COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/21/EC on compliance with flag State requirements
Date: 2023-06-01
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: International Maritime Organisation, environmental protection, international convention, international standard, law of the sea, maritime safety, maritime shipping, pollution from ships, prevention of pollution, ship's flag

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 1.6.2023  SWD(2023) 165 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/21/EC on compliance with flag State requirements {COM(2023) 272 final} - {SEC(2023) 210 final} - {SWD(2023) 166 final}  
 
 
Table of contents 

1. 

2. 

Introduction: Political and legal context .......................................................................................................................... 1 

Problem definition ........................................................................................................................................................... 7 

2.1. 

2.2. 

2.3. 

What are the problems? .................................................................................................................................... 7 

What are the problem drivers? ........................................................................................................................ 12 

How likely is the problems to persist? ............................................................................................................ 17 

3.  Why should the EU act? ................................................................................................................................................ 19 

3.1. 

3.2. 

3.3. 

Legal Basis ...................................................................................................................................................... 19 

Subsidiarity: Necessity of EU action .............................................................................................................. 19 

Subsidiarity: Added value of EU Action ........................................................................................................ 20 

4.  Objectives: What is to be achieved? .............................................................................................................................. 20 

4.1. 

4.2. 

General Objectives .......................................................................................................................................... 20 

Specific Objectives ......................................................................................................................................... 20 

5.  What are the available options? ..................................................................................................................................... 21 

5.1. 

5.2. 

What is the baseline from which options are assessed? .................................................................................. 21 

Description of the policy measures and policy options ................................................................................... 23 

6.  What are the impacts of the policy options? .................................................................................................................. 30 

6.1. 

Economic impacts ........................................................................................................................................... 30 

6.1.1. 

Impacts on public authorities .......................................................................................................................... 30 

6.1.2. 

Impacts on ship operators ............................................................................................................................... 35 

6.1.3. 

Impacts on SMEs ............................................................................................................................................ 36 

6.1.4.  Digital by default ............................................................................................................................................ 37 

6.1.5. 

Functioning of the internal market and competition ....................................................................................... 37 

6.1.6. 

Impacts on competitiveness ............................................................................................................................ 37 

6.2. 

Social impacts ................................................................................................................................................. 38 

6.2.1.  Maritime safety ............................................................................................................................................... 38 

6.2.2. 

Impacts on working conditions and skills ....................................................................................................... 39 

6.2.3. 

Impacts on fundamental rights ........................................................................................................................ 40 

6.3. 

Environmental impacts ................................................................................................................................... 40 

7.  How do the options compare? ........................................................................................................................................ 41 

7.1. 

7.2. 

7.3. 

7.4. 

Effectiveness ................................................................................................................................................... 41 

Efficiency ........................................................................................................................................................ 43 

Coherence ....................................................................................................................................................... 45 

Subsidiarity and proportionality ..................................................................................................................... 45 

8. 

Preferred option ............................................................................................................................................................. 46 

8.1. 

Identification of the preferred policy option and stakeholders views ............................................................. 46 

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8.2. 

8.3. 

REFIT ............................................................................................................................................................. 47 

Application of the ‘one in, one out’ approach ................................................................................................. 48 

9.  How will actual impacts be monitored and evaluated? .................................................................................................. 48 

Annex 1: Procedural information ........................................................................................................................................... 50 

1.  Lead DG, Decide Planning/CWP references ................................................................................................................. 50 

1.  Organisation and timing ................................................................................................................................................. 50 

2.  Consultation of the RSB ................................................................................................................................................ 50 

3.  Evidence, sources and quality ........................................................................................................................................ 51 

Annex 2: Stakeholder consultation ......................................................................................................................................... 52 

Annex 3: Who is affected and how? ....................................................................................................................................... 66 

1. 

2. 

Practical implications of the initiative ............................................................................................................................ 66 

Summary of costs and benefits ...................................................................................................................................... 68 

3.  Relevant sustainable development goals ........................................................................................................................ 70 

Annex 4: Analytical methods ................................................................................................................................................. 72 

Annex 5: EU/EEA Fleet in numbers ....................................................................................................................................... 97 

Annex 6:  Requirements of the Flag State Directive and of the IMO III-Code ...................................................................... 99 

Annex 7: Links between the ex-post evaluation and the impact assessment ........................................................................ 109 

Annex 8: Conclusions of audits conducted under the IMO Member State Audit Scheme ................................................... 111 

Annex 9: Explanation on the type of ship registries ............................................................................................................. 113 

Annex 10: Flag State delegation to Recognised Organisations ............................................................................................ 115 

Annex 11: Number of exclusive FS inspectors and FS inspections by Member State ......................................................... 116 

Annex 12: Discarded policy measures and options .............................................................................................................. 117 

Annex 14: Other relevant legislation .................................................................................................................................... 130 

Annex 15: Effectiveness of the different policy options ....................................................................................................... 131 

II 

 
 
 
 
Glossary 

Term or acronym 

Meaning or definition 

AID 

Cross-trades 

Accident Investigation Directive (Directive 2009/18/EC establishing the 
fundamental principles governing the investigation of accidents in the maritime 
transport sector)  

Ships sailing under an EU member State flag but never (or seldom) calling at an 
EU Member State port, instead sailing between third country ports in other parts 
of the world 

EMSA 

European Maritime Safety Agency 

FS 

FSI 

FSD 

Flag State 

Flag State Inspection – (Complementary) Inspection, not statutory survey, by the 
flag State not leading to certification. 

Flag State Directive (Directive 2009/21/EC on compliance with flag State 
requirements) 

(IMO) GISIS  

Global Integrated Shipping Information System 

III-Code 

IMO Instruments Implementation Code 

IMO 

IMSAS 

PMoU 

PSC 

PSCO 

International Maritime Organisation 

IMO Member State Audit Scheme 

Paris Memorandum of Understanding 

Port State Control 

Port State Control Officer 

PSC Directive 

Port State Control Directive (Directive 2009/16/EC on port State control) 

QMS 

Quality Management System 

Statutory Survey 

Survey of ship by the flagged ship by a flag State surveyor, or a Recognised 
Organisation surveyor acting on behalf of the flag. Survey leading to 
certification. 

THETIS 

Port State control database (hosted in EMSA) 

RO 

Recognised Organisation 

III 

 
 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

This  Impact  Assessment  accompanies  a  legislative  proposal  for  a  revision  of  Directive  2009/21/EC  on 
compliance with flag State  requirements  (hereinafter  “FSD” or  “FS Directive”)1. The Directive  aims  at 
ensuring that ships flying EU Member States flags meet all safety2 and pollution prevention requirements and 
are  fit  for  service3  and  that  EU  Member  States  correctly,  effectively  and  consistently  discharge  their 
obligations as flag Sates4 

Maritime  transport  is  a  key  sector  for  the  EU  economy  as  it  embodies  the  main  transport  mode  for 
European imports and exports to the rest of the world. Maritime transport is estimated5 to represent around 
80%  of  worldwide  goods  transported  (deep  sea  shipping)  and  around  30%  of  intra-EU  transport  activity 
(short sea shipping). In 2019, 1.9 billion tonnes were transported by short sea shipping to/from the main EU 
ports. In addition, 418 million passengers embarked and disembarked ferries and cruise vessels in EU ports in 
2019. Maritime transport fulfils an important strategic role in safeguarding trade, as demonstrated during the 
COVID-19 pandemic, as well as connectivity of islands, peripheral and remote maritime regions6.  

At the same time, an average of 2,239 marine accidents and incidents were reported per year between 2014 
and 2020 for EU Member States (MS), of which 1,397 marine accidents involving EU Member State flagged 
vessels. In addition, 370 cases of marine pollution have been reported in total during 2014-2020, of which 216 
involving EU Member State flagged vessels7.   

While shipowners based in EU Member States control around 34% of the world’s commercial fleet in terms 
of ownership8, the fleet flagged9 in EU Member States has remained relatively constant at around 14% of the 
world fleet, over the past 7  years. Six EU Member States flags10  account for around 71% of the total EU 
Member State flagged fleet.  

The Sustainable and Smart Mobility Strategy11 (SSMS), adopted in December 2020, announced that the 
Commission was planning to initiate a review of existing legislation on flag State responsibilities, port State 
control and maritime accident investigation. According to the SSMS, the overall objective of this review 
should be to enable safe, secure and efficient maritime transport and further stresses that “safety and security  

1  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32009L0021  
2 When ‘safety’ is referred to in this report, this generally includes safety, security and pollution prevention. 
3 Have all relevant certificates issued by the flag State for the type of ships. 
4 The ‘flag State’ of a vessel is the jurisdiction under whose laws the vessel is registered, it is the nationality of the vessel. 
5 European Commission, The EU Blue Economy Report 2022. 
6 EU Transport in figures, the Statistical Pocketbook 2022, https://ec.europa.eu/transport/media/media-
corner/publications_en  
7 http://www.emsa.europa.eu/newsroom/latest-news/item/4266-annual-overview-of-marine-casualties-and-incidents-
2020.html  
8 The flagged fleet refers to vessels sailing under any of the EU MS flags, while the owned fleet to vessels owned by EU 
companies independently of the flag (EU or non-EU). Source: Statistical pocketbook 2022 (europa.eu) 
9 See Annex 5 for an overview of the EU/EEA flagged fleet in terms of number of ships. These cover seagoing propelled 
merchant ships, but excluding the following: dredgers, mooring vessels, pilot vessels, salvage ships, standby safety vessels, 
accommodation ships, patrol vessels, ice-breakers, effluent carriers, floating production storage and offloading installations, 
production  testing  vessels,  tank  cleaning  vessels,  offshore  construction  vessels,  fish  carriers,  firefighting  vessels,  fishing 
vessels, fishing patrol vessels, trawlers and barges. 
10  In  the  following  order  in  terms  of  number  of  ships  in  2021:  Malta  (23%),  Greece  (11%),  Cyprus  (10%),  Netherlands 
(9%), Portugal (9%) and Italy (8%).  
11 COM(2020) 789 final - Sustainable and Smart Mobility Strategy – putting European transport on track for the future. 

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of the transport system is paramount and should never be compromised and the EU should remain a world 
leader in this field. Continuous efforts with international, national and local authorities,  stakeholders, and 
citizens is key[…]12.” The Strategy sets as one of the milestones that by 2050, the death toll for all modes of 
transport in the EU should be close to zero. The EU policy must secure competitive maritime transport and a 
high-quality  EU  Member  State  flagged  and  controlled  fleet,  ensuring  that  such  services  take  place  at  a 
minimal level of risk for crews, passengers, cargo, vessels, the marine environment and coastal activities. This 
has also been underlined in several Council conclusions, in particular those of 201713 and of 202014. 

In relation to the protection of the marine environment, the initiative indirectly contributes towards delivering 
the zero pollution ambitions of the European Green Deal15, in particular preventing pollution to water (e.g. oil 
spills). It also indirectly contributes towards Sustainable Development Goal (SDG) 3 (“Ensure healthy lives 
and promote well-being for all at all ages”) and SDG 14 (“Conserve and sustainably use the oceans, seas and 
marine resources for sustainable development”). 

