Report from the Commission - Fourth Report on the implementation of Council Regulation 3577/92 applying the principle of freedom to provide services to maritime cabotage (1999-2000)
Date: 2002-04-24
Institutions: European Commission
Subjects: cost analysis, crew, domestic market, freedom to provide services, liberalisation of trade, maritime cabotage, maritime transport, statistics

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 24.4.2002
COM(2002) 203 final

REPORT FROM THE COMMISSION

Fourth report on the implementation of Council Regulation 3577/92 applying the
principle of freedom to provide services to maritime cabotage (1999-2000)

REPORT FROM THE COMMISSION

Fourth report on the implementation of Council Regulation 3577/92 applying the
principle of freedom to provide services to maritime cabotage (1999-2000)

TABLE OF CONTENTS

Summary................................................................................................................................ 4

1.

Legislative developments ......................................................................................... 5

1.1.

Legislative developments in the 15 Member States................................................... 5

1.1.1. Access to the provision of maritime cabotage services.............................................. 5

1.1.1.1. Liberalised services .................................................................................................. 5

1.1.1.2. Services which are still protected.............................................................................. 6

1.1.2. Rules on manning..................................................................................................... 7

1.1.3.

Public service obligations ......................................................................................... 7

1.2.

Legislative developments in the EFTA States ........................................................... 9

2.

Market developments ............................................................................................... 9

2.1.

Traffic developments................................................................................................ 9

2.1.1. Cargo transport......................................................................................................... 9

2.1.1.1. Total traffic .............................................................................................................. 9

2.1.1.2. Categories of freight transported............................................................................. 11

2.1.1.3. Distinction between island and mainland traffic...................................................... 12

2.1.2.

Passenger transport................................................................................................. 12

2.1.2.1. Total traffic ............................................................................................................ 12

2.1.2.2. Cruises ................................................................................................................... 13

2.2.

2.3.

3.

4.

4.1.

4.2.

Respective market shares of the first and second registers....................................... 14

Foreign-flag penetration ......................................................................................... 14

Manning costs ........................................................................................................ 15

Conclusions............................................................................................................ 16

The impact of cabotage liberalisation...................................................................... 16

Appeal for consultation on the content of forthcoming reports on the application of
the cabotage Regulation.......................................................................................... 16

2

ANNEX 1 Rules on manning adopted in accordance with Article 3 of the cabotage Regulation18

ANNEX 2 Public service obligations in the Member States.................................................. 19

ANNEX 3 Overall view of provisions on cabotage in the EU and EFTA countries............... 22

ANNEX 4 Types of freight transported in the Member States .............................................. 30

ANNEX 5 Volumes transported in 1999 by type of freight distinguishing between mainland

and island cabotage (in millions of tonnes) ............................................................. 31

ANNEX 6 Comparison of manning costs for cargo vessels .................................................. 32

ANNEX 7 Comparison of manning costs for passenger vessels............................................ 33

3

SUMMARY

This is the fourth two-yearly report on the application of the cabotage Regulation. It covers
the years 1999 to 2000. Like the previous reports, this report has been based on a study
carried out on behalf of the Commission.

Almost all cabotage services in Europe have been liberalised since 1 January 1999. The Greek
market, which is the last to still be partly protected, will be opening up to Community
shipowners as from 1 November 2002. The adaptations of Member States' legal provisions to
the cabotage Regulation will soon be completed.

The first part of the report describes the state of play regarding legislation. It states which of
the Community second registers may take part in cabotage. Among vessels registered in a
Member State, only those in the Italian second register and passenger vessels in the Danish
second register do not have access at the present time to Community cabotage. In other
words, Italy and Denmark do not authorise those particular vessels to carry out cabotage in
their respective countries. The report also specifies the rules on manning imposed by certain
Member States on vessels carrying out cabotage with islands. Finally, for the first time, an
annex recapitulates the public service obligations laid down by the Member States.

This new phase of liberalisation has not adversely affected the market. Cargo volumes
(260.99 million tonnes in 1999) and the number of passengers (152 million in 1999)
transported have remained relatively stable. The five Member States concerned by this new
phase of liberalisation (Spain, France, Greece, Italy and Portugal) have tackled it by
improving the quality of their fleets. Penetration by foreign vessels into the national cabotage
markets remains limited in the majority of the Member States.

The second part of the report presents detailed statistics by country including, in the case of
cargo, the breakdown according to type of cargo transported depending on whether it was
island or mainland cabotage. The greatest market for cargo traffic is that of the United
Kingdom, followed by that of Italy. Liquid bulk heads the league table in terms of cargo
transported. In the case of passengers, Greece has the greatest traffic, followed by Italy and
the United Kingdom.

Finally, the last part of the report gives manning costs for three types of cargo and three types
of passenger vessel. The most expensive register is the Finnish register. The Portuguese
second register, the MAR register, is the least expensive in Europe.

Given that the liberalisation of the market will soon be completed and in the light of the
difficulties encountered in collecting the statistics needed to draw up this report,
the
Commission speculates in its conclusions on the form which future cabotage reports will have
to take. It considers that forthcoming reports could be drawn up on the basis of answers from
the Member States to a questionnaire addressed to them by the Commission. This would be
the most economical solution because it would avoid having recourse to often costly studies.
It would make it possible to set up a consistent and uniform database on the subject available
to everybody. The Commission is inviting Member States and interested parties to give their
opinion on this question.

4

REPORT

This report has three chapters. The first depicts legislative developments in the fifteen
Member States and the EFTA countries. The second presents market trends in these same
countries. The third recapitulates manning costs in the different registers of the EEA
countries.

1.

Legislative developments

1.1.

Legislative developments in the 15 Member States

1.1.1.

Access to the provision of maritime cabotage services

Since 1 January 1999, almost all maritime cabotage services have been open to the
beneficiaries of Regulation No 3577/92.
the
Regulation, these beneficiaries are: "Community shipowners who have their ships
registered in, and flying the flag of a Member State, provided that these ships comply
with all conditions for carrying out cabotage in that Member State".

In accordance with Article 1 of

This date of 1 January 1999 corresponds to the penultimate stage in the liberalisation
of Community cabotage. It concerned regular passenger transport services and
ferry transport as well as cabotage services with the islands of five Member
States (Spain, France, Greece, Italy and Portugal).

The liberalisation of maritime cabotage will be complete when the following two
categories of island cabotage services will have been liberalised in Greece: regular
passenger transport services and transport by ferry as well as services performed by
ships smaller than 650 gross tonnes.

1.1.1.1. Liberalised services

As far as liberalised services are concerned,
legislation since the last cabotage report.

there have been few changes in

are

Following the adoption of Law 2001-43 of 16 January 2001, French legislation
complied with the Regulation as from that date. On the other hand, infringement
proceedings
still pending with regard to Spanish legislation (Royal
Decree 1466/1997), Portuguese legislation (Decree Law 194/98 of 10 July 1998
amended by Decree Law 331/99 of 20 August 1999) and Greek legislation
(Article 165, paragraphs 1 and 6 of the Greek Shipping Code and the Circulars of
4 August 1998, 18 December 1998 and 21 December 1998).

The Spanish Royal Decree No 1466/97 has been attacked in the Spanish courts,
which in turn brought the matter before the Court of Justice of the European
Communities for a preliminary ruling. The Court delivered its judgment on
20 February 2001 (Case C-205/99).

5

The first registers of Member States all have access to cabotage. In the matter of
the
access to the second registers of Member States to Community cabotage,
situation is identical
to that described in the previous cabotage report and is
reproduced below.1

The Regulation provides that, for a ship of a Member State to be admitted into
cabotage in another Member State, it must first of all fulfil all the conditions required
for admission to cabotage in the Member State in which it finds itself.

