655 
768 
931 
1012 
826 
726 
698 
1441 
2078 
1638 
678 
469 
312 
176 
2032 
5957 
13614 
13173 
11779 
9540 
9077 
82 
148 
101 
57 
1597 
2006 
2302 
2136 
2127 
18L3 
1543 
437 
SOB 
654 
699 
524 
318 
295 
11 
73 
73 
158 m 
267 
270 
792 
993 
1193 
toss 
943 
988 
3485 
318» 
3872 
2144 
1636 
1181 
1043 TOTAL 
TANKERS 4 
BILK 
8 
(2 to 7) 
623 
914 
1215 
1813 
1843 
1735 
1573 
1809 
2748 
3501 
2771 
2480 
725 
2322 
4300 
8647 
9689 
6069 
3843 
3583 
2855 
3154 
4958 
4485 
2434 
1597 
905 
775 
6064 
15485 
28176 
24759 
23527 
19890 
18641 
85 
155 
111 
66 
8 
19 
22 
4966 
7794 
8873 
6911 
3918 
3754 
5553 
2508 
3216 
3241 
1348 
1591 
1203 
998 
263 
S98 
858 
1026 m 
759 
1762 
3663 
6158 
4388 
3706 
3339 
2896 
16034 
23076 
20668 
9808 
7386 
4592 
4384 GENERAL 
CARGO SHIPS 
351 
302 
323 
162 
139 
134 
106 
1187 
1169 
973 
754 
680 
1044 
566 
1397 
1392 
1279 
960 
880 
668 
617 
4099 
2485 
2121 
1759 
1798 
1300 
1100 
4451 
6321 
10433 
3416 
3974 
2755 
2287 
66 
16 
42 
40 
52 
52 
59 
1471 
1144 
1056 
814 
889 
960 
975 
2358 
1868 
1584 
1356 
1486 
1425 
1380 
373 
392 
329 
238 
HI 58 
1054 
977 
1141 
1002 
886 
781 
659 
7324 
4886 
3030 
1339 
1123 
864 
614 CONTAINER 
sarps 
10 
31 
HI 
227 
228 
176 
200 
16 
179 
492 
986 
1030 
320 
1007 
27 
139 
410 
673 
706 
634 
360 
162 
638 
1227 
1551 
1757 
1713 
1652 
35 
38 
103 
142 
169 
201 
1 
7 
5 
18 
18 
18 
IS 
97 
208 
269 
247 
252 
251 
9 
154 
380 
574 
$47 
327 
579 
6 
6 
9 
? 7 
9 
32 
39 
139 
117 
104 
91 
377 
1347 
1672 
1322 
1419 
1354 
1335 PASSENGER 
PERRIES & 
OTHER 
U(**) 
49 
47 
49 
43 
51 
47 
236 
244 
255 
274 
2069 
334 
163 
212 
179 
184 
202 
178 
172 
104 
149 
174 
181 
187 
195 
199 
123 
606 
729 
617 
613 
588 
687 
20 
30 
43 
43 
33 
33 
586 
893 
724 
394 
377 
394 
616 
114 
176 
136 
172 
196 
232 
236 
85 
SB 
IS 
18 
31 
39 
174 
137 
159 
133 
141 
132 
733 
653 
733 
693 
705 
702 TOTAL 
GENERAL CARGO 
& PASSENGER 
12 
(9 to 11) 
351 
382 
481 
438 
410 
362 
355 
1203 
1584 
1709 
1995 
1964 
1907 
1607 
1743 
1868 
1817 
1790 
1479 
1349 
4365 
3272 
3522 
3491 
3742 
3307 
2951 
4574 
6964 
11200 
6136 
4729 
35L2 
3175 
67 
43 
77 
101 
113 
104 
107 
2057 
2134 
1938 
1677 
1713 
1806 
1842 
2481 
2193 
2100 
2102 
2229 
2184 
2197 
458 
456 
350 
265 
« 96 
1102 
1183 
1337 
1300 
1156 
1025 
882 
8656 
7086 
5435 
3554 
3210 
2924 
2851 
(*) includes Miscellaneous tankers 
(**) Includes pamisjir/cargo ships; vehicle carriers, ferries and vessels; and ltwettodr carriers 
TABLE 7 
Percentage shares in the world's container fleet 
ID 1981 and 1987 
1981 1987 
OECD 71.2 55.3 
Open registry 7.5 17.5 
Eastern Bloc 2.8 3.8 
Market economy 
developing countries 14.6 18.1 
•Others (PRC, Taiwan, 
Bermuda, Gibraltar, 
Israel, South 
Africa) 3.9 5.3 
Development of the container fleets of Hong Kong and 
Taiwan 
1981 
No. 1987 
GRT No. GRT 
HONG KONG 
- own flag 
- open registry 
TAIWAN 
- own flag 
- open registry 21 
13 380.000 
296.000 21 
51 
57 
39 437.000 
1.000.000 
1.405.000 
1.115.000 
SzWaCBeNtYUESS : ÉŒ 0QARI9QN BY PEKZNEœ SH&W CF 10m WT -1986 
"" (Ships of 300 grt/gt and over) 
OBCD 
EEC 
Denmark 
Irenes 
GensnyfR 
Greece 
Italy 
S)psin 
OK 
OMSXN 
Developing countries 
Open registry 0-4 YEARS 
17.3 
14.0 
23.9 
11.2 
38.3 
11.3 
4.8 
8.2 
6.2 
13.0 
18.0 
14.1 5-9 YEARS 
23.1 
20.2 
20.8 
15.7 
33.2 
15.3 
12.5 
25.5 
27.6 
24.6 
20.9 
16.1 10-14 YEARS 
38.0 
43.1 
48.4 
67.7 
14.4 
43.0 
46.7 
50.0 
47.3 
25.4 
35.2 
47.4 15-19 YEARS 
13.7 
15.3 
5.0 
4.0 
11.2 
21.3 
19.9 
13.3 
11.3 
15.4 
17.3 
17.4 20-24 YEARS 
3.6 
. 4.3 
1.5 
1.1 
2.1 
5.3 
7.0 
1.6 
6.1 
15.6 
5.1 
3.6 25 and above 
4.3 
3.0 
5.0 
0.3 
0.8 
3.8 
9.1 
1.5 
1.6 
6.0 
3.6 
1.4 
SOUVZ: ISL Bremen and Ilojds Register of Shipping 
TABLE 9; PERSONNEL EMPLOYED IN M.S. FLEETS : BT NATIONALITY (1980, 1986» 1988) 
Member 
State 
B. 