International context 

As  shipping  is  fundamentally  global,  maritime  safety  and  marine  environmental  protection  are  regulated 
through a complex international legal framework. The United Nations Convention on the Law of the Sea 
(UNCLOS)16  is  the  international  framework  for  all  marine  and  maritime  activities  and  covers  ocean 
governance, the use of the oceans and the seabed, including maritime transport, in a broad sense. It is the basis 
for  the  formulation  of  detailed  international  rules  and  standards  for  the  design,  equipment,  operation, 
management,  maintenance,  manning  and  disposal  of  ships.  This  is  done  at  international  level  by  the 
International Maritime Organisation (IMO)17. UNCLOS stipulates that a ship can fly only one flag of a 
State and is subject to the exclusive jurisdiction of that flag State which is responsible for its conduct and its 
compliance with safety and environmental protection requirements.  

IMO conventions are binding on all signatory parties once they enter into force. The main international safety 
and pollution prevention conventions are known by their acronyms SOLAS, MARPOL, LL, COLREG, and 
STCW18 to which all EU Member States (MS) are parties. The compliance with these conventions ensures 
that the competitive international maritime transport market is kept level. Shipowners and operators may seek 
to  reduce  their  costs  by  not  complying  with  the  relevant  conventions  and,  therefore,  gain  competitive 
advantage over ship owners which meet the necessary standards. Such ‘substandard’ ships usually choose to 

12 Idem FLAGSHIP 10 – ENHANCING TRANSPORT SAFETY AND SECURITY point 98 and 101. 
13 "Priorities for the EU's maritime transport policy until 2020: Competitiveness, Decarbonisation, Digitalisation to ensure 
global connectivity, an efficient internal market and a world-class maritime cluster" 
14 Council Conclusions on "EU Waterborne Transport Sector  – Future outlook: Towards a carbon-neutral, zero accidents, 
automated and competitive EU Waterborne Transport Sector", 5 June 2020 
15 https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en#documents  
16 UNCLOS was signed in 1982. The European Union ratified in 1984. 
https://www.un.org/Depts/los/convention_agreements/texts/unclos/UNCLOS-TOC.htm 
17 While the jurisdiction and enforcement on board is that of the nation flag, the development of the rules and regulations 
are  done  at  international  level  by  the  International  Maritime  Organization  (www.imo.org).  IMO  is  a  United  Nations 
specialised agency; all EU Member States are IMO members. The European Union is not a member but the Commission 
holds observer status as an Intergovernmental Organisation (IGO) among many other such.  
18  International  Convention  for  the  Safety  of  Life  at  Sea  (SOLAS  74),  International  Convention  for  the  Prevention  of 
Pollution from Ships (MARPOL 73/78), International Convention on Load Lines (LL 66), Convention on the International 
Regulations  for  Preventing  Collisions  at  Sea  (COLREG  72),  Standards  of  Training,  Certification  and  Watchkeeping 
(STCW). 

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fly the flag of States which do not, or do not adequately enforce international safety and pollution prevention 
standards on vessels flying their flag.  

To counter this, the IMO put in place the “IMO Instruments Implementation code” (III-Code) and the IMO 
audit to ensure that States, as parties to the above-mentioned safety and pollution prevention Conventions, 
take all necessary steps to correctly implement them. The III-Code covers flag State responsibilities (as well 
as port and costal State) and is designed to ensure that national authorities have the resources and powers 
needed as a flag State to assume their international obligations and ensure compliance of their flagged ships 
with these rules. When the III-Code entered into force in 2016, the IMO audit scheme, up till then voluntary, 
became mandatory for all IMO parties, including EU Member States. The IMO audit scheme requires IMO 
parties to undergo an audit every 7 years. During these audits it is verified that all IMO States with a register 
implement the III-Code and relevant conventions.  

EU context 

EU  action  in  the  field  of  maritime  safety  both  complements  and  implements  the  international  rules  and 
regulations as defined within IMO. The transposition of IMO rules into the EU legal system makes these legal 
provisions  actionable  before  the  European  Court  of  Justice,  thereby  ensuring  their  uniform  enforcement 
across the Union (the  IMO lacks any legal enforcement powers). The bulk of today’s EU maritime safety 
policy was developed in the early 1990s, and was further worked upon between 2000-2009, in the wake of 
major maritime accidents causing substantial oil spills19 and loss of life20. The overall objective of the EU was 
– and continues to be – a Union policy on safe seas21, and continuous work towards improving safety and 
thereby reducing accidents and pollution into the sea.  

The Directive has the two-fold purpose of enforcing safety rules and preventing pollution as well as making 
sure that Member States comply with their obligations as flag States. The Directive includes rules aiming at a 
certain harmonisation for cases when a ship changes flag and when a ship (under a Member State flag) has 
been detained following a port State control inspection, and it sets forth the requirement for all EU Member 
States to undergo an IMO audit. The Directive also goes over and above what is required at international level 
by  requiring  Member  States  to  have  and  maintain  an  internationally  certified  quality  management  system 
(QMS) for their flag-State related activities. Furthermore, it contains links to a performance measurement of 
the flagged fleet under the Paris Memorandum of Understanding (MoU) on port State control22, which is in 
turn incorporated into EU law though the port State control Directive23. 

It is for each EU Member State as flag State to take all necessary measures, including on board inspection 
and/or survey, to establish that the ship meets all international rules and regulations, as well as regional and/or 
national rules and regulations as the case may be, before issuing the relevant ship certificates, or have them 
issued on their behalf, as proof of the ship’s safety and that the ship is fit to proceed to sea. Such rules and 
regulations  relate  to  safety  construction,  machinery,  stability,  and  collision  avoidance,  as  well  as  pollution 
prevention as laid down in the international conventions to which the State is a contracting party. The surveys 

19 E.g. Aegean Sea in 1992, Spain (74,000 tonnes hydrocarbon), Braer accident in 1993, UK (85,000 tonnes), etc. 
20 E.g. MV Estonia which sank in the Baltic Sea in 1994 claiming 852 lives. 
21 COM (93) 66, Communication from the Commission on ‘A common policy on safe seas’.  
22 Paris Memorandum of Understanding on port State control is an administrative arrangement, whose 27 members (22 EU 
Member  States  with  seaports,  Iceland,  Norway,  the  UK,  Canada  and  the  Russian  Federation)  carry  out  harmonised 
inspections and share port State control data. 
23 Directive 2009/16/EC 

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and certificates are therefore referred to as statutory24. It is for the shipowner to make the ship available for all 
surveys and inspections, and by carrying out all necessary upgrades and repairs, to maintain and have updated 
all statutory certificates which are a prerequisite for the ship to be able to sail25.  

The  international  regime,  as  implemented  also  in  the  EU  maritime  safety  acquis,  allows  a  flag  State  to 
delegate  the  technical  work  to  classification  societies  (non-governmental  organisations  that  establish  and 
maintain technical standards for the construction and operation of ships) to perform these statutory surveys 
required for verification that the ship is fit for purpose, on their behalf. When a classification society acts in 
this way it becomes a Recognised Organisation (RO) for that flag State. The flag State may also allow the RO 
to issue certificates on its behalf. However, the responsibility incumbent on the flag State cannot be delegated. 
There is no obligation to use ROs; it is a choice that any flag State makes depending on the size and type of its 
fleet  and  on  its  own  resources.  Currently  almost  all  EU  Member  States  as  flag  States  have  chosen  to  use 
ROs26 for various technical work. This is permitted and regulated under EU law27 and the Commission has 
listed28 the classification societies the Member States may choose from.  

As the flag State’s responsibilities cannot be delegated away, there is a need, de jure and de facto, for flag 
States to continue to inspect its flagged vessels and monitor the statutory work performed on their behalf by 
ROs. Currently, each flag State has discretion on the scope of flag State inspections, called supplementary 
inspections29, but not on statutory surveys, leading to certification. This is a fundamental safety aspect that 
requires technical resources with adequate expertise, and forming a core part of any maritime administration. 
The  underlying  international  assumption  is  that  all  flag  States  have  resources  and  meet  requirements 
incumbent on them. This however is not always the reality, as also shown by the IMO Audit findings30. When 
a flag State does not allocate the resources needed for inspections, it not only creates a competitive advantage 
for its flagged fleet but also it increases safety and environmental risks. 

Digitalisation and exchange of information 

Since the Directive was adopted in 2009, there have been technological advancements in particular related to 
digitalisation. The Council Conclusions of 202031 acknowledged this and underlined, for future initiatives, 
the need to “[…] through possible relevant legislative amendments, the uptake of digital services, electronic 
certificates for the registration of seagoing ships under EU Member States flags, the electronic verification of 
certificates  for  seagoing  ships  and  seafarers  as  an  option  in  the  context  of  port  State  control  procedures 
[…]”.  This  also  reflects  the  Commission’s  twin  overarching  political  objectives  of  sustainability  and 
digitalisation. 

Some  initiatives  have  been  taken  for  the  exchange  of  information  between  EU  Member  States  and  with 
relevant systems, including EU-wide systems hosted in the European Maritime Safety Agency32 (EMSA), 

24 As required by the Harmonised System for Survey and Certification (HSSC, IMO Resolution A.1140(31), 2019) 
25 It is only with such statutory safety certificates that the ship can get insurance; without insurance the ship can normally 
not sail. 
26 See Annex 10 on the flag States delegations to the ROs.  
27 Regulation (EC) No 391/2009 and Directive 2009/15/EC  
28 Published in the Official Journal – OJ C 466, 7.12.2022, p. 24–24 
29 There are two main types of flag State work/control on board flagged ships: (1) Statutory survey leading to certification 
and, (2) flag State inspection not leading to certification. Flag State inspections are only to be carried out by the flag State. 
30 See Annex 8 
31 Council Conclusions on EU Waterborne Transport Sector, 5 June 2020  
32 EMSA is established by Regulation (EC) No 1406/2002 

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both  as  regards  sharing  e-reports  following  port  State  control  inspections,  inspection  of  roll-on,  roll-off 
passenger ships, and as regards some details of statutory certificates when issued by an RO listed by the EU. 
However, the lack of means for efficient exchange of statutory certificates became very visible during the 
COVID-19  pandemic  as  there  were  no  uniform  or  effective  means  to  e.g.  electronically  check,  facilitate 
temporary extension of relevant certificates, control certificates and even allow for partial remote surveys. 

Synergies with other EU policy instruments33  

The responsibility for maritime safety involves three lines of State intervention both internationally and at EU 
level  (see  Figure  1).  States  have  differing  but  complementary  responsibilities  either  as  a  vessel’s  state  of 
registration, a state which is being visited by a foreign flagged vessel or as a coastal state by which a vessel is 
travelling without calling. The first “line of defence” is provided by the flag State. However, as flag State 
rules only apply to vessels that fly that flag, and as some flags are not willing or able to police their fleets 
many of the IMO's most important technical conventions contain provisions for ships to be inspected when 
the vessels visit foreign ports to ensure that they meet the international requirements. This control by  port 
States is regarded as the second “line of defence”. 

Figure 1:  The flag State, port State and accident investigation responsibilities of EU Member States 

Although both the flag State control and the port State control have worked to improve maritime safety and 
improve the marine environment, accidents can still occur. Once this happens, it is important to investigate 
what went wrong and how a similar accident can be avoided in the future. To achieve this, the third “line of 
defence” of accident investigation was created. 

This impact assessment has been initiated in parallel to the related impact assessments on the revision of the 
port State control Directive and the Accident Investigation Directive. All three EU maritime safety Directives 
are based on the rules and standards established by the IMO at the international level and while they each 
reflect the differing responsibilities of the EU Member States in their various roles as flag, port and coastal 
States  incumbent  on  a  State  under  international  law,  they  have  to  be  coherent  with  each  other  and  any 
proposed  change  to  one  has  to  take  the  other  two  Directives  and  the  broader  international  regulatory 
environment into account. 