This applies to the following ships, which fulfil all the conditions required to
participate fully in cabotage in the Member States of the EU:

– ships registered in the Spanish REC Register;

– ships registered in the Portuguese MAR Register;

– cargo ships registered in the Danish DIS Register.

Ships registered in the German ISR and Finnish vessels entered on the "List of cargo
ships in international trade" have only a limited access to cabotage. They may only
offer regular services throughout the year.

Ships registered in the Italian second register and passenger ships registered in the
Danish second register do not have access to Community cabotage.

1.1.1.2. Services which are still protected

As mentioned above, the liberalisation of maritime cabotage will be complete when
the following two categories of island cabotage services are liberalised in Greece:
regular passenger transport services and transport by ferry as well as services
performed by vessels smaller than 650 gross tonnes. These services benefit from a
waiver until 2004 pursuant to the cabotage Regulation.

The greatest legal advance since the last cabotage report concerns, precisely, these
services. Greece has decided to open them up to Community shipowners before
the 2004 deadline. Part I of Law 2932/2001 published on 27 June 2001 provides for
them to be liberalised as from 1 November 2002. Public service obligations will
nevertheless continue to be imposed. This law is innovatory in that it entrusts an
independent authority with supervising the sector.

In accordance with Article 9 of the cabotage Regulation,
the Greek authorities
notified the Commission services of the text of this law. Those services forwarded
their queries to the Greek authorities and raised the question of the non-conformity in
2004 of some of the provisions of the text with the cabotage Regulation.

1

As a reminder, the "off shore" registers of ships of Member States are not beneficiaries of the cabotage
Regulation (the Kerguelen Register, the French Southern and Antarctic Territories' Register (TAAF
Register), the Dutch Antilles' Register, the Isle of Man Register, the Bermuda and Cayman Islands
Registers).

6

1.1.2.

Rules on manning

Only five Member States wanted to apply the provisions of Article 3(2) of the
cabotage Regulation, which permits the State in which a cabotage service is
carried out (host State) to decide on the rules relating to the manning of vessels
carrying out cabotage with islands and vessels smaller than 650 gross tonnes -
except, in the case of cargo vessels, when the voyage concerned follows or precedes
a voyage to or from another State.

The following national texts relating to the rules of the host State on manning have
been deemed to comply with the cabotage Regulation: the French Decree No 99/195
of 16 March 1999, the Spanish Order of 22 July 1999, the Italian Decree and Circular
of 25 November 1999. The main rules contained in these texts are set out in Annex 1.

Infringement proceedings have been initiated, however, against
the Portuguese
legislation (Decree Law No 194/98 of 10 July 1998, amended by Decree Law
No 331/99 of 20 August 1999) and the Greek legislation (Circular of 21 December
1998). The Portuguese infringement is well on the way to being settled.

In accordance with the cabotage Regulation, the definitive system governing
from the Commission following a detailed
manning, based on a proposal
examination of the economic and social
impact of the liberalisation of island
cabotage, was to be approved by the Council before 1 January 1999. The
Commission submitted a report to the Council on this question on 17 June 1997 and
a proposal for a regulation on 29 April 1998 (COM(1998)251 final). The residual
competence of the host State concerned vessels smaller than 650 GT and the required
proportion of Community nationals in the crews of ships carrying out regular
passenger and ferry services (including mixed passenger/cargo services and
scheduled cruise services). Seafarers from non-member countries on board this kind
of vessel were to enjoy identical employment conditions to those of the residents of
Member States. The Commission proposal did not meet with the favour of the
Member States. The Commission accordingly withdrew its proposal on 11 December
2001.

1.1.3.

Public service obligations

Article 4 of the Regulation authorises Member States to impose public service
obligations and to conclude public service contracts for regular services to, from
and between islands provided that these obligations are necessary and are imposed
on a non-discriminatory basis in respect of all Community shipowners.

Only four of the 15 Member States do not impose public service obligations. They
are Luxembourg and Austria, which are not concerned for obvious geographical
reasons, and Belgium and the Netherlands, which do not have public maritime
services.

Among the Member States which impose public service obligations, some have
chosen to do so on the basis of an authorisation or licence system. This is currently
the case in Greece (delivery of
in Spain, Portugal and Sweden
licences),
(authorisation scheme for some services).

7

The principle of non-discrimination laid down in the Regulation became legally
binding for all Member States (with the exception of some services in Greece) on
1 January 1999, the date on which the liberalisation of island cabotage became
complete. This led to most Member States launching calls for tenders to select
operators to carry out the public services.

The Regulation's provisions regarding public service are not yet however
applied in their entirety in practice. For example, some public service contracts
concluded before 1 January 1993 (date of entry into force of the Regulation)
have not yet expired. The Regulation itself provides that these contracts may
remain in force until their date of expiry.2 Also, some Member States are still not
complying entirely with the provisions of the Regulation. Following complaints it
has received, the Commission has had to initiate several infringement proceedings.

Asked for a preliminary ruling, the Court of Justice delivered its first judgment on
in the Regulation on
the public service provisions
the interpretation of
20 February 2001 in Case C-205/99. In particular, the Court adopted a position on
the lawfulness of a prior authorisation scheme and on the possibility of the
co-existence of public service contracts and obligations on the same route.

With regard to the first point, the Court indicated that the Regulation permits the
provision of regular maritime cabotage services to, from and between islands to be
made subject to prior administrative authorisation only if:

– a real public service need arising from the inadequacy of the regular transport

services under conditions of free competition can be demonstrated;

– it

is also demonstrated that that prior administrative authorisation scheme is

necessary and proportionate to the aim pursued;

– such a scheme is based on objective, non-discriminatory criteria which are known

in advance to the undertakings concerned.

With regard to the second point, the Court indicated that the Regulation must be
it permits a Member State to impose public service
interpreted to mean that
obligations on some shipping companies and, at the same time, to conclude public
service contracts in order to ensure the same regular traffic to, from or between
islands, provided that a real public service need can be demonstrated and in so far as
that application of the two methods concurrently is on a non-discriminatory basis and
is justified in relation to the public-interest objective pursued.

The situation regarding public service obligations in the different Member States is
recapitulated in a table in Annex 2.

2

See the agreement concluded by the French authorities in 1976 with the SNCM company for maritime
services to Corsica, which expired on 31 December 2001 for example, or the agreements concluded
between the Italian authorities and the Tirrenia group companies in 1991, which will expire on
31 December 2008.

8

1.2.

Legislative developments in the EFTA States

Conditions of access to the market of the EFTA States have not changed during the
period.

The table reproduced in Annex 3 shows the rules governing establishment, the
nationality of crews and taxes which are applied to each register.

2.

Market developments

As a preliminary remark, it must be pointed out that the Commission had difficulties
in collecting the data needed to draw up this report. To begin with, Member States no
longer collect such detailed statistics as in the past. Data referring to the year 2000
were not always available, either.

The liberalisation on 1 January 1999 of cabotage services that were still protected
(regular services for the transport of passengers and transport by ferry as well as
cabotage services with islands in Spain, France, Italy, Portugal and - partly - in
Greece) did not lead to any increase in traffic nor to any significant penetration of the
national markets by vessels flying foreign flags. On the other hand, it appears that the
quality of the services rendered increased.

2.1.