DK 
FR 
GER. 
GR. 
IRL. 
IT. 
NL. 
PORT. 
SP. 
UK. OWN 
NATIONALS 
1980 
2526 
11975 
14947+ 
20894 
52518 
1990 
54700** 
6139 
5856+ 
22928 
58650* 1986 
2332 
8846 
6695 
16301 
28791** 
794 
29753 
10071 
2913+ 
19873 
28980+ 1987 
2162 
8028 
6038 
13284 
.. 
861 
25959 
8099 
2201 
14701 
24808 1988 
2016 
7214 
.. 
11816 
.. 
. • 
25237 
7098 
1790 
12977 
.. OTHER 
OECD 
1980 
636 
670 
4 + 
3750 
1074 (1) 
10 
-
1863 
-
-
13411+* 1986 
474 
305 
2 
4169 * 
3143*** 
249 
-
4147 * 
-
-
5211+* 1987 
457 
243 
1 
3389* 
• • 
105 
-
3063* 
-
-
5434* 1988 
428 
277 
.. 
3261* 
.. 
.. 
-
2582* 
-
-
.. OTHER 
1980 
142 
2037 
203+ 
2397 
25867 
2 
-
1910 
-
-
13411* 1986 
122 
628 
110 
4169 * 
3143*** 
34 
-
4147 * 
-
-
5211** 1987 
101 
538 
84 
3389* 
.. 
14 
-
3063* 
-
-
5434* 1988 
95 
419 
• • 
3261* 
• • 
• • 
-
2582* 
-
-
.. TOTAL 
1980 
3304 
14682 
15154+ 
27041 
79459 
2002 
54700 
9912 
5856+ 
22928 
72061+ 1986 
2928 
9779 
6807 
20470 
31934*** 
1077 
29753 
14218 
2113 
19873 
30019 1987 
2720 
8809 
6123 
16673 
• • 
980 
25959 
11162 
2201 
14701 
28772 1988 
2539 
7940 
• • 
15077 
• • 
• • 
25237 
9680 
1790 
12977 
• • 
Source : OECD 
* all non-nationals together 
+ previous year's figures 
.. no information available 
(1) Portuguese only 
** estimate (ISL, Shipping statistics yearbook 1988) 
*** As at 20th September 1986 
TABLE 10: STRUCTURE OF COSTS FOR SELECTED VESSELS 
Country Vessel Age 
(Year) Total Costs (Percentages) 
UK 
M 
Norway Container 
•s 
Bulker 
Ireland 
Italy Container 
Bulker 1 
5 
1 
5 
12 Net salary 
7.0 
11.7 
24.2 
27.5 
37.9 
23.8 
41.5 Taxes 
on wages 
2.3 
3.8 
5.1 
5.8 
8.0 
14.4 
13.7 Depreciation 
58.3 
30.9 
37.0 
13.3 
2.5 Interest 
17.6 
20.3 
9.9 
21.7 
4.6 Fuel 
9.6 
16.1 
11.1 
12.6 
17.3 Insurance 
Operational Costs only 
39.8 
20.9 1.4 
2.4 
0.9 
1.0 
1.4 
5.9 
1.7 Repairs/ 
Maintenance 
1.1 
10.1 
3.6 
8.6 
15.3 
4.7 
6.8 Overheads Others 
1.4 
2.4 
3.8 
3.8 
6.0 
5.8 
7.2 1.4 
2.4 
4.4 
5.6 
7.0 
5.8 
8.4 
Source: KPMG Peat Marwick Treuhand Gmbh 


ISSN 0254-1475 
COM (89) 266 final 
DOCUMENTS 
EN 07 
Catalogue number : CB-CO-89-332-EN-C 
ISBN 92-77-52263-1 
Office for Official Publications of the European Communities 
L-2985 Luxembourg