33 See also Annex 14 – Other relevant EU legislation 

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The impact assessment of port State control Directive looks at extending the scope of port State control 
(PSC) to  fishing  vessels  which  are  currently  not  covered  and at  updating  the Directive to take  account of 
changes to the international legal and regulatory framework since 2009. It seeks to address issues related to 
the targeting of vessels for inspection, including the use of electronic data and certificates and seeking to make 
PSC  more  vessel  focused.  It  also  looks  at  issues  encountered  by  Member  States’  authorities  in  their 
implementation of the PSC regime. Flag State control and PSC are complementary and the central pillars of 
the EU maritime safety policy. If the flag State is carrying out strict control and oversight of its flagged fleet, 
the likelihood of ships being inspected under PSC and therefore detained after inspection is reduced. Good 
flag state enforcement reduces the ‘burden’ on PSC. In contrast to the flag State control, PSC does not control 
all vessels but rather targets vessels depending on their so called “risk factor”. In essence, the PSC system 
aims to verify that vessels are certified and meet the international requirements, as attested by the statutory 
certificates issued by the flag State, or on its behalf by the RO. The revision of the Accident Investigation 
Directive  explores  how  to  further  enhance  the  way  accident  investigations  are  carried  out;  it  looks  at 
extending the scope to smaller  fishing vessels which are currently not covered. It also seeks to update the 
Directive to take account of changes to the international legal and regulatory framework34 since 2009.  

The need for a measured approach  

The gradual building of the EU maritime safety policy (since 1993) by transposing the international rules has 
taken a deliberately measured approach. The reason being that, if the EU is too strict in advancing rules over 
and  above  the  international  regime,  there  is  a  risk  that  shipowners  consider  this  to  be  a  disadvantage  and 
reflag their vessels to non-EU flags or indeed move their entire business out of the EU. There have however 
been exceptional situations when EU maritime safety rules go beyond international rules, namely when the 
latter are: (i) not precise enough; (ii) not being implemented quickly enough (e.g. double hull tankers35); or 
(iii) in areas where the co-legislators attach particular importance (e.g. passenger ships36). Hence, while it is 
tempting to be stricter where the international rules may not have reached the desired level, any measures at 
EU level  must  be  balanced  with  the possible impact on  the EU  Member State  flagged  fleet  and therefore 
strategic resilience and impacts on trade (avoiding flagging out to non-EU flags). Thus far, the EU maritime 
safety policy and legislation thereon have taken a measured approach.  

Evaluation of the Directive 

The 2018 ex-post evaluation37 and the Maritime Transport Fitness Check38 concluded that the added value of 
EU action lies in the harmonised implementation and enforcement of international rules into and under EU 
legislation,  as  well  as  requiring  and  encouraging  cooperation  among  Member  States.  The  evaluation 
demonstrated  the key  role  that  the flag State  Directive  plays  in  providing  for  a  high  and  uniform level of 
safety and a level playing field between Member States, which in turns contributes to achieving safe, secure 
and sustainable maritime transport.  

34  The  Accident  Investigation  Directive  (AID)  is  relevant  as  internationally  accident  investigation  is  falling  within  the 
sphere of flag State tasks. It is therefore included in the III-Code, but the EU maritime safety legislation goes further than 
the  international  rules  and  while  based  on  them,  include  the  requirement  that  such  accident  investigation  bodies  are 
independent (also from flag State administrations). 
35 An oil tank ship with double bottom and double side hulls. 
36 Given its many islands the passenger ship and roll-on, roll-off passenger ships segment is big in the EU and the safety 
level is expected by an EU citizen to be the same wherever they board a passenger ship.  
37 SWD (2018) 232 final 
38 SWD (2018) 228 final    

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The Fitness Check however highlighted the need for a broader rebalancing of EU maritime safety policy. This 
means above all reinforcing the EU layer for the “first line of  defence”, compliance and preventive action 
which befalls on flag States. The evaluation concluded that current policies focus on Member States as port 
and coastal States, and less so on flag States. The Fitness Check concluded that what is missing within the 
FSD  are  the flag State  relevant parts of the mandatory  III-Code.  The  results  of the ex-post  evaluation  are 
reflected in this impact assessment as summarised in Annex 7. 

2.  PROBLEM DEFINITION 

The underlying problems, problem drivers and implications that are relevant for the revision of the Directive 
are presented in Figure 2. 

Figure 2: Problem tree 

2.1. 

 What are the problems? 

The  responsibility  for  compliance  with  maritime  safety  standards  lies,  as  a  preventive  action,  in  the  first 
instance, with the flag State. The duty of the flag State is to enforce standards by a regime of regular surveys 
and  certification.  A  port  State  may  require  ships  registered  with  other  flag  States  to  rectify  deficiencies 
revealed during PSC inspections and may even detain ships in port if necessary, but port State controls do not 
substitute for flag State inspections since the responsibility for substandard ships remains with the shipowner, 
under the control of its flag State. Finally, accident investigations by establishing the root cause in order to 
prevent future accidents of a similar nature.  

It  is  difficult  to  directly  link  individual  parts  of  the  safety  chain  of  the  different  ‘lines  of  defence’  to 
quantifiable improvements in safety and environmental protection. However what can be seen is that over the 
last decade the average deficiency and detention rates for ships calling to EU ports and subject to port State 
control  has  diminished  (Figure3).  Similarly,  there  has  not  been  a  significant  oil  pollution  incident  in  EU 
waters for over 20 years. This may be due to an overall improvement in ship quality but it is also due to the 
clear message  conveyed to shipowners that it is not worth the  risk to  operate  substandard shipping in EU 

7 

  PROBLEM DRIVERSPROBLEMSFINAL CONSEQUENCEIMPLICATIONSLegal uncertainty on theimplementation of new international mandatory rules at EU levelRisk of non-enforcement of new international rulesLack of harmonised approach to inspections, control, monitoring and information sharing of flagged fleetPressure on Port State controlLack of harmonised  responsein crisis situationsMissed opportunities brought by digitalisationRisk for maritime safety (pollution and casualties)Risk of fragmentation of internal market 
 
 
waters. The result is an indication that the EU and its Member States attaches great importance to maritime 
safety and enforcement of the rules agreed upon at IMO. 

That absence of quantifiable improvements is however not evidence that there is not a problem and there is  
no room for complacency. The prerequisites to actually control and maintain compliance of ships flying the 
flag are monitoring and inspections. There is no way around it. Flag State inspections needs to be performed 
as  a  complement  to  surveys  for  the  dual  purpose  of  ensuring  the  ship  is  fit  and  continuously  reflect  the 
certificates issued and, for monitoring directly on the sport the work performed by RO’s on behalf of the flag 
State. A major accident can have devastating consequences. 

Problem 1: Legal uncertainty on the implementation of new international mandatory rules at EU level 

As explained in section 1, the IMO Instruments Implementation code (III-Code) and the IMO audit are the 
means to ensure that States, as parties to the Conventions, put all means in place to implement them. The III-
Code  covers  flag  State  responsibilities  (as  well  as  port  and  costal  State),  including  the  IMO  audit,  and  is 
designed to ensure that national authorities have the resources and powers needed as flag States to assume 
their international obligations and ensure compliance of their flagged ships with these rules.  

However, the III-Code is not fully reflected in the flag State Directive and thus not all of its provisions are 
incorporated or fully incorporated into Union law39 (see section 2.2 and Annex 6 for a detailed assessment). 
This was also pointed out in the 2018 ex-post evaluation (see Annex 7). Therefore, EU Member States as flag 
States are faced with a fragmented set of rules, resulting in legal uncertainty on the implementation of new 
international mandatory rules at EU level and a risk of non-enforcement. Unilateral action by Member States 
would deprive the Directive of its coordinating and harmonising effect, leading to distortions in the internal 
market. In principle, any merchant ship can sail anywhere in the world and change flag with little impediment 
(due  to  the  cross-border  dimension  of  the  sector).  The  full  benefits  on  maritime  safety  and  pollution 
prevention in the EU (as well as internationally), can be derived only if all Member States achieve full and 
effective implementation of all instruments. Stakeholders consulted, both industry and public administrations 
- in particular the 17 EU flag State administrations interviewed during the stakeholders’ consultation - agreed 
to the need for full alignment with the new international mandatory rules in the flag State Directive, as these 
are already mandatory for them.  

The  IMO  Audit  has  also  become  mandatory  under the  III-Code  since the  adoption  of  the  FSD,  while  the 
current corresponding provision in the FSD (Article 7) requiring Member States to undergo the then voluntary 
IMO audit, ceased to be applicable. However, experience with the implementation of the Directive has shown 
that there is a need to maintain the requirement in  EU law in order to ensure applicability, uniformity and 
enforcement. The need to mandatorily undergo the IMO audit was repeatedly raised by the Commission with 
some ‘reluctant’ Member States (7 Member States) in the context of various fora for discussions of maritime 
safety issues, including in particular the Committee of Safe Seas. In the discussions in IMO on the planning 
and scheduling of such Audits, the Commission has also encouraged Member States to sign up as early as 
possible. The Commission had to initiate one formal infringement procedure against one Member State for 
not having accepted a date for undergoing the IMO audit in time40. The transposition of IMO rules into the 

39 At the time of adopting the Directive in 2009, a statement (Council Doc no - 15859/08 ADD 1) was made by the Member 
State “pledging” to follow the III-code (which was still being finalised at the time). Member States agreed to be bound by 
international  conventions  imposing  obligations  on  flag  States  and  to  apply  the  IMO  code  on  the  implementation  of  its 
mandatory instruments, designed to ensure that national authorities have the resources and powers needed as a flag State to 
assume their international obligations, before incorporating under EU-law. 
40 This case was closed at the stage of letter of formal notice. 

8 

 
 
                                                           
EU  legal  system  makes  these  legal  provisions  actionable  before  the  European  Court  of  Justice,  thereby 
ensuring their uniform enforcement across the Union. As illustrated by the case referred to, there is a need to 
keep this requirement mandatory under EU law so that indeed it can be enforced when necessary. If an EU 
Member State as flag State does not undergo the audit, although now mandatory under the IMO rules, nothing 
really happens as IMO has no enforcement powers. 

Furthermore, the IMO Audit procedures do not require the audited State to make the results (i.e. the audit 
report and/or corrective actions) available to its peers or to the public. The experience of the Commission with 
the implementation of the Directive has shown that there is a need to maintain also that requirement in EU 
law in order to ensure applicability, uniformity and enforcement as well as a certain transparency as regards 
the need to make audit reports (including corrective action(s)) available to “peers”, showing the commitment 
to  continuous  improvement  and  quality  shipping.  Like  most  audit  work,  the  IMO  audit  forms  part  of 
preventive actions, and for some EU flag States, while not required, this is publicly used as a sign of quality to 
attract quality minded owners.  As transparency is a very important tool in maritime safety, this forms part of 
the reasons for maintaining the mandatory requirements in the flag State Directive. 