Traffic developments

2.1.1. Cargo transport

2.1.1.1. Total traffic

As indicated in the table reproduced below, the volume of cargo transported by
cabotage within the countries of the European Union amounted to 260.99 million
tonnes in 1999.

The volume of cargo transported in the five Member States concerned by the
liberalisation phase beginning on 1 January 1999 (Spain, France, Greece, Italy and
Portugal) is slightly higher than the volume of cargo transported in the ten Member
States where traffic was already liberalised. The market now appears stabilised.

The liberalisation of cabotage with the islands of the five States mentioned above has
not generated new cargo flows. Unlike mainland cabotage, this market does not seem
to offer much potential for development.

9

Total volume (in millions of tonnes)

1995

1997

1999

Sub-total of countries where cabotage had already been liberalised

120.89

125.39

122.19

on 1/1/1999

Sub-total of countries where cabotage was liberalised on 1/1/1999

Total

134.3

139.45

138.8

255.19

264.84

260.99

Source: PWC

The market with the largest traffic is the United Kingdom (nearly a third of the total).
70% of cargo transported within the Member States of the north are transported in
this country. The second3 largest market is that of Italy, with a quarter of all traffic.
Italy accounts in volume for almost half of the cargo transported in the southern
Member States.

Total Volume (in millions of tons)

Austria

Belgium

Denmark

Finland

Germany

Ireland

Luxembourg

Netherlands

Sweden
United Kingdom5
Total northern countries

France

Greece

Italy

Portugal

Spain

Total southern countries

Total

Source: PWC

1995

-

0.05

19.2

5.9

3.9

0.7

-

0.04

13.6

77.5

120.89

7.9

21.9

60.3

6.0

38.2

134.3

255.19

1997

-

0.05

19.3

7.1

4.0

0.75

-

0.04

12.95

81.2

125.39

7.8

21.05

68.0

5.5

37.1

139.45

264.84

1999

-

0.05
12.84
6.6

5.35

0.85

-

0.04

13.2

83.3

122.19

8.6

22.5

66.2

6.7

34.8

138.8

260.99

2000

-

Na

Na

Na

5

Na

-

Na

Na

Na

Na

9

Na

Na

5.7

38

Na

Na

3

4

5

The Italian market occupies first place if off-shore traffic in the United Kingdom is excluded.
This fall in traffic is the result of a fixed link opening between Copenhagen and the mainland.
One-port traffic is included.

10

With regard to the EFTA countries, the very small volume of Icelandic traffic has
remained constant, while the volume of freight transported in Norway is high. It
varies according to the off-shore oil traffic.

Iceland

Norway

Total Volume (in millions of tons)

1995

0.4

39.9 (17.9)

1997

0.45

48 (20)

1999

0.4

46 (20)

Source: PWC - The figures in brackets represent volumes transported that were not
off-shore traffic.

2.1.1.2. Categories of freight transported

Turning to the type of cargo transported, it is clear that liquid bulk is still in first
place. It represents on average 55% of total traffic (76% in the United Kingdom, but
only 18% in Denmark). The dry bulk and miscellaneous cargo segments are larger in
the south than in the north.

Classification by type of freight (millions of tons)

Freight

Year

Dry bulk

Liquid bulk

General cargo

1995

1997

1999

1995

1997

1999

1995

1997

1999

Total

Total

Total

northern 21.39
southern 35.8

18.19 13.92

82.05

87.95

81.06

17.45

19.25

27.21

35.35

38.9

68.4

68.3

63.7

30.1

35.8

36.2

57.19

53.54 52.82 150.45 156.25 144.76 47.55

55.05

63.41

Source: PWC

Detailed data by country are given in Annex 4.

Where the EFTA countries are concerned, dry bulk transport predominates in
Norway. The volume of off-shore traffic in this country should not however be
forgotten (see table under point 2.1.1.1 above), since it exceeds the volumes of
"traditional" freight.

Classification by type of freight in EFTA Countries in 1999 (millions of tons)

Freight

Dry bulk

Liquid bulk

General cargo

Iceland

Norway

Total

Source: PWC

0.05

15.1

15.15

0.3

4.0

4.3

0.05

0.9

0.95

Total

0.4

20

20.4

11

2.1.1.3. Distinction between island and mainland traffic

Island cabotage accounts for 64% of the volumes of freight transported in the five
Member States concerned by the liberalisation phase dating from 1 January 1999.
This overall percentage masks significant differences according to country, since in
Italy, 78% of cabotage is of the island type, while in France, 86% of the volume of
freight transported occurs between two mainland ports.

Volumes transported in 1999 in the five southern Member States distinguishing between
mainland and island cabotage (in rounded percentages)

Country

France

Greece

Italy

Portugal

Spain

Island

Mainland

14

86

52

48

78

22

39

61

65

35

Total 5
countries

64

36

If we analyse in greater detail according to the types of cargo transported, we can see
that island cabotage accounts for most of the general cargo (86%). When it comes to
dry bulk and liquid bulk, the breakdown between island and mainland cabotage is
more balanced.

Total volumes transported in 1999 in the five southern Member States by type of freight
distinguishing between mainland and island cabotage (in rounded percentages)

Types of cargo Dry bulk

Liquid bulk

General cargo

Island

Mainland

58

42

56

44

86

14

The statistics by country on which these tables are based are reproduced in Annex 5.

2.1.2.

Passenger transport

2.1.2.1. Total traffic

As in the case of cargo traffic, passenger traffic appears stable overall. 152 million
passengers were transported in 1999, 60% of them in the five Member States
concerned by the liberalisation beginning on 1 January 1999. The largest national
market for passengers is the Greek market (nearly 30% of the total), followed by the
Italian and British markets (each having about a quarter of the total).

Over this period, there was an increase in demand in the southern countries. This
appears to be partly due to the improvement of the services offered. In the north, on
the other hand, passenger traffic fell. In particular, the fall in traffic recorded in
Denmark is due to the opening of the bridge connecting Copenhagen to the
mainland.

12

Passengers transported (millions)

1995
-
-
21,5
4,0
5,0
-
-
-
1,1
40
71,6
1,3
36,0
38,0
0,4
7,1
82,8
154,4

1997
-
-
16,4
3,4
5,0
-
-
-
1,1
40
65,9
1,28
41,3
37,2
0,35
6,5
86,6
152,5

1999
-
-
10,5
4,0
5,0
-
-
-
1,2
37,6
58,3
1,5
44,1
39,9
0,4
7,9
93,9
152,2

2000
-
-
Na
4,18
Na
-
-
-
1,3
Na
Na
1,39
Na
Na
Na
Na
Na
Na

Austria
Belgium
Denmark
Finland
Germany
Ireland
Luxembourg
Netherlands
Sweden
United Kingdom6
Total northern countries
France
Greece
Italy
Portugal
Spain
Total southern countries
Total

Source: PWC

With regard to the EFTA countries, the number of passengers transported in Norway
is very high. It exceeds the number of passengers transported in Greece.

Passengers transported (millions)

1995

0.3

43.2

1997

0.4

44.6

1999

0.4

46.0

Iceland

Norway

Source: PWC

2.1.2.2. Cruises

The world cruise ship fleet has a total capacity of approximately 8.5 million GT. Of
these 8.5 million, 2.5 million (nearly 30%) are flying EEA flags. The largest
European fleet flies the British flag (750 000 GT), followed by Italy, Norway and the
Netherlands (approximately 500 000 GT each).

Quantitatively, there are more international cruises than any other type.

Among the Member States which are cruise destinations, first place is taken by
Greece for the number of stops and Italy for the number of embarkations.