In the consultations, in particular the consultation meeting organised in November 2021 with all EU Member 
States Maritime Directors and at the stakeholders’ workshop organised in January 2022, all agreed that there 
is  incoherence  between  the  now  mandatory  IMO  audit  and  the  sunset  clause  in  the  Directive  (Article  7). 
Neither Member States nor industry representatives questioned the need to fully incorporate and align with 
the III-Code and to retain the reference to and the requirement for undergoing the IMO Audit. EMSA assists 
the Commission in its tasks, as guardian of the Treaties, to monitor the implementation of the maritime safety 
acquis by the EU Member States, and for this purpose organises visits to the Member States under an agreed 
visits programme. However, there is a problem where those visits and the IMO audit are not synchronised 
potentially leading to conflicting findings and therefore risk of legal uncertainty for the auditee Member State. 
So far, only 3 EU Member States have invited the participation of the Commission/EMSA during an IMO 
audit.  

non-complementarity between the visits to Member States and the IMO Audits; 
duplication of areas for visits/audits and thereby also missing opportunities for efficiency and focus of   

As the FS Directive implement the international rules agreed by the same EU Member States as flag States in 
IMO, there is a need to avoid: 
- 
- 
both visits/audits; 
- 
a potential situation of conflicting findings for the audited State, causing confusion and thereby legal 
uncertainly as that State risks not knowing what to do to take corrective action to satisfy the IMO audit and at 
the same time be in compliance with the EU legislation; 
- 

that either IMO or EU are not fully aware of the audit report and/or corrective actions. 

A synchronised approach41 in addition has the potential to further improve the analysis identifying areas for 
further improvement, as part of the preventive action both in IMO and in the EU. 

In the consultations, only one Member State raised concerns and could not see the added value for the flag 
State.  

41  This has been informally discussed with the IMO Staff carrying out audits. 

9 

 
 
 
 
 
 
 
                                                           
Problem  2:  Lack  of  harmonised  approach  to  inspections,  control,  monitoring  and  information  sharing  of 
flagged fleet  

The  second  problem  relates  to  the  discrepancies  in  the  approach  to  inspections,  control,  monitoring  and 
information sharing of flagged fleet among different States. EU action in the field of maritime safety both 
complements and implements the international framework as defined within IMO. However, certain aspects 
in the IMO III-Code are either not specific enough and/or leaving too much room for discretion for Member 
States  application.  In  addition,  insufficient  technical  and  operational  capacity  has  negative  consequences 
regarding  the  operational  capability  to  perform  flag  State  inspections  and  monitoring  of  the  work  of  ROs 
performed on behalf of the flag State, in a harmonised way across the EU. 

The  analysis  and  conclusions  of  IMO  audits  performed  (see  Annex  8),  both  under  the  voluntary  and 
mandatory  schemes,  revealed  that  among  the  most  frequent  factors  contributing  to  the  lack  of  effective 
implementation of international instruments are: insufficient human and financial resources; lack of technical 
capability (trained personnel, hardware/equipment); lack of management system; and, insufficient capacity to 
have a purposeful monitoring/oversight over fleet and ROs. While these findings cover more States than the 
EU Member States, they are indicative of the more generally observed issues with the III-Code and therefore 
also indicative of areas where certain level of harmonisation at EU level is needed. 

During the consultation process, the stakeholders’ interviews have confirmed that inadequate technical and 
operational capacity is a significant issue when it comes to the adequate implementation of international and 
EU legislation and monitoring of ROs. Additionally and directly linked to this, the capability and availability 
of relevant technical staff as well as their training and capacity building is a consequent key issue for EU flag 
States,  as  also  acknowledged  during  the  stakeholders’  consultation.  The  level  of  training  and  capacity 
building for flag State inspectors, once they have qualified according to their national education schemes, is 
an important factor affecting their performance.  

Furthermore, the III-Code includes requirements on the individual flags to measure their performance42, but it 
is not specific, only giving a non-exhaustive list of example areas. The individual performance measurement 
of the flag States vary. The current measurement of performance of flags in the EU43 is based on the publicly 
available Paris MoU White/Grey/Black lists44. If a flag State has good control of its fleet (via inspections and 
monitoring) the vessels flying its flag are likely to have less detentions. Figure 3 shows the trend for each 
Member State between 2012 and 2020, where the lower the ranking number of a Member State, the better its 
performance is.  

Where EU Member States as flag States fall into the Paris MoU Grey or Black45 lists they are required to 
make an analysis of the main reasons for the lack of compliance and to take corrective action, informing the 
Commission of the steps taken. However, this single criterion can only offer a ‘sample’ of the situation and is 
today not sufficiently refined, because: (1) following a decision in the Paris MoU the method used to calculate 

42  Part  2  point  42  and  43  –  ‘…evaluate  its  performance  with  respect  to  the  implementation  of  administrative  processes, 
procedures and resources necessary to meet its obligations…’. 
43 The requirement in the Directive regarding the measurement of flag State fleet performance is provided in Article 8(2). 
This is a requirement which has been in force since 2009. 
44  Source:  https://www.parismou.org/detentions-banning/white-grey-and-black-list.  White  listing  means  overall  good 
performance of the flagged fleet. Grey listing means attention is needed to improve. Black listing means poor performance 
and risky (in terms of safety) ships. 
45  For  2021 
https://www.parismou.org/detentions-banning/white-grey-and-black-list  

there  was  one  MS  on 

list  and  none  on 

the  Paris  MoU 

the  Black 

the  Grey 

list  of 

10 

 
 
 
                                                           
the flag lists is changing (to take better account of the sample size); and (2) it only looks at the flagged fleet 
performance  and  does  not  include  any  performance  criteria  related  to  the  flag  State  administrations.  This 
single  and  somewhat  ‘blunt’  performance  criterion  also  only  looks  at  ex-post  non-compliance,  rather  than 
being pro-active and based on risk-assessment/profiling and only for one PSC area, the Paris MoU, among 
several in the world. It is also not aligned with the more elaborated performance criteria suggested in the III-
Code.  Furthermore,  the  current  framework  does  not  sufficiently  support  the  administrations  in  identifying 
weaknesses in their control and monitoring systems, including to determine whether staffing, resources and 
procedures are adequate to meet their flag State obligations. Consequently, a sound maritime safety, security 
and  pollution  prevention  culture  is  not  sufficiently  promoted  or  rewarded.  In  the  stakeholders’  targeted 
consultation46  it  was  confirmed  that  this  is  indeed  an  issue  and  that,  while  detentions  of  ships  under  PSC 
should be retained as a criterion, it should not be the only one. 

Figure 3: Paris Memorandum of Understanding rankings of EU Member States between 2012 and 2020 

60

50

40

30

20

10

0

BE HR CY DK EE

FI

FR DE GR IE

IT

LV LT LU MT NL PL

PT

ES

SE

2012

2014

2016

2018

2020

Source: VVA, WMU and Admaris (2023), Impact assessment support study; Note: The vertical axis indicates the number of 
PSC detentions 

The  final  consequence  of  the  problems  discussed  above  relates  to  risks  for  maritime safety  (pollution  and 
casualties).  This  should  however  be  seen  in  the  broader  context  of  the  flag  State,  PSC  and  accident 
investigation responsibilities for ensuring maritime safety and the protection of the marine environment.  

During 2014-2020, an average of 2,239 marine casualties and incidents were reported per year for EU flagged 
and non-EU flagged vessels. For EU flagged vessels, 1,397 marine casualties and incidents were reported per 
year on average (around 62% of the total), showing a relatively stable evolution over time (see Figure 4, left-
hand side). Very serious47 and serious casualties48 together represented around 17% of the marine casualties 
and  incidents,  resulting  in  an  average  of  23  fatalities  and  143  injuries  per  year49.  A  total  of  370  cases  of 
marine pollution have been reported during 2014-2020 for EU flagged and non-EU flagged vessels, of which 
216  cases  involved  EU  flagged  vessels.  Marine  pollution  in  the  form  of  ship  bunkers  (fuel)  and  other 

46 Dedicated Stakeholders’ workshop with Member States and industry, organised on 21 October 2021. 
47 As defined by the IMO Code for the Investigation of Marine Casualties and Incidents – in effect loss of a ship, death or 
severe damage to environment - referred to in Article 3(2)(b) of Directive 2009/18/EC on maritime accident investigation. 
48 As defined by the IMO  – in effect a fire, explosion, collision, grounding, contact, heavy weather damage, ice damage, 
hull  cracking,  or  suspected  hull  defect,  etc.  referred  to  in  Article  3(3)  of  Directive  2009/8/EC  on  maritime  accident 
investigation 
49 European Maritime Safety Agency (2021), Annual overview of marine casualties and incidents 2021. EU flags only. 

11 

 
 
                                                           
pollutants (e.g. cargo residues, lubricating or hydraulic oils) represented 68% and 19%, respectively, of the 
total number of cases of pollution for EU flagged vessels (Figure 4, right-hand side)50. 

Figure 4: Number of reported marine casualties and incidents by type (left-hand side) and cases of marine pollution 
by type (right-hand side) for EU flagged vessels 

Source: European Maritime Safety Agency (2021) 

2.2.  What are the problem drivers? 

Problem Driver 1 – EU legislation reflects the new international mandatory rules in a fragmented manner 

This problem  driver  relates  to problem 1. Current  EU legislation reflects the  new international mandatory 
rules in a fragmented manner. Since Directive 2009/21/EC entered into force, the international environment 
has  changed.  In  2013,  at  the  time  of  the  IMO  adopting  the  III-Code,  the  Council  on  a  proposal  of  the 
Commission adopted Council Decision 2013/268/EU51 setting out the Union position that had to be followed 
by Member States in IMO. This means that the III-Code is considered to be part of Union law52. Following 
Council  Decision  2013/268/EU,  EU Member States  as  IMO members  and  contracting  parties to  the  IMO 
instruments are required to “use the provisions of the III-Code for implementation in the execution of their 
obligations and responsibilities” and are “subject to periodic audits by the IMO in accordance with the III-
Code to verify compliance with and implementation”. 

The IMO III-Code entered into force worldwide and therefore became mandatory on 1 January 2016, but the 
relevant parts for flag States of the Code are not fully reflected in the flag State Directive. Parts 1 and 2 of the 
III-Code are particularly relevant for the flag States. Some sections of parts 1 and 2 are already covered in full 
(i.e. records, improvement, delegation of authority, flag State investigations) or in part by EU legislation (e.g. 
objectives,  improvement,  implementation)  and  others  need  to  be  introduced  (i.e.  enforcement,  flag  State 
surveyors). Parts 3 and 4 of the III-Code are covered in EU legislation via the VTMIS Directive53 and the port 
State control Directive. In addition, the IMO code for Recognised Organizations (RO code) is also relevant  

50 European Maritime Safety Agency (2021), Annual overview of marine casualties and incidents 2021. 
51 OJ l. 155/3, 7.6.2013, Council Decision of 13 May 2013 on the position to be taken on behalf of the European Union 
within the International maritime Organisation (IMO) with regard to the adoption of certain Codes and related amendments 
to certain conventions and protocols. 
52 As soon as the Union has adopted acts, like decisions under article 218(9) TFEU backing them, they become part of the 
Union acquis. 
53 Directive 2002/59/EC 

12 

010020030040050060070080090010002014201520162017201820192020Very seriousSeriousLess SeriousMarine incident051015202530352014201520162017201820192020Pollution bunkersPollution cargoRelease of pollutants in the air 
 
                                                           
for Recognised Organizations (RO code) is also relevant for flag State and has been incorporated into EU 
law through an Implementing Regulation and Directive54 in order to avoid conflict between EU rules and 
mandatory international rules55. While the Implementing Regulation and Directive ensure furtherance of the 
IMO  RO  code,  they  also  cover  certain  parts  of  the  III-Code.  This  illustrates  that  the  III-Code  is  already 
partially  incorporated  into  EU  law  but  shows  at  the  same  time  the  fragmented  manner  in  which  the 
international  rules  are  reflected  in  EU  law,  leading  to  legal  uncertainty.  Annex  6  provides  a  detailed 
assessment of how the III-Code is already reflected in EU legislation. 

During stakeholders’ consultation, as explained in section 2.1, the industry and the EU Member States (17 EU 
flag State administrations interviewed) agreed with the need for full alignment of the flag State Directive to 
the  new  international  mandatory  rules.  This  was  also  confirmed  in  a  stakeholder  workshop  organised  in 
January 2022. 

Problem Driver 2 - Inspection levels and oversight not consistent between Member States 

This  problem  driver  relates  to  problem  2.  Flag  State  requirements  concern  all  necessary  inspections, 
surveys56, audits and checks of any ship that wishes to enter an EU Member State register of ships and fly its 
flag. A survey of the ship - whether a newly built or ship in operation - is a pre-requisite to ensure the ship is 
fit for purpose and meets all statutory international conventions, as well as possible relevant national and/or 
EU requirements. This survey, if positive, results in the flag State issuing the relevant certificates for the ship 
in question. That in turn enables the ship to acquire an insurance and to start sailing. 

There is no homogeneity among Member States in the organisational setup of their flag State administrations. 
Some Member States have flag State responsibilities executed by a coast guard, normally forming part of a 
military  (navy)  or  police  structure.  Others  follow  different  approaches,  retaining  a  minimum  flag  State 
administration while outsourcing most technical work. Then, there are those administrations (e.g. IT, FR, ES) 
that have a setup with sufficient in-house technical staff available for flag State duties. To further complicate 
the picture, the organisation and setup also much depends on the size and type of fleet flying the respective 
flag which ranges from just a few dozen to close to 1,900 vessels. 

Almost all Member States have to some extent or in full delegated the statutory survey work to ROs that may 
also issue the relevant statutory certificates on their behalf (see  Annex 10  for an overview of the statutory 
work delegated away). The effect is that the retained resources within the national flag State administrations 
have been reduced over time. At the same time, as the responsibility cannot be delegated away, there is a need 
for a flag State to continue to inspect its flagged vessels and monitor the statutory work performed on their 
behalf by ROs. Flag States are required to have a purposeful oversight programme over their fleet by carrying 
out  flag  State  inspections  in  accordance  with  the  III-Code.  Such  oversight  is  ensured  by  undertaking 
inspections of ships and forms one part of the monitoring of ROs together with the other important part - that 
the  RO  acts  in  accordance  with  the  bilateral  agreement  between  the  flag  State  and  the  RO  e.g.  national 

54  Commission  Implementing  Regulation  No  1355/2014  and  Implementing  Directive  2014/111/EU  amending  Regulation 
(EC) No 391/2009 and Directive 2009/15/EC respectively (on common rules and standards for ship inspection and survey 
organisations and for the relevant activities of maritime administrations) and excludes from implementation by MS certain 
parts of the RO and III-code by means of EU law. 
55  Article  5(1)  of  Regulation  (EC)  No  2099/2002  (COSS  Regulation)  require  Member  States  and  the  Commission  to 
cooperate in order to define, as appropriate, a common position or approach in the common international fora with a view to 
reducing the risk of conflict between the maritime legislation of the Union and international instruments. 
56  See  section  1  and  footnote  27  for  an  explanation  of  the  difference  between  surveys,  leading  to  certification,  and 
inspections, not leading to certification. 

13 

 
 
                                                           
requirements.  However,  there  is  no  systematic  or  harmonised  way  in  the  EU  for  sharing  such  relevant 
monitoring information or the possibility of pooling resources for an effective oversight programme. Due to 
the  lack  of  technical  and  operational  capacity,  the  possibility  to  uphold  and  perform  the  obligations  and 
responsibilities incumbent upon them under international law in relation to their flagged fleet has become an 
issue for the flag State administrations.  

This  issue  is  directly  supported  by  the  inspections  and  assessments  of  classification  societies  by  the 
Commission with the support of EMSA. In the context of the EU RO legislation, it has been established that 
one  of  the  weak  points  in  the  EU  regime  is  the  inadequate  oversight  of  the  RO  by  the  flag  States.  The 
assessments as well as EMSA’s horizontal analysis, generally point to weaknesses in the way EU flag States 
purposefully monitor and control the ROs that work on their behalf. This is also one of the key findings of the 
analysis of a large number of IMO audits (c.f. Annex 8). 

As pointed out above today many EU Member States have delegated technical statutory survey work to RO’s 
(and in many cases also the issuance of statutory certificates) acting on their behalf. This shows the magnitude 
of  the  issue  and  the  widespread  problem  of  adequate  and  purposeful  monitoring.  As  the  flag  State’s 
responsibilities cannot be delegated away flag States need to inspect their flagged vessels for acquiring direct 
knowledge of their quality of the statutory work performed on their behalf by their ROs. This need is also 
inferred  from  follow-up  reports  in  accordance  to  Article  8.2  of  the  FS  Directive.  Member  States  finding 
themselves  on  the  Paris  MoU  grey  list  (showing  a  worsening  flag  performance)  has  to  do  a  root-cause 
analysis  and  identify  corrective  actions  for  improvement  of  performance.  In  such  reporting  it  was  clearly 
identified as a systemic issue that the monitoring and communication with ROs was part of the worsening 
performance causing vessels’ detentions and grey listing.  

16  of  the  18  Member  States    that  provided  feedback  on  this  point  during  the  stakeholders’  consultation 
(Annex  2    and  Figure  11),  agreed  on  the  need  to  introduce  specific  requirements  for  more  purposeful 
monitoring of recognised organisations (ROs), while one Member State was neutral and one disagreed on 
such a need. 

The feedback provided by the flag State administrations  during the targeted consultation indicates that the 
limited  technical  and  operational  capacity  poses  problems  both  for  inspections  and  monitoring  ROs  and 
survey  work  carried  out  on  their  behalf,  and  thus  also  affects  their  performance.  Concerns  about  staff 
shortages were mostly identified for the category flag State surveyors/inspectors/auditors.  

The  inspection  level  varies  among  flag  State  administrations.  Data  provided  by  22  Member  States  in  the 
context of the impact assessment process shows that the number of inspections range from 0 to 896 among 
the EU Member States (for an overview see Annex 11). On average, 24.1% of EU Member States fleet was 
inspected in 2021. 13 flag State administrations inspected less than 24% of their flagged fleet57, and 7 of them 
below 10% of their flagged fleet58.  

Controlling the flagged fleet includes the requirement of taking appropriate measures59 to ensure the ship is fit 
to  proceed  to  sea.  Such  measures  may  include  an  on-board  flag  State  inspection  prior  to  registration,  as 
required  by  national  legislation.  Stakeholders’  consultation  however  showed  that  there  are  differences 

57 BE (22%), DK (24%), DE (1%), EE (0%), EL (17%), FR (20%), HR (5%), IT (6%), NL (12%), PT (0%), RO (0%), FI 
(5%) and SE (20%).   
58 DE (1%), EE (0%), HR (5%), IT (6%), PT (0%), RO (0%), FI (5%). 
59 FSD Article 4.1 ‘ …measures it deems appropriate…’  

14 

 
 
                                                           
between Member States in performing such inspections and diverging national requirements. 11 out of 17 flag 
State  administrations  that  responded  to  this  question  carry  out  both  paper  certification  and  on-board 
inspections  before  registering  a  ship  under  their  flag,  while  6  solely  apply  paper  (certificate)  based 
inspections. This translates into an inconsistent inspection level, ultimately leading to less control and risk to 
safety as well as creating a possible distortion on the market. Furthermore, each flag State has discretion on 
the scope  of inspections  and  on  how to  carry  out  flag State  inspections  not leading to  certification  (called 
supplementary inspections). The III-Code does not give any details either as to the number, timing or scope of 
such supplementary inspections. 

There is also lack of clarity on the possibility of using technical personnel that is not directly and exclusively 
employed  as  inspector  (non-exclusive  inspector  or  similar)  by  the  flag  State  administrations  for 
inspections/technical work. These staff are not regulated as to their use, scope of work and qualifications, as 
they are not directly employed by flag State administrations, and not included in the training programmes or 
subject  to  reporting  requirements.  Currently,  Malta,  Cyprus  and  Luxembourg  make  use  of  non-exclusive 
inspectors60.  

Using non-exclusive inspectors can be a less expensive option. In particular, Malta and Cyprus are among the 
world’s biggest flag States and have many ships engaged in sailing on routes between two or more non-EU 
ports in a different part of the world (called cross-trades) and never or seldom in the vicinity of the flag State 
or the Union. About 20%61 of the EU member State flagged fleet is engaged in such trade. It is expensive for 
those  flag  States  to  have  exclusive  inspectors  available  all  over  the  world  or  to  fly  personnel  all  over  the 
world. It is therefore a cost saving issue to use non-exclusive inspectors on the spot, on an ad hoc basis, when 
required.  For  Luxembourg,  an  additional  consideration  is  that  the  country  is  landlocked  and  it  therefore 
cannot possibly have personnel in ports that can be also used for other activities (for example, as port State 
control officers who inspect foreign flagged ships). 

The concern with the practice of using non-exclusive staff is that it is less controlled in terms  of technical 
competencies,  quality  of  work  and  reporting,  in  addition  to  the  risk  of  conflict  of  interest.  As  the  non-
exclusive inspectors are not full time employees, they typically work for other entities.  

An  analysis of  public  flag performance  data  shows  a trend  for  quality  problems  with  using non-exclusive 
inspectors. Vessels flying Luxembourg flag are on (2022 data) the grey list of the Tokyo MoU (the regional 
organisation  for  port  State  control  in  the  Asia-Pacific  region),  meaning  they  are  not  performing  to  an 
appropriate quality standard. The same goes for Cyprus flag  – while on the white list of the Tokyo MoU, 
Cyprus is in the bottom end of the white list. For the Paris MoU, Luxembourg flag, while on the white list, is 
in the bottom end of the list. Generally, there is indication that action needs to be taken to avoid that the two 
flags slip further into the grey list. 

This problem driver also entails a lack of systematic exchange and information sharing between flag States, 
and especially if non-exclusive inspectors are not required to report in the same way as exclusive surveyors, 
supporting  the  efficiency  of  their  inspection/monitoring  and  oversight  task  as  well  as  fostering  a  common 
understanding in how to address issues encountered in a more EU-harmonised way e.g. comparing findings 

60 Cyprus reported the use 6 non-exclusive inspectors (13% of the total number of inspectors), Malta 77 (78% of the total 
number of inspectors), and Luxembourg relies entirely on non-exclusive technical staff (see Annex 4, and Annex 11). 
61 Out of the 8091 currently EU flagged ships (excluding tugs, dredgers, fishing vessels and others smaller tonnage) 1477 
have not called at all in EU ports in 2021 or 2022. 

15 

 
 
                                                           
or  deficiencies  identified  during  flag  State  inspections  indicating  a  systemic  problem  across  ship  types  or 
fleets. 

Problem Driver 3 - Cumbersome paper-based certification system 

Flag States are obliged to maintain a register of ships to ensure recordkeeping and information concerning 
ships flying their flag (register of ships). Most registers are kept, in full or in part, in non-electronic format 
(paper  files,  certificates  and  registry  books).  This  translates  into  paperwork,  inefficiency,  errors,  a  lack  of 
transparency and lack of harmonisation. 