6

Non-official estimated data contained in 2nd and 3rd reports for 1995 and 1997. 12 million of the
37.6 million passengers transported in 1999 were conveyed in the context of island cabotage.

13

2.2.

Respective market shares of the first and second registers

The table below gives the data available on the relative importance of the first and
second registers of Member States in cabotage traffic. The data concern only five
Member States and Norway. This table clearly shows the importance of the first
registers for passenger transport. Nevertheless, the role of the second registers is
tending to increase.

Incidence of 2nd register (% transported by national fleet) in 1999

Country

Passengers

1st register
Dry bulk

Liquid

General

Passengers Dry bulk

Liquid

General

2nd register

100

13

100

70

-

100

bulk

cargo

-

3

100

7

-

10

40

100

100

100

-

100

-

-

-

20

100

0

bulk

100

97

-

93

100

90

cargo

60

-

-

-

100

0

-

87

-

30

100

0

Denmark

France

Italy

Portugal

Spain

Norway

100

100

100

80

-

100

Source: PWC

2.3.

Foreign-flag penetration

As a general rule,
led to a significant
the liberalisation of cabotage has not
penetration of national markets by EEA flags. These markets have in fact warded off
penetration by improving their competitiveness, liberalisation being accompanied by
a reduction in the cost of the national registers and a modernisation of their fleets. At
the present time, the markets of the Member States concerned by the liberalisation
which began on 1 January 1999 remain to a great extent dominated by national
fleets: 98% of the traffic in Greece,7 approximately 90% of the traffic in Italy,
Portugal8 and Spain. Among the five Member States concerned, the market which is
most open to non-nationals is the French market, where 25% of vessels flying EEA
flags and 7% of non-EEA vessels operate. In the other countries, there is a sharp
distinction between Finland (90% of vessels flying the national flag) and Ireland
(only 5%). The greatest number of non-EEA flags are to be found in the United
Kingdom, Ireland, Germany and Sweden.

7

8

This very high figure can be explained by the incomplete liberalisation of cabotage, the excentric
geographical situation of Greece and the competitiveness of its fleet.
Many foreign companies decided to register their ships under the highly competitive MAR flag.

14

Percentage of fleet participating in cabotage traffic

Freight

Year

National flag

Other EEA

Other non-EEA

1995

1997

1999 1995 1997 1999

1995

1997

1999

Austria

Belgium

Denmark

Finland
Germany9
Ireland

Luxembourg

Netherlands
Sweden10
United Kingdom

France

Greece

Italy
Portugal11
Spain

Source: PWC

-

100

48

86.4

83

5

-

100

84.6

25.4

85

99.5

99.5

28.3

93.5

-

100

48

88.1

68

4

-

100

79.2

13.9

73

99

98.5

99.0

84.6

-

100

NA

-

-

-

-

NA

NA

89.9

12.7

11.9

69

5

-

100

48

29

68

98

91.7

91.2

89.1

15

71

-

-

9

73

-

-

NA

6.9

28.9

25.2

7

0.25

0.2

70.1

4.2

21

0.5

1.2

0

6.2

-

-

NA

9.8

9

71

-

-

35

33

25

1

4.1

4.1

3.4

-

-

NA

0.9

2

24

-

-

NA

45.7

8

0.25

0.3

1.6

2.3

-

-

NA

0

23

23

-

-

13.9

60.9

6

0.5

0.3

1.0

9.2

-

-

NA

0.3

22

24

-

-

17

38

7

1

4.2

4.7

7.5

The penetration of foreign vessels in the EFTA countries remains limited.

Iceland

Norway

Percentage of fleet participating in cabotage traffic

National flag
100
74.3

Other EEA
-
14.7

Other non-EEA
-
11.0

Loaded

Unloaded

78.3

11.3

10.4

Source: PWC.

3.

Manning costs

Manning costs vary according to the composition of crews (number of seafarers on
board, their training and nationality) and the taxes and social charges imposed by the
national authorities.

Manning costs for cargo vessels are almost three times higher in Finland (the most
costly register for this feature) than in Portugal. The Portuguese second register, the
MAR register, appears the least costly in Europe.

The disparities are not so great in the case of passenger vessels.

Details of the costs for each of the Community registers are given in Annexes 6
and 7.

9

10

11

Estimated data based on the trend up to and including October 2000.
The changes in 1999 are due to the fact that the Swedish government provided the information for its fleet
by the number of cabotage ships rather than the number of tonnes transported.
MAR not included as national in 1995, included as national in 1997.

15

4.

Conclusions

4.1.

The impact of cabotage liberalisation

The liberalisation of the last cabotage services that were still protected (with the
exception of the two abovementioned segments of the Greek market) resulted in the
presence of Community operators in markets which up until then had been reserved
to nationals. The percentage of non-nationals in the markets of the countries
concerned by the liberalisation starting on 1 January 1999 remains, however, limited.
In this respect, the Regulation's provisions on manning and on public services have
certainly played a restraining role.

In other ways, liberalisation has had a positive impact, as the national fleets of the
countries concerned have modernised to face the increased risk of competition.

As liberalisation has now been practically completed and the market appears
stabilised, the question as to the content of forthcoming reports on the application of
the cabotage Regulation must be raised.

4.2.

Appeal for consultation on the content of forthcoming reports on the application of
the cabotage Regulation

The impact of cabotage liberalisation in Greece on 1 November 2002 will not be
known before 2004. It will only be possible to analyse it, therefore, in the two-yearly
report referring to the years 2003-2004.

That is why the question must be raised as to the content of the report relating to the
years 2001-2002 and to the reports which will follow the two-yearly report of
2003-2004. Should these reports confine themselves to presenting the available
Community statistics on cabotage - which are fewer and fewer in number - or should
they abandon this quantitative approach and focus on a more qualitative analysis of
the problems encountered in implementing the Regulation and the solutions found?
One might also envisage a lower frequency, with reports being produced only every
three to four years, for example.

If the quantitative approach is maintained and the Commission considers it of
interest, the way in which the cabotage report is compiled will have to be reviewed.
Member States will have to collect the basic market statistics and forward them to
the Commission, which will be responsible for their dissemination.

To shed light on this discussion, the Commission would like to know what kinds of
statistics are still compiled at national level and to what extent their dissemination to
all the Member States is useful. In addition, it is inviting the Member States to
communicate their thoughts on the content of the cabotage reports which will have to
be produced in the years to come.

16

For the Commission to be able to take them into account before embarking on the
preparatory work for the 2001-2002 two-yearly report, these observations will have
to be communicated to it before 31 May 2002. They should be sent to the following
postal address:

European Commission
Directorate-General for Transport and Energy
Maritime Transport Directorate

Office DM 28 3/50
B-1049 Brussels

Finally, on the occasion of the publication of this report, the Commission would like
to announce its intention of adopting a communication on the interpretation of the
cabotage Regulation at the end of the year 2002. This communication will deal with
the questions of public service in particular, including mainland connections and
those with small islands.

17

ANNEX 1 Rules on manning adopted in accordance with Article 3 of the cabotage Regulation

Country/Text EEA

nationals

Social

security

Training

Working conditions

(proportion)

Minimum crew

At least 50% of the
crew as well as the
captain and the first
officer

Application of
SOLAS Convention

the

100%
EU/EEA
(exceptions provided
for
qualified
less
crew members)

Application of
SOLAS Convention

the

Spain

Order of
22/07/1999

Italy

Decree
No 529 of
25/11/1999
Circular of
25/11/1999

EU/EEA
nationals

Third
nationals

country

Working hours

Wage

of

as

the
Coverage
same
in
level
Spain for accidents,
illness, maternity, old
age,
invalidity and
unemployment

Coverage in one
of the EU/EEA
States
(EEC
Regulation No
1408/1971)

Coverage in one
of the EU/EEA
States

as

Same
national
performing
comparable service

on board
vessels
a

least

the
At
minimum
wage
applicable in Spain

STCW

Crew in charge of safety
must have a sufficient
knowledge
Italian
(pursuant
to Directive
94/58)

of

The same as on board
vessels
national
performing
a
comparable service

least

the
At
minimum
wage
fixed by law and
collective
agreements

France

100% EU/EEA

Decree
No 99-195 of
16/03/1999

Application of
SOLAS Convention

the

Coverage in one
of the EU/EEA
States

STCW

Application of Directive
94/58

The same as on board
vessels
national
performing
a
comparable service

18

the

least

At
growth-linked
guaranteed
minimum
(maritime SMIC)

wage

Country

Route/area

Assens-Baago

Boyden – Fyndshav

Spodsbjerg – Tars

Faaborg-Bjorno

Faaborg-Lyo-Avernako

Start

date

1/1/01

1/5/98

1/4/00

1/1/01

ANNEX 2 Public service obligations in the Member States

Duration

Expiry date

Comments

5 years

5 years

5 years

5 years

31/12/05

Operated by Assens-Baago Faergen A/S - Remuneration: 1.578.690 DKK/year

30/4/03

31/3/05

Operated by Scandlines Sydfynske A/S - Remuneration: 11.613.552 DKK/year

Operated by Scandlines Sydfynske A/S - Remuneration: 7.918.669 DKK/year

31/12/05

Operated by Bjorno Faergen – Remuneration 1.000.000 DKK/year

Operated by O-Faergen A/S – Remuneration 3.200.000 DKK/year

Denmark

Stryno- Rudkobing

1/1/01

5 years

31/12/05

Operated by Stryno-Rudkobing Faergefart A/S - Remuneration: 2.141.000
DKK/year

Marstal-Birkholm

1/1/01

5 years

31/12/05

Operated by Gustav Anneberg Jensen - Remuneration: 310.000 DKK/year

20 routes to 26 islands

These routes are, in most cases, run by local authorities

2 additional routes to Samsø

30/11/98

5 years

1/12/03

Operated by Samsø Linien ApS

Sjaelland:

Jylland:

1 routes to Havnso.

1/1/01

1/7/01

Finland

Southwestern archipelago

Mainland – Corsica

31/12/1976

(various routes)

1/01/02

France

Atlantic coast

3 years

5 years

25 years

5 years

1/12/03

30/6/06

Remuneration: 16.304.220 DKK/year

Remuneration: 13.000.000 DKK/year

Four ferries

14 vessels involved

31/12/01

Operated by SNCM-CMN.

service

SNCM/CMN
Public
remuneration: FF 414 millions ) & light public service obligations Nice-Corsica
and Toulon-Corsica.

contract Marseilles-Corsica

(operator:

Finistère – 4 islands, Morbihan – 6 islands, Loire Atlantique – 1 island,
Charente maritime – 1 island.

31/12/06

19

Country

Route/area

Start

date

Duration

Expiry date

Comments

Germany

Greece

Italy

Ireland

Portugal

Spain

Lower Saxony (5
routes)

Ministry of Aegean

31 routes

Ministry of Merchant
Marine

11 routes

19 National routes

11 to Sardinia

6 to Sicily

2 to Sardinia & Sicily

46 Local routes to
Islands

Mainland Portugal to
Madeira and Azores

9 + 1 lines Mainland
with Canaries/
Baleares /

Ceuta / Melilla

1/01/1997

15

31/12/2011

No tender.

1 year

1 year

Frequency: up to 8 times a week. Remuneration: From GRD 35 000/year to
GRD 9500.000year

Frequency: up to once a day. Remuneration: From GRD 420 000/month to
GRD 2 550 000/month

31/12/08

1 to 4 years

Continuity of the
service must be
guaranteed for at
least one year.

Current contract 3
½ years

The services are tendered.

Public service obligations for cargo only. Authorisation system.

Ferry and passenger services – Remuneration:

€
5.7 million/ year

Inter Canary islands

5 years maximum

Tenders through regional government

5 routes

20

Country

Route/area

Start

date

Duration

Expiry date

Comments

Sweden

Mainland – Gotland

1/1/98

4+2 years

31/12/03

Operated by Destino Gotland AB

2 routes:

Visby – Nynäshamn

Visby – Oskarshamn

United
Kingdom

Northern Ireland

1/4/97

5 years

31/3/02

Ballycastle – Rathlin

Island – 1 route

Northern isles

1/10/1997

5 years

1/10/2002

Operated by P&O Scottish Ferries. Remuneration: GBP 11 million/ year

Mainland –Orkney/
Shetlands – 2 routes

Clyde and Western
isles:-28 routes

1960

Open ended

None

(most recent
Undertaking:
1995)

Operated
by
Remuneration:GBP 20 million/year

state

owned

company

(CalMac).

Tender in preparation in order to comply with EC rules.

21

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

ANNEX 3 Overall view of provisions on cabotage in the EU and EFTA countries

None applicable for
shipping

Social security
exemptions (total
exemption for
employers’
contributions and
partial exemption for
seafarers’
contributions on
board EU vessels).

Roll-over relief.

Seafarers on board
DIS vessels are tax
exempted and paid
net wage.

Austria

No maritime cabotage

Belgium

Not restricted

-

-

1st register

Not applicable

None negotiated on ship
by ship basis.

Not applicable

should

Captain
be
Belgian citizen, waivers
given in case of non-
availability

2nd register

Not applicable

Not applicable

2nd register

Not applicable

Not Applicable

1st register

Vessel owned/managed by EU
citizen/company domiciled in
Austria

Vessel owned by Belgian/EU
citizen or a non-EU citizen
domiciled in Belgium or by a
company having its registered
office in the EU. The vessel
must
from
be managed
Belgium

DIS Register:

- Captain must
Danish national.

be

Vessel owned by Danish or EU
persons or companies managed
from Denmark.

DIS Register: see 1st
register

Third

-
nationals
employed
wage conditions.

can
on

country
be
local

Denmark

Not restricted except for DIS
passenger vessels

For micro-cabotage there was
restriction, which
a formal
was
by Decree
658/94-

repealed

- Decree 658/94 allows all
foreign vessels to participate.

By Law 464 of 12
June 1996 DIS cargo
vessels were allowed
to Danish cabotage
as per 1 December
Passenger
1996.
remain
vessels
excluded
from
Danish cabotage

Not applicable

- Captain must
be
Danish. Third country
nationals
be
on Danish
employed
terms

can

22

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

1st register

2nd register

1st register

2nd register

Registration
and

- Registration governed by the
Act
Marine
Finnish
(512/1993)
(674/1994)
Maritime Code
(amendments
into
entered
effect on January 2000)

- At
least 60 percent of the
vessel must be owned by
Finnish citizens or Finnish
registered companies.

the

- The MOTC also permits
to be
foreign-owned ships
Finnish
in
registered
register
the
provided
person or company owning at
least 60 percent of the vessel
has its domicile or residence
the EEA.

that

Special reductions of
seafarers’ income tax
for vessels flying the
Finnish flag (18%
reduction of
municipal tax and
30% of State tax).
The State also
participates in the
pension payments to
seafarers.

A tax rebate of
seafarers’ income tax
and partial refund of
social security costs
is paid to the
employer. This is
available for ships
listed on the
International
Register.