The Directive does not specify in what form or standard a flag register should be kept. As such, flag registers 
do not meet modern (service and technological) digitalisation demands of both efficiency and transparency 
given  IT  and  interoperability  solutions  available.  Consequently,  there  is  no  uniform  requirement  for  the 
sharing of (a) statutory certificates in electronic format and (b) flag State inspection reports in digital format 
between flag State administrations. Only six flag State administrations have implemented statutory certificates 
in electronic format (BE, CY, DK, DE, FI, PT) and one (MT) is in the process of implementing them. This 
does not  enable  the  preparation for  flag or  PSC inspections in  an  efficient  way  and  enhanced  cooperation 
based on sharing information among EU maritime administrations.  Consequently, the possibilities to reap 
benefits in terms of efficiency improvements for the flag State administrations and for shipowners/operators, 
but  also  for  PSC  authorities  are  limited.  This  also  results  in  reduced  capability  (and  delay)  to  respond  to 
emergency or force majeure situations, with the COVID-19 pandemic being the most recent example.  

During  stakeholders’  interviews,  when  asked  whether  they  considered  their  flag  State  administration 
sufficiently digitalised, 11 administrations were neutral, 4 considered that they are not sufficiently digitalised 
and only 2 found their administrations to be properly digitalised. 

Problem Driver 4 - Insufficient cooperation between relevant national authorities (including procedures not 
appropriate for crisis situations) 

The insufficient cooperation between Member States authorities is linked to the fact that there is no dedicated 
fora at EU-level for discussing flag State issues. This type of forum already exists in the form of Member 
States  Expert  Groups,  to  discuss  coastal  and  port  State  matters,  where  discussions  aim  at  harmonised 
procedures and at creating a level playing field among Member States. Flag State issues have so far been 
discussed more on an ad hoc basis, in the context of the overall Committee of Safe Seas62 (COSS) established 
to deal in a consolidated way with comitology decisions in the field of maritime safety. There is no forum 
discussing  or  encouraging exchange  between flag States  (and  inspectors)  for  issues  related  to oversight of 
fleet and RO’s, training needs, IMO audit preparations and results etc. There is also no systematic way of 
sharing relevant information.  

During the COVID-19 pandemic, flag State administrations have dealt with questions related to renewal of 
certificates,  statutory  surveys,  crew  changes,  and  other  flag  related  issues  on  their  own  (as  a  flag  State 
prerogative). However, lack of harmonisation in Member States responses was evident. The lack of digital 
solutions enabling better information sharing and exchange between Member States further contributed to this 

62  Regulation  (EC)  No  2099/2002  of  the  European  Parliament  and  of  the  Council  of  5  November  2002  establishing  a 
Committee on Safe Seas and the Prevention of Pollution from Ships (COSS) and amending the Regulations on  maritime 
safety and the prevention of pollution from ships OJ L 324, 29.11.2002, p. 1 

16 

 
 
                                                           
problem driver and showed that current procedures and information exchange is not appropriate for handling 
a crisis situation efficiently. 

Problem Driver 5 - Insufficient capacity building/flag State training (post qualification) 

While the III-Code requires that flag States ensure the training and oversight of the activities of staff involved 
with flag State monitoring and, should implement a documented system for qualification of personnel and for 
continuous updating of their knowledge, it does not specify how. This can lead to very different training and 
capacity building, with the risk of performing flag State inspections in a non-harmonised way63 in the EU. 

In  addition,  international  rules  are  continuously  developed  and  updated  in  IMO,  resulting  in  the  need  for 
updated knowledge. Many Member States are confronted with the challenge of finding the right experts to 
provide training or to ensure a more common understanding and interpretation of technical aspects. During 
the targeted consultation, Member States emphasized the need for training inspectors (post qualification), both 
as an important factor affecting performance and as one of the barriers to sustainable safety. They have also 
pointed to difficulties at national level to arrange for such training in a way that is harmonised across the EU. 
At the same time, they referred to the positive experience with such training and capacity building for PSC 
officers since 2004, provided at Union level by EMSA. For flag State inspectors, EMSA provided the first 
voluntary such training in 2020. 

Maritime safety is a very niche subject not widely offered at academic institutions. Developing training of 
flag  State  inspectors  would  require  access  to  a  large  pool  of  wide-ranging  expertise  and  continuous 
engagement with practicing professionals in the field, etc.  In many cases, setting up and maintaining such 
training for a small team of inspectors at the national level is not cost effective. 

During  the  stakeholders’  consultation,  only  five  Member  States  stated  that  they  conduct  internal  training 
programmes. However, they encourage their flag State inspectors to participate in EMSA training and see the 
need for this type of capacity building to be further developed, including  standardising the training of flag 
State inspectors (common core curricula) to ensure harmonization.  

2.3.  How likely is the problems to persist? 

The disparity between the Directive and the more recent international rules is likely to persist, maintaining 
the legal uncertainty. On the one hand, as parties to the maritime international conventions, it is expected that 
Member  States  as  flag  States  will  implement  the  III-Code  and  undergo  the  IMO  audit,  as  they  are  now 
mandatory.  On  the  other  hand,  the  fragmented  and  incomplete  way  in  which  the  III-Code  has  been 
incorporated  into  EU  law,  will  most  likely  lead  to  continued  legal  uncertainty  and  Member  States 
implementing the III-Code requirements in a way that best suits their type and size of fleet and administration. 
IMO audits (conducted every 7 years) may pick up some areas for improvement, for which the flag State may 
then act, but there would be no real enforcement mechanism if a given Member State does not undergo the 
audit or chooses not to take action on the basis of the audit results.  

Uneven  levels  of  ambition  as  regards  critical  elements  for  carrying  out  duties  as  a  flag  State,  such  as 
monitoring and control including the level (scope) and number of flag State inspections of the flagged fleet, 
are likely to persist without further EU level intervention. That would be an element of risk in the ability of a 

63  The  same  problem  was  identified  for  officers  in  the  early  days  of  implementation  of  the  PSC  Directive,  and  was 
addressed through a system of continuous harmonised training. 

17 

 
 
                                                           
flag State administration to perform tasks incumbent on it under international law and therefore  may have 
negative consequences on safety. Similarly, the rules for allowing ships to operate upon granting the right to 
fly the flag of a MS will remain in place, but will continue to be implemented in a non-harmonised way with 
risks of distortion in terms of level of safety control, monitoring and oversight.  

Digitalisation  would  likely  continue  at  slow  and  sporadic  pace  and  it  would  depend  on  priorities  and 
availability of resources in the Member States. There would be no clear time frame for use of digital solutions 
by all Member States to enable digital information sharing offering efficiency gains. The possibility to use e-
certificates  would  be  available  on  voluntary  basis  and  the  full  potential  in  terms  of  enhanced  information 
exchange  and  cooperation  would  not  be  exploited,  either  by  flag  State  administrations  or  by 
shipowners/operators.  According  to  the  2022  Strategic  Foresight  Report64,  “enabling  a  greener  transport 
sector with digital technologies” is one of the areas where the twinning of the green and digital transitions is 
expected to have a major effect. 

In addition, while the current Directive does not include any provision on training of flag State inspectors, this 
may  still  take  place  in  an  unstructured  manner,  building  on  Member  States’  in-house  training  and  their 
voluntary participation in training developed and provided by EMSA depending on available expertise and 
resources in EMSA. 

More generally, competition between EU flags risks being distorted downwards towards the lowest common 
denominator.  

It  is manifestly  accepted  that  those flag States  that  try  to  create  a competitive advantage  based on the lax 
enforcement of the rules (e.g. by not doing any or sufficient flag State inspections), rather than on quality and 
service, and those shipowners willing to register their ships under those flags (even if few in the EU) do so to 
cut costs. The consequence of such lax practices is an increased risk to maritime safety. Substandard ships can 
pose  a  number  of  risks  to  safety,  including  casualties  and  pollution  incidents.  The  environmental 
consequences from an accident at sea could be disastrous for the economy and the environment of all coastal 
EU Member States. There are costs of complying with the relevant international maritime safety rules and 
shipowners operating substandard ships can potentially undercut those that meet the necessary standards, and 
can  consequently  gain  a  competitive  advantage.  Given  that  the  market  in  international  shipping  is 
competitive, and shipowners and operators seek to minimise their costs, which do not reflect the full societal 
costs of their actions wherever they trade, specific EU regulation has been introduced. This largely builds on 
international  rules,  that  are  however  not  directly  enforceable  as  explained  in  section  1.  Some  flag  States 
(especially non-EU ones) do not enforce international safety and pollution prevention standards on ships on 
their  register.  Hence  the  need  to  have  the  ‘second  line  of  the  defense’.  However,  lax  flag  State  control 
would put additional burden on PSC, but PSC cannot substitute for flag States’ responsibility and, in any case, 
PSC only acts ex-post (a PSC inspection or a detention can only occur when a “substandard” ship is already 
sailing). 

Ensuring level playing field in the internal market means that there should be no situation where avoiding the 
internationally agreed rules is rewarded as this risks becoming the lowest common denominator. Substandard 
ships with “clean” certificates compete unfairly with those ships who actually meet all safety rules but are 
faced with higher costs due to better safety standards. There are such temptations as evidenced by a recent 
situation where serious issues were raised over how an EU flag State had handled a large influx of ships to its 

64 COM(2022) 289 final. 

18 

 
 
                                                           
newly created second register in a short time65. It transpired that the flag administration had little knowledge 
or control over the second register or its commercial manager and had not performed a single inspection of 
the  ships  changing  into  its  flag  and  had  not  monitored  the  work  performed  on  these  vessels.  They  had 
basically only staff to do the administrative and paper work and the increase of the workload had not been 
matched with resources. It became clear that the administration was overwhelmed and under pressure to issue 
statutory certificates without any real control or monitoring of the ships in question66. 

3.  WHY SHOULD THE EU ACT? 

3.1.  Legal Basis 

The  legal  basis  giving  the  EU  the  right  to  act  is  Article  100(2)  of  the  Treaty  on  the  Functioning  of  the 
European  Union.  Article  91(1)(c)  of  the  Treaty  provides  that  the  Union  has  competence  in  the  field  of 
transport to lay down measures to improve transport safety. 

Within this legal framework, the EU provides for a coordinated and harmonised safety standard, protecting 
life and the marine environment across the Union. The incorporation of FSD within EU law also provides for 
the  essential  support  that  EMSA  offers  the  Member  States  in  terms  of  targeting,  recording  and  sharing 
inspection results and training for the flag State inspections they perform. Travelers and citizens in general 
can be reassured that a similar safety standard exists across the Union and the results of inspections (both by 
flag States and port States) are shared and monitored so that there is no weak link in terms of maritime safety.      

3.2. 

Subsidiarity: Necessity of EU action 

Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall 
act  only  if  and  in  so  far  as  the  objectives  of  the  proposed  action  cannot  be  sufficiently  achieved  by  the 
Member States. To the extent that international instruments in the field of flag State control are an exclusive 
Union competence pursuant to Article 3(2) TFEU, the subsidiarity principle does not apply, either to those 
instruments, or to Union rules implementing those agreements. 

Shipping is an  international  sector,  operating in different EU  and  international waters  and  regulated  at  the 
global level as well as by regional and national instances. Therefore, it has by nature a strong cross-border 
dimension. A key objective of the EU Maritime safety policy for over 30 years has been to establish equal 
conditions in the internal market, under which quality ships and flags compete for maritime transport.  