List
-
Vessels
International
(Act No 1707/1991)

of Cargo
in
Trade

- Cargo or primarily
cargo vessels may be
they are
entered if
registered
the
in
Finnish 1º register, if
primarily
they
used
foreign
traffic and if they are
less than 20 years old.

are
for

Registration
permitted
passenger/car
or vessels
only in cabotage.

not
for
ferries
engaged

passenger
Only
operating
vessels
third
between
and
not
countries
regularly
operating
between Nordic ports
may be entered.

Finland

Restricted

Cabotage governed by Section
4
Trades
Practices Act.

of Restrictive

- Non EU vessels
generally
entering
trades

prohibited
domestic

are
from
coastal

Vessels in the List of Cargo
vessels in International Trade
to
have
cabotage.

restricted

access

of

Act
Amending
(1362/94)
22
December 1994 to
the
Restrictive
Trades Practices Act
abolished
restrictions
concerning cabotage
on EU vessels as
from
1.1.1995
(accession).

-Bilateral agreement
with Norway as of
1.1.97.
to
NIS

applies

Mainland cabotage:

- Special
permits
obtained from the
MOTC for non-EU
vessels in mainland
cabotage where no
other suitable vessel
is available.

- Permits are granted
for a maximum of
one year to foreign
trading
vessels
between

Aland
mainland.

and

the

Master must be Finnish
national

- Master
national.

Finnish

No other restrictions

- At least half the crew
must
of
consist
EEA/EU citizens.

on

- Recruitment of non-
EEA crew members is
permitted
certain
conditions by way of
derogation
from the
usual collective labour
agreements.

23

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

1st register

2nd register

1st register

2nd register

France

Restricted

- Art.257.1 of the ‘Code des
Douanes’ of 11/5/77:

-UE/EEA
considered equal
ships.

vessels

are
to French

-Decree 99-195 sets the host
state rules for vessels/cruises
under 650 GT in mainland
cabotage and for vessels in
for
Island cabotage, except
vessels
consecutive
in
services.

Germany

Restricted

Regulated in Art.5:

Paragraph 2, 3 “Gesetz über
die küsten-schiffahrt”

(Law on coastal shipping).

Vessels used in international
trade for the greater part of the
be
financial
registered in the ISR register.

year, must

(Flaggenrechtsgesetz).

5

of

the
Article
über
“Gesetz
Änderung
der
Rechtsvorschrift en
auf dem Gebiet der
Seeschiffahrt”
(which came
into
effect on 23 July
1994) brought Art. 5
in line with Reg.
3577/92

can

Waivers
be
granted to non-EU
vessels

(Art.257 “Code des
Douanes”).

1st
(Metropolitan register):

Register

- Master and first mate
French citizens.

- Other crew citizens of
the EU or EEA.

Taaf
(Kerguelen)
Register: 35% of the
crew should be French
nationals, incl. Captain
and 1st engineer.

-50% of the vessel must be
owned by a physical person
who is a national of EU/EEA
or

registered

100% of the vessel must be
owned by a company having
its
in
EU/EEA and its operation
carried out from a permanent
establishment in France.

office

legislation
from

restricts
-French
investments
non-
EU/EEA parties to less than
50% of the total shares if the
company or vessel is still to be
considered French

>50% ownership/control by
German or EU nationals with
representatives domiciled in
Germany or by German or EU
their
companies
central
registered
administration
principal
place of business in the EU.

office,
or

having

(Art.
2
“flaggenrechtsgesetz”)

1&

of:

Same, but:

- Vessels on ISR list,
(operating> half year
may
international)
employ all foreigners.

- Vessels>half year in
cabotage cannot enter
ISR list and may only
if
employ foreigners
not
nationals
available.

are

to

for
are
the

Requirements

-
crewmembers
according
“Schiffsbesetzungs
ordunung” the same for
vessels:
all German
Master
be
German national, 1 or 2
officers German or EU
national. Other crew any
nationality.

should

the

Article 2.2 and 2.3
of
amended
“Law on Coastal
Shipping” provides
that waivers to non-
EU vessels may
only be granted if no
EU
are
vessels
available or if they
are available at very
unfavourable
conditions.

- Waivers can also
be granted on the
basis of reciprocity.

TAAF register similar
to 1st register.

-Capital allowances
to shipowners.

-Tax refunds for
shipping company
businesses.

-Tax incentives for
new companies
(whatever the
economic sector).

-New taxation
measures: the quirat
scheme has been
abolished and
replaced in 1998 by
the Economic
Interest Group (EIG)
Taxation.

- Ships operating
solely in cabotage:
no tax relief on
income and no
subsidies.

Ships operating
internationally may
opt between normal
taxation or the
tonnage tax.

- They also benefit
from 40% income
tax reduction

ISR same
register.

as

1st

24

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

1st register

2nd register

1st register

100% of
EU/EEA nationals

crew of

Not applicable

can

Waivers
be
granted on condition
of reciprocity:

- Art.
CPML

1696

of

Article 5 of CPML (amended
by Presidential Decree nº 27-1-
2000):

> 50 % of shares of the vessel
must be owned by Greek or
EEA nationals or companies.
The vessels must be managed
from Greece.

Greece

Restricted:

Presidential

166

Regulated in Code of Public
Maritime
(CPML).
Law
Decree Law 187/73 Arts. 165
and
reserves Greek
passenger and cargo cabotage
to Greek
This
legislation has been partly
adapted to Reg. 3577/92.

vessels.

Act
will
2932/2001
completely liberalise Greek
cabotage
from November,
2002 (14 months earlier).

Decree
partly
Greek
accordance
CR.3577/92.

215/94
harmonized
in
with

law

- Allows access of
other EU vessels in
non-strategic
mainland trades with
GT.
vessels>650
Presidential Decrees
117/97 and 84/98
further
partly
Greek
adapted
legislation
to
Reg.3577/92

of

of

Justice

Following the judgment of the
Court
the
European Communities of 12
June 1997 in Case C-151/97,
Ireland adopted the Merchant
(Miscellaneous
Shipping
provisions) Act. 1998. Vessels
must
by EU
owned
nationals or a body corporate
established under and subject
to the law of a Member State
and having its principal place
of business in a Member State.

be

Ireland

Not restricted

-

Not applicable

Not applicable

- Officers to be Irish,
UK,
or
Commonwealth citizens.

other

EU

- Ratings: Irish, UK, or
other EU citizens

25

2nd register

Not applicable

Not applicable

Officers pay 9%
income tax; other
crew members pay
6% income tax.

- Reduced rate of
social security rate.

- Tonnage tax is
imposed on Greek
tonnages serving
ports outside Greece.

- 10% Corporate
profits tax.

- 15% straight line
depreciation, for the
first 6 years, 10% for
the 7th year.

- Special reduction
in seafarers’ income
tax for seafarers at
sea for at least 196
days per year.

- Reimbursement of
social charges paid
by employees in
respect of seafarers
on a MS registered
vessel.

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

Italy

Restricted

Regulated in Article 224 of
della
the
“Codice
Navigazione”
(Shipping
Code). As amended by Law
30/98
to
Community vessels.

restricted

-Circular of 25 November
1999 states the host state rules
for shipowners that wish to
render their services in Italian
cabotage.

Luxembourg

No maritime cabotage

Netherlands

Not restricted

1st register

2nd register

1st register

2nd register

- Revised art. 224
allows
other EU
vessels to participate
in Italian cabotage
in accordance with
Reg. 3577/92

The Ministry
of
Transport/Navigation
may grant waivers on
case by case basis
through
special
authorization

- Master
officer to be Italian

and

chief

- Other crew members
Italian or EU citizens
“Codice
318
Article
della Navigazione”

2nd Register,
instituted
through
law 30/98,
second register vessels
have no access to the
cabotage trades.

Over 50% vessel shares must
belong to Italian/Community
nationals or to Italian or EU
companies. Art. 143 CDN, as
modified by Law 30 of 27
February 1998.

2nd
not
Register
applicable to vessels
operating in cabotage

Tax breaks for the
three-year period
(1999-2001).

Partial exemption
from social security
charges.

Owned>50% by nationals of
EU or commercial companies
with registered office in the
significant part of
EU,
management is handled from
Luxembourg.

if

2/3 vessel must belong to
Dutch national or legal entities
EU/EEA nationality.
with
part
Substantial
of
(operational)
management
must be carried out from the
in
Netherlands. Regulated
Dutch Commercial Code Art.
311.

Not applicable

- Reduced rate of
seafarers’ income
tax…

Not applicable

- Withholding of tax
and social security
charges normally
payable by
shipowner/employer

- Option to apply
tonnage tax or
corporate tax on
business results

-

-

Not applicable

Independent
register
mainly used by Belgian
owners.

Not applicable

EU

Captain
licence
Luxembourg.
according
standards.

citizen,
recognized by
Crew
STCW

to

Not applicable

Not applicable

Captain Dutch national,
other crew according to
standards
STCW
certificates
recognized
by Dutch authorities.

26

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

Portugal

Restricted:

Regulated in Decree Law
194/98.

Legislative Decree 331/99 of
20 August, enables MAR-
registered vessels
to have
access to Portuguese island
cabotage and sets the host
state rules.

Restricted – Regulated in
Law 27/1992 on State Ports
and Merchant Marine.

REC vessels have unrestricted
access to cabotage.

Order of Transport Minister
of 22 July 1999 establishes
the Host State Rules for ships
in Spanish Island Cabotage

Spain

Legislative Decree
331/99 of 20 August

revoked Decree-

-
Law 31/97.

re-drafted Article
-
15 of Decree Law
96/89 and Articles 4
and 6 of Decree-
Law 194/98 of 10
July.

Art.5 of Decree Law
allows-
194/98
to
subject
authorization of
the
General Directorate
(DGPNTM) – the use
in
of other vessels
non-
case
of
availability
of EU
vessels

RD 2221/98, of 416
October
1998,
allowed REC ships
to participate in all
cabotage
Spanish
trades (incl.
Island
cabotage)-

- Art.81
of Law
27/1992 regulates the
possibility for waivers
exceptionally, in case
of non-availability of.
Spanish (EU) ships

1st register

2nd register

1st register

100% Portuguese or EU
nationals. Captain/chief
mate Portuguese, unless
authorization obtained in
special conditions

Madeira
(MAR)
register: Captain + 50%
crew Portuguese or EU
nationals.
With
authorization
be
exemptions
obtained in case of
non-availability

can

Regulated by Decree Law
196/98, which establishes the
regulatory and legal context of
maritime transport activities:

Shipowner with address or
main
office
head
establishment
national
territory and to be registered at
DGPNTM

and
in

2nd register

Madeira register:

- (Branch) office or
legal representation in
Madeira island

- Captain & 1st officer
Spanish nationals,

Canary Island Register
(REC):

- Other
nationals.

crew

EU

- Captain & 1st officer
Spanish nationals,

Any Spanish or EU national or
company with representative
appointed in Spain.

(Article 76 Law 27/92)

-Other crew minimum
50% EU nationals,
for
possible waiver
additional
non-EU
crew if EU nationals
not available.

Any
shipping
company, established
either in Spain, EU or
in a third country may
register a ship under
the REC if the vessel
is managed from the
Canaries or if it has a
permanent
establishment
Canary Islands.

in the

- Up to 1.1.99,
involved
liberalised
crew to be EU.

in
trades

if
non-
all

Nationals

27

-Income tax on
30% of
shipowner´s profit.

-No corporate tax
in international
waters

- Tax free reserves

-Full deduction on
workers´ income
tax (MAR).

Law 19/1994,
modified last in
December 1996,
allows fiscal
allowances for
REC registered
vessels.

-90% reduction
in employer
Social Security
contribution,

-90% reduction
of Corporate
Tax.

-exemption of
income tax with
respect to 50%
of seafarers’
income.

Country

Basic Principle on Cabotage

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

1st register

2nd register

1st register

Sweden

Restricted

Decree
amended.

of

1

July

1995

235/75. giving access to EU
vessels

been
Trades have
to EU
liberalised
in
vessels
accordance
with
Regulation 3577/92
1.1.95
since
(accession).

Exemptions

are
-
by
the
granted
Maritime
Swedish
in
Administration
cases
no
where
suitable Swedish/EU
vessel is available

Bilateral
agreement
with Norway (1989)
applies to NIS

Approximately
exemptions
each year

20
awarded

- Captain must
be
Swedish (no exceptions).
No other restrictions.

- All crew retained on
collective
wage
agreements regardless of
nationality

Not applicable

- Governed by Maritime Act
(1994:1009).

>50% to be owned by Swedish
citizen/corporations.

reserves

the
- Government
right to permit foreign vessels
to fly the Swedish flag whose
operation is under Swedish
control and shows owner has
his permanent
in
Sweden.

residence

Vessel>50% owned by EEA
nationals or companies having
their registered office, central
administration
principal
place of business in the EEA
and whose
is
controlled from Sweden may
be registered in the Swedish
register

operation

or

United
Kingdom

Not restricted

-

Not applicable

Not applicable

- For “strategic” ship-
be
types: master
British, Commonwealth,
EEA
NATO
or
nationality.

to

Vessel>50% owned by citizen
or bodies incorporated in the
EU
Dependent
UK
Territories

or

Other

-
no
nationality requirements

ships

2nd register

Not applicable

- Tax – free
reserved.

-Shipowners
receive full rebate

of tax paid on
seafarers’ income
plus an additional
relief of SEK
58,000 per full time
employee for social
cost contributions

-Special tax regime
for seafarers
abolished in 1998.
Seafarers now pay
full income tax on
gross earnings.

Not applicable

- Roll-over relief

-Exemptions for
UK seafarers not
resident in the UK
for more than 183
days per year.

-Optional tonnage
tax, which replaces
corporate tax.

28

Country
12

Basic
Cabotage

Principle

Iceland

Not restricted:

Open coastline

Norway
13

Not restricted:

- Open coastline

- NIS vessels are in
principle excluded, but
permission is given for
cargo vessels if certain
are
requirements
fulfilled

on

Comment

Waiver system

Crew nationality requirements

Vessel ownership requirements

Fiscal regime

1st register

2nd register

1st register

- Practically unlimited scope
for foreign merchant ships to
trade
Icelandic
ports.

between

- As
from 5.10.97 CR
(Joint
applies
3577/92
Committee Decision No
70/97)

Under the scope of the
Public Transportation Act
1976, all operators
deploying vessels on
scheduled coastal passenger
services are required to
obtain a licence from the
MOTC. As from 5.10.97 CR
3577/92 applies to all EEA
members (Joint Committee
Decision No 70/97)

Not applicable

- Since EEA, all EEA citizens
are eligible crew.

Not applicable

Act

Under

Rights

26/1987
-
Employment
of
Foreigners, all non-EEA crew
members must obtain a work
from the Ministry of
permit
Social Affairs
entering
for
employment on board

- None, except master must be
Norwegian.