In absence of EU action, the current legal uncertainty would remain and the EU Member States would be 
transposing international obligations into national legislation in an uncoordinated way. Ultimately, this would 
lead to less protection for EU citizens, maritime safety and the environment. 

Whereas the practice of flagging is a right only enjoyed by sovereign States, the conditions for granting and 
maintaining the flag are determined according to international conventions ratified by the Member States. As 
pointed out above under problem driver 1, the matter is formally and legally Union exclusive competence as 

65  In  a  very  short  time  (3  ½  years)  the  second  register  grew  883%  (in  terms  of  tonnage)  notably  by  attracting  ships, 
especially large containerships, to reflag. Figures show that close to 1/3 of the ships came from other EU flags (12 Member 
States).  
66 This led to inquiries from the Commission regarding how they had applied Article 4 of the FS Directive and how their 
Quality Management System was working (as it should normally pick up such omissions before they happen and ensure the 
orderly handling of any such new entry to the flag in a transfer of flags). 

19 

 
 
                                                           
recognised  by  Council  Decision  2013/268/EU,  setting  out  the  Union  position  that  had  to  be  followed  by 
Member States in IMO at the time (in 2013) of agreeing the III-Code. 

3.3. 

Subsidiarity: Added value of EU Action 

The  2018  ex-post  evaluation  concluded  on  the  EU  added  value  regarding  the  legal  obligations  and 
enforcement  that  the  flag  State  Directive  brings  in  terms  of  harmonisation,  consistency,  and  coherence 
between  Member  States  and  their  responsibilities.  It  also  found  that  the  effective  implementation  of 
international rules, such as the IMO III-Code, should be ensured through the Directive. 

The main added value of a revised Directive lies foremost in continuing to ensure a harmonised and coherent 
approach  towards  ships  flagged  in  EU  Member  States,  by  incorporating  and  consolidating  mandatory 
international rules, also bringing legal certainty under the EU legal order.  

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1. 

 General Objectives 

In view of the Problems identified in Section 2, the revision of the Directive has three general objectives: (1) 
maintain a level playing field and avoid market distortions; (2) ensure high levels of maritime safety; and, (3) 
ensure prevention of maritime pollution due to marine casualties. This revision should thus also contribute 
towards Sustainable Development Goal (SDG) 3 (“Ensure healthy lives and promote well-being for all at all 
ages”)  and SDG  14 (“Conserve  and sustainably  use  the  oceans,  seas  and marine  resources  for sustainable 
development”).  

4.2. 

Specific Objectives 

To  address  the  identified  problem  drivers,  four  specific  objectives  have  been  set.  The  specific  objectives 
(SOs) and their correspondence with the problem drivers are presented in Figure 5. 

SO1:  Align  the  flag  State  Directive  with  new  international  rules.  The  review  aims  at  incorporating  and 
consolidating the relevant parts of the IMO III-Code into the Directive, as well as maintaining and aligning 
the  requirement  for  Member  States  as  flag  States  to  undergo  the  IMO  Audit  to  maintain  applicability, 
uniformity and ensure enforcement, as well as attractiveness of a high-quality EU MS flagged fleet. 

SO2:  Ensure  adequate  inspections  and  monitoring/oversight.  The  review  aims  at  ensuring  adequate 
inspection  levels  and  oversight,  including  for  the  monitoring  of  ROs.  It  also  aims  at  enhancing  and 
harmonising training of FS inspectors across EU Member States, with EMSA support, to improve technical 
and operational capacity.  

SO3: Ensure higher uptake of digital solutions. The review aims to digitalise paper-based Member State flag 
registers via e-certification registers and e-certificates (building on EMSA hosted solutions) using a common 
available technical protocol with the key feature of enabling interoperability at EU-level. This should allow 
sharing relevant flag State information for enabling increased efficiency at both national and EU level. SO3 
will  also  facilitate  the  achievement  of  SO2  as  it  will  contribute  towards  the  efficient  use  of  information 
supporting technical expertise in performing inspections and monitoring of the flagged fleet/ROs.  

SO4:  Ensure a  harmonized  approach in  the understanding,  reporting and  measuring performance  of flag 
State  fleets  and  duties.  The  review  aims  at  modernising  the  criteria  in  the  FSD  for  measuring  flag  State 

20 

 
 
performance  (measuring  both  fleet  and  administration  performance)  through  a  common  approach  among 
Member States. SO3 will also facilitate the achievement of SO4. By sharing the results of the inspections and 
monitoring via e-reporting with other Member States in a systematic way, flag State administrations will be 
able to identify issues of common concern and take common action to correct such issues. This also apply to 
the oversight of ROs performing statutory work on behalf of the Member States. This sharing, together with a 
dedicated forum to discuss flag State compliance issues, creates a certain transparency and therefore peer-
review. This may also result in less deficiencies detected and/or detentions in PSC inspections.  

Figure 5: Correspondence between the specific objectives and the problem drivers 

5.  WHAT ARE THE AVAILABLE OPTIONS? 

5.1.  What is the baseline from which options are assessed? 

The EU Reference scenario 2020 (REF2020) is the starting point for the impact assessment of this initiative. 
The REF2020 takes into account the impacts of the COVID-19 pandemic that had a significant impact on the 
transport  sector.  More  detailed  information  about  the  preparation  process,  assumptions  and  results  are 
included in the Reference scenario publication67. Building on REF2020, the baseline scenario for this impact 
assessment  has  been  designed  to  include  the  initiatives  of  the  ‘Fit  for  55’68  package  proposed  by  the 
Commission on 14 July 2021 but also accounts for the achievement of the milestones of the Sustainable 
and  Smart  Mobility  Strategy69  on  shifting  more  activity  towards  more  sustainable  transport  modes, 
thus  reflecting  in  a  stylised  way  other  initiatives  that  are  meant  to  lead  to  a  modal  shift  towards 
waterborne  transport  and  that  are  currently  in  preparation.  A  common baseline was developed  for this 
impact assessment, as well as for the PSC and maritime accident investigation impact assessments to ensure 
consistency. Therefore,  the  baseline  scenario  for  this  initiative  does  not  consider70  the  revision  of  the 
Port  State  Control  Directive  and  of  the  Directive  on  the  investigation  of  accidents  in  the  maritime 

67 EU Reference Scenario 2020 (europa.eu) 
68 Delivering the European Green Deal | European Commission (europa.eu) 
69   EUR-Lex - 52020DC0789 - EN - EUR-Lex (europa.eu) 
70 In line with the Tool #60 of the Better Regulation toolbox, for the sake of coherence, where two or more initiatives are 
being presented together (e.g. as a package) each impact assessment report should use the same baseline. For this reason, a 
common baseline scenario was used for the three initiatives. 

21 

PROBLEM DRIVERSSPECIFIC OBJECTIVESGENERAL OBJECTIVESAlign the Flag State Directive with new international rules (SO1)Ensure higher uptake of digitalsolutions(SO3)Ensure adequate inspections and monitoring/oversight (SO2)Ensure a harmonised approach in the understanding, reporting andmeasuring performance of flag State fleets and duties(SO4)Maintain a level playing field and avoid market distortionsEnsure high levels of maritime safetyEnsure prevention of maritime pollution due to marine casualties 
 
 
                                                           
transport sector. In this context, it should be noted that neither the revision of the PSC Directive nor the 
AI Directive is expected to have a direct impact on the problems identified in section 2.1. They are also 
not  expected to  have an  impact  on the maritime transport activity and on  the number of  commercial 
vessels. With regard to safety (i.e. the projected number of fatalities and injuries) and environment (i.e. 
the  tonnes  of  bunker  fuel  lost  at  sea),  the  revision  of  the  AI  Directive  primarily  focuses  on  fishing 
vessels, which are outside the scope of FS Directive. Thus, no impact is expected on the baseline. For 
the  revision  of  the  PSC  Directive,  part  of  the  measures  with  impact  on  safety  and  environment  also 
relate to fishing vessels.  

The baseline scenario assumes no further EU level intervention beyond the current Directive. The IMO III-
Code became mandatory on 1 January 2016. Parts 1 and 2 of the III-Code are particularly relevant for the flag 
States. Some sections of Parts 1 and 2 are already covered in full (i.e. records, improvement, delegation of 
authority,  flag  State  investigations)  or  in  part  by  EU  legislation  (e.g.  objectives,  improvement, 
implementation). Parts 3 and 4 of the III-Code are covered in EU legislation via the VTMIS Directive71 and 
the PSC Directive. These elements are included in the baseline scenario.  

The IMO Audit has also become mandatory since the adoption of the Directive under the III-Code, while the 
current corresponding provision in the FSD (Article 7) requiring Member States to undergo the then voluntary 
IMO audit, ceased to be applicable. All Member States have undergone the IMO Audit and are expected to 
continue to do so, as flag States agreed to be bound by the mandatory rules following the Council Decision 
2013/268/EU. Thus, the IMO Audit is part of the baseline.  

The COVID-19 pandemic had a major impact on global shipping, affecting all its segments from passenger 
ships  to  container  ships  and  oil  tankers.  In  the  baseline  scenario,  international  maritime  freight  transport 
activity  (intra  and  extra-EU)  is  projected  to  be  21%  lower  in  2020  relative  to  2015.  From  2021  onwards 
however it is projected to start recovering and grow strongly by 2025 and beyond (i.e. 19% growth for 2015-
2030  and  48%  for  2015-2050),  due  to  the  rising  demand  for  primary  resources  and  container  shipping. 
Relative to 2019, this is equivalent to 8% increase in transport activity by 2030 and 33% growth by 2050. 

Driven by the increase in the transport activity and the number of vessels, the number of marine casualties is 
projected to increase over time in the baseline scenario. The number of marine casualties in which EU flagged 
vessels are involved is projected to increase by 7% by 2030 relative to 2019 and by 45% by 2050 without 
further EU level action. At the same time, the degree of severity of marine casualties is projected to decrease, 
leading  to  a 17%  decrease in the number of  fatalities in which  EU  flagged  vessels  are  involved  by  2030. 
However, post-2030 the increase in the transport activity and the number of EU flagged vessels outweighs the 
reduction in the degree of severity of marine casualties and the number of fatalities increases by 14% by 2050 
relative to 2019. This is still far from the milestone of the Sustainable and Smart Mobility Strategy to achieve 
a close to zero death toll for all modes of transport in the EU. 

The tonnes of bunker  fuel lost  at  sea  due to very  serious  marine  casualties  involving  EU flagged ships  is 
estimated to go up from around 390 tonnes in 2019 to 510 tonnes in 2030 and 690 tonnes in 205072.  

The baseline incorporates foresight megatrends73 and developments captured in the 2022 Strategic Foresight 
Report74.  Among  others,  it  captures  the  trend  of  increasing  demand  for  transport  as  population  and  living 

71 Directive 2002/59/EC 
72  An  average  level  of  30  tonnes  of  bunker  fuels  lost  per  vessel  has  been  used  for  the  estimations  in  the  context  of  the 

impact assessment support study.  