This
requirement
process of being changed

is

in the

- All
collective wage agreements.

crew retained

on

NIS register:

-
General
requirement for
Norwegian
master.

for

However
exemptions
other
nationalities are
readily
available.

- NIS vessels can
some
enter
cargo
cabotage
trades.
Such
vessels are entered
on a list of
the
Maritime
The
Directorate
current
list
includes 16 mostly
highly specialised
gas tankers

- Governed by Registration of
ships Act115/1985, previously
limited registration to Icelandic
nationals/residents.

of

- Amending Act 62/1992 gives
to
right
citizens/corporations of EEA
countries

registration

- Norwegian ordinary Register
(NOR) governed by Maritime
Transportation Act.

to

ownership is

- Open
EEA
only
citizens/residents or unlimited
partnership where at least 60%
by EEA
of
citizens or
is a
limited company where at least
60% of
and
operating powers are in EEA
hands.

the owner

capital

the

2nd register

Not applicable

by

into
the

NIS register put
operation
Norwegian
International
Ship
Register Act of 12.6
1987.

If

as

Ownership
-
for
requirements
NOR.
nationality
conditions are not met,
registration also open
to limited company or
partnership with head-
office in Norway, or
ship-owning
partnership
Norway-based
managing
or
owner with appointed
representative
authorised
accept
to
writs on behalf of the
owner

owner,

with

- Seafarers obtain following
tax privileges:

- Income tax deduction ISK
685 (US 10.4) x 1.49 for each
sea day.

- Shipowners do not receive
any rebates/refunds for social
cost contributions

- All crew members serving on
NOR/NIS vessels are entitled
to special tax deduction limited
to 30% of their gross income,
but not>NKr 70,000 per year.
Limited to seafarers working
for a minimum sailing period.

- Tax rebate system revised
spring 1998.

- Provides refunds to ship
owners of 12% tax paid on
seafarers’ gross wages.

Rebates only available for
crew members resident/liable
for taxation in Norway.
Restricted to NOR vessels
fulfil necessary
residency/liability
requirements

-Tonnage tax system.
Introduced in July ‘96

12

13

EEA Joint Committee decision No 70/97, of 4 October 1997 (OJ L30, 5.2.98) amended Annex III (Transport) to the EEA agreement in order to provide that Regulation
3577/92 applies to all.
The Norwegian Maritime Directorate has proposed a formal amendment in “Regulation of 29 April 1998 nº 398 concerning Qualifications, Requirements, Issue of
Certificates, Rights for Personnel on Norwegian Ships”. This amendment will formally confirm existing practice, which provides for equal treatment of all EEA nationals,
also for the position as master on Norwegian registered vessels.

29

ANNEX 4 Types of freight transported in the Member States

Classification by type of freight (millions of tons)

Freight

Year

Dry bulk

Liquid bulk

General cargo

1995

1997

1999

1995

1997

1999

1995

1997

1999

Austria

Belgium

Denmark

Finland

Germany

Ireland

Luxembourg

Netherlands

Sweden

United Kingdom

-

-

5.9

1.3

0.8

0.05

-

0.04

5.6

7.7

Total

northern 21.39

France
Greece

Italy

Portugal

Spain

1.8
10.1

18.7

0.3

4.9

Total

Total

southern 35.8
57.19

Source :PWC

-

-

5.7

1.3

1.25

0.05

-

0.04

5.15

4.7

18.9

1,9
9.25

19.2

0.3

4.7

-

-

4.7

2.5

2.25

0.03

-

0.04

3.1

1.3

-

-

0.05

0.05

3.8

4.5

2.85

0.65

-

-

3.9

5.7

2.45

0.7

-

-

-

0.5

2.3

4.0

2.7

0.81

-

-

-

-

9.5

0.1

0.25

-

-

-

-

-

9.7

0.1

0.3

-

-

-

7.7

62.5

7.45

67.7

7.4

63.8

0.3

7.3

0.35

8.8

-

-

5.8

0.1

0.4

0.01

-

-

2.7

18.2

13.92

82.05

87.95

81.06

17.45

19.25

27.21

1,5
9.8

19.8

1.0

6.8

5,3
9,0

27.5

4.7

21.9

68.4

5,1
7.9

31.4

4.0

19.9

68.3

6,3
8.5

30.8

4.3

13.8

63.7

0,8
2.8

14.1

1.0

11.4

30.1

0,8
3.9

17.4

1.2

12.5

35.8

0,8
4.2

15.6

1.4

14.2

36.2

35.35

38.9

53.54 52.82 150.45 156.25 144.76 47.55

55.05

63.41

30

ANNEX 5 Volumes transported in 1999 by type of freight distinguishing between
mainland and island cabotage (in millions of tonnes)

Country

Dry bulk

Liquid bulk

General cargo

Total

Island Mainland

Island Mainland

Island Mainland

France

0.2

Greece

5

Italy14

14.1

Portugal 0.7

1.3

4.8

5.7

0.3

0.2

2.1

26.8

0.5

6.1

6.4

4.0

3.8

0.8

3.8

11.1

1.4

0

0.4

4.5

0

8.6

22.5

66.2

6.7

Spain

2.48

4.32

6.15

7.68

13.97

0.25

34.85

Total

22.48

16.42

35.75

27.98

31.07

5.15

138.85

14

In the case of dry bulk and general cargo, these are estimates calculated on the basis of a total figure
comprising both types of freight (25.2 million tonnes for island cabotage and 10.2 million tonnes for
mainland cabotage).

31

ANNEX 6 Comparison of manning costs for cargo vessels

Manning costs for cargo vessels (euros/month)

General cargo 1500GT

Solid bulk 3000 GT

Liquid bulk 9000 GT

Finland

Iceland

NOR

Sweden

Denmark

France

Belgium

Holland

Kerguelen

United Kingdom

Germany

Portugal

NIS

DIS

ISR

Spain

Ireland

Italy

Greece

REC

MAR

Source PWC

72 140

66 912

64 821

62 730

58 548

54 366

52 275

51 230

50 184

48 093

41 820

41 820

40 775

40 775

39 729

37 638

35 547

30 738

30 612

26 300

23 675

72 140

66 912

64 821

62 730

58 548

54 366

52 275

51 230

50 184

48 093

41 820

48 100

40 775

40 775

39 729

55 093

35 547

30 738

30 612

40 580

27 500

103 378

84 111

122 299

78 530

112 169

69 157

63 985

78 216

59 288

58 809

57 027

69 300

77 964

76 184

63 414

57 821

44 111

48 741

48 753

53 100

39 750

32

ANNEX 7 Comparison of manning costs for passenger vessels

Manning costs for passenger vessels (euros/month)

Jet foil 1500GT

Ferry 5000 GT

Cruise 20.000 GT

Finland

Iceland

NOR

Sweden

Denmark

France

Belgium

Holland

United Kingdom

Germany

Portugal

NIS

DIS

ISR

Spain

Ireland

Italy

Greece

REC

MAR

Source : PWC

80 627

75 178

73 210

71 217

66 814

62 361

60 270

59 367

56 297

49 200

49 446

48 450

48 690

47 675

45 387

43 075

37 428

37 455

32 334

29 246

160 311

152 782

151 969

150 901

144 418

137 425

135 334

135 760

133 324

118 490

139 223

120 513

123 005

122 277

172 931

113 750

100 240

101 700

137 296

94 722

631 754

535 507

809 891

540 112

800 139

510 993

489 130

617 906

494 649

494 234

618 310

715 536

718 669

614 411

574 998

449 932

509 614

522 199

582 330

446 083

33