22 

 
 
                                                           
standards grow. The 2022 Strategic Foresight Report also reconfirms the existing megatrends identified in the 
2021  Strategic  Foresight  Report75  and  more  specifically,  the  megatrends  of  “Climate  change  and 
environmental degradation” and that of “Accelerating technological change and hyperconnectivity” that relate 
to the ongoing twin green and digital transitions. The ability of the EU to achieve these twin transitions very 
closely relates to the deployment of existing and new technologies in scale and their appropriate framing with 
relevant policies to achieve their maximum effectiveness. “Enabling a greener transport sector with digital 
technologies” is one of the areas where the twinning of the green and digital transitions is expected to have a 
major effect. Relevant to the FSD revision are the use of digital ship related certificates and documents using 
and developing IT tools, hosted in EMSA, for the purpose of enabling sharing and increased transparency as 
well as efficiency within and between maritime administrations in the EU and for the benefit of the industry 
(shipowners and operators as well as marine insurance, classification and shippers). In the baseline scenario, 
the total costs for the EU flag State authorities for performing flag State inspections are projected to increase 
from EUR 2.5 million in 2021 to EUR 2.8 million in 2030 and EUR 3.8 million in 2050. More details on the 
baseline scenario are included in Annex 4.  

It was not possible to quantify the impact of the Russian invasion of Ukraine in the context of the baseline 
scenario, as there is large uncertainty with respect to its impacts, in particular for the medium to long term. 
While the impact of the Russian invasion of Ukraine is felt in terms of trade (e.g. grain, bulk fertilizers and 
hydrocarbons) and in certain geographical areas (parts of the Black Sea76), the impact on FSD is expected to 
be limited. This is because the Directive only addresses the EU flagged fleet.  

5.2.  Description of the policy measures and policy options 

As  a  first  step,  a  list  of  possible  policy  measures  was  established  after  extensive  consultation  with 
stakeholders, expert meetings,  and independent research. This list was subsequently  screened based on the 
likely  effectiveness,  efficiency  and  proportionality  of  the  proposed  measures  in  relation  to  the  given 
objectives, as well as their legal and technical feasibility, following input from the stakeholders.  

Discarded policy measures and options 

A  number  of  possible  policy  measures  and  policy  options  that  were  initially  considered  were  discarded 
following  the  screening/analysis  above.  The  discarded  policy  measures  and  options  and  the  reasons  for 
discarding them are set out in Annex 12.  

Retained policy measures and policy options  

The retained policy measures to address the problems and problem drivers identified in section 2, and the 
specific objectives identified in section 4, are provided in Table 1 below, linking the retained policy measures 
with the specific objectives and the policy options (POs). A more detailed presentation of the retained policy 
measures is provided in Annex 13. 

73 https://knowledge4policy.ec.europa.eu/foresight/tool/megatrends-hub_en#explore  
74 COM(2022) 289 final. 
75 2021 Strategic Foresight Report | European Commission (europa.eu) 
76 The EU initiative on Solidarity lanes and the UN initiative on grain trade from UA does in not preclude shipowners under 
EU Member State flags to participate, as long as the ships qualify.  

23 

 
 
                                                                                                                                                                                                       
The  retained  policy  measures  were  structured  into  those  common  across  policy  options  (PM1  to  PM8), 
presented in the first part of Table 1, and those different across options (PM9a to PM11b), presented in the 
second  part  of  Table  1.  The  policy  measures  are  then  presented  according  to  four  main  areas.  The  main 
differences between options are related to inspections requirements and monitoring of flagged fleet but also to 
capacity building in Member States. These aspects are considered in a balanced way, to avoid disrupting the 
competitive situation of the flags affected. All policy measures (PMs) common across policy options have 
found strong support from both Member States and industry consulted. For the PMs different across policy 
options, the support varies depending on the size and type of flagged fleet and also the extent to which the flag 
is using recognised organisations to do the technical work on behalf of the EU MS flag State. 

Table 1: Links between the retained policy measures, specific objectives and policy options 
Policy Measures 

Specific 
objectives/ 
Problem 
Drivers 

Policy options 
PO3 
PO2 

Policy measures common across options 

Incorporation of and alignment to the international rules and 
procedures 
PM1: Incorporate the relevant flag State parts of the III-Code and 
maintain IMO Audit mandatory 
PM2: Nominate European Commission/EMSA as observes at IMO 
Audits 
Cooperation, continuous improvement and performance 

PM3: Establish a flag State expert group to promote cooperation 
between the Member States and the European Commission 
PM4: Modernise the way Flag State performance is measured 

Digitalisation and exchange of information 

PM5: Introduce a technical solution for use by the Member States 
requiring: (i) e-certificate registry, reporting of (ii) e-certificates, 
(iii) e-FS inspection reports, enabling  exchange and sharing of 
information between the Member States and with EU-wide systems 
(hosted in EMSA) 
PM6: Develop a mechanism and template for reporting information 
and statistics 

Capacity building, inspections and monitoring of flagged fleet 

PM7: Specify EU Oversight programme of flagged fleet and RO’s 

PM8: Introduce common capacity building and harmonised training 
(post-qualification) for Flag State inspectors / surveyors / auditors 

SO1  
PD1 
SO1  
PD1 

SO2, SO4 
PD4 
SO4 
PD2 

SO3, SO4 
PD3 

SO3, SO4 
PD3 

SO2, SO4 
PD2, PD5 
SO2, SO4 
PD2, PD5 

Policy measures different across options 

Capacity building, inspections and monitoring of flagged fleet 

PM9a: Define flag State inspector to prevent the use of non-
exclusive technical staff  
PM9b: Frame when non-statutory staff can be used and for what 
inspections 
PM10: Introduce specific requirement regarding inspections, 
commensurate with the size and type of fleet 

SO2 
PD2, PD5 
SO2 
PD2, PD5 
SO2 
PD2 

24 

PO4 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

PO1 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Policy Measures 

PM11a: Require FS to do the International Safety Management 
(ISM) audit and issue ISM Certificates (Statutory), combined with a 
number of FS inspections to be performed 
PM11b: Require full statutory survey by FS when ‘high risk’ ships 
wish to register under a MS flag 

Policy measures common across policy options 

Specific 
objectives/ 
Problem 
Drivers 
SO2 
PD2 

SO2 
PD2 

PO1 

Policy options 
PO3 
PO2 

PO4 

√ 

√ 

Incorporation  of  and  alignment  to  the  international  rules  and  procedures  developed  after  the 

(i)  
adoption of the Directive in 2009 and agreed upon by EU Member States.  

This  area  includes  policy  measures  PM1  (Incorporate  the  relevant  flag  State  parts  of  the  III-Code  and 
maintain  IMO  Audit  mandatory)  and  PM2  (Nominate  European  Commission/EMSA  as  observers  at  IMO 
Audits)  which  address  SO1  (Align  the  flag  State  Directive  with  new  international  rules).  These  policy 
measures received support during the stakeholders’  consultation: 10 of the 17 Member States  who replied 
either agreeing or strongly agreeing, with the remaining 7 taking a neutral stance. In the final stakeholders’ 
workshop organised in January 2022, no Member State opposed this measure and no concerns were raised by 
industry  stakeholders  (ROs,  shipowners,  etc.).  The  incorporation  and  alignment  of  the  Directive  with  the 
relevant  flag  State  parts  of  the  IMO’s  III-Code  and  IMO  Audit  (PM1)  would  not  imply  extra  burden  on 
Member States, since all of them are already bound by the III-Code and have undergone the IMO Audit, and 
will continue to have to do so in the 7-year cycle. PM1 is however expected to provide legal certainty.  

In  addition,  to  improve  transparency,  ensure  synergies  and  avoid  overlapping  audits,  PM2  enables  the 
Commission and/or EMSA to participate as observers (on the side of the flag State) during IMO Audits. This 
would also allow EMSA to start a visit programme, checking implementation of the FSD, in Member States 
on behalf of the Commission. In the consultations no stakeholder opposed the measure, and only one Member 
State raised some concerns about PM2. 

(ii)  Cooperation,  continuous  improvement  and  performance  through  learning  lessons  from  the  10+ 
years of implementation. 

This area includes two measures, PM3 (Establish a flag State expert group to promote cooperation between 
the Member States and the European Commission) and PM4 (Modernise the way Flag State performance is 
measured), that both contribute towards meeting SO4 (Ensure a harmonised approach in the understanding, 
reporting and  measuring  performance  of flag State fleets  and duties)  while  PM3  also  contributes towards 
SO2 (Ensure adequate inspections and monitoring/oversight). No Member State or industry representative 
opposed establishing a flag State expert group (PM3). In addition, 10 of the 17 flag States interviewed were in 
favour of a revision of the current criteria for measuring flag State performance (PM4). In the course of the 
consultation, in particular during the dedicated workshop on possible criteria for measuring performance77, 
stakeholders, both flag State administrations and industry, acknowledged the need to take into account also 
the  performance  of  the  flag  State  administrations  in  addition  to  the  fleet  performance,  based  on  a  more 

77  Workshop  on  measuring  FS  performance:  the  paradigm  shift  in  KPIs  from  fleet  to  governance,  October  2021  and 
targeted interviews. 

25 

 
 
  
  
  
  
  
  
 
                                                           
dynamic  approach  by  applying  modern  and  transparent  techniques  to  measure  performance  (risk  based 
approach). 

(iii)  Digitalisation and exchange of information, with the purpose of supporting maritime administrations 
in exercising their obligations as well as increase information sharing. 

This  area  covers  policy  measures  PM5  (Introduce  a  technical  solution  for  use  by  the  Member  States 
requiring:  (i)  e-certificate  registry,  reporting  of  (ii)  e-certificates,  (iii)  e-Flag  State  inspection  reports, 
enabling    exchange  and  sharing  of  information  between  the  Member  States  and  with  EU-wide  systems 
(hosted in EMSA)) and PM6 (Develop a mechanism and template for reporting information and statistics), 
that contribute to SO3 (Ensure higher uptake of digital solutions) and SO4 (Ensure a harmonised approach 
in  the  understanding,  reporting  and  measuring  performance  of  flag  State  fleets  and  duties).  Both  policy 
measures were supported by 12 of the 17 Member States who responded to the consultation, who agreed or 
strongly agreed. Emphasis was put on the need to ensure interoperability (rather than fixing one standard) and 
the ability to share information between administrations using existing EU-wide operational systems, building 
on EMSA developed technical solutions and databases (e.g. THETIS78). The industry was generally in favor 
of further digitalisation, and shipowners commented that an effective, efficient, modern and supportive flag 
State (which requires increased digitalisation) can have a strong positive effect on its attractiveness. 

 (iv)  Capacity building, inspections and monitoring of flagged fleet, with the aim to ensure technical and 
operational capability in EU flag administrations to perform the obligations incumbent upon them. 

This  policy  area covers measures PM7  (Specify  EU Oversight programme  of flagged  fleet  and  RO’s)  and 
PM8  (Introduce  common  capacity  building  and  harmonised  training  (post-qualification)  for  Flag  State 
inspections  and 
inspectors/surveyors/auditors) 
monitoring/oversight)  and  SO4  (Ensure  a  harmonised  approach  in  the  understanding,  reporting  and 
measuring performance of flag State fleets and duties). Both policy measures received stakeholders’ support, 
with 13 of the 16 Member States responding to this question in the consultation process agreeing on capacity 
building and training measures, involving EMSA, as well as on introducing an EU RO oversight programme.  

(Ensure  adequate 

that  contribute 

towards  SO2 

Policy measures different across policy options 

PM9a (Define flag State inspector to prevent the use of non-exclusive technical staff) and PM9b (Frame when 
non-statutory  staff  can  be  used  and  for  what  inspections)  concern  the  use  of  technical  staff  that  is  not 
exclusively  employed  by  the  flag  State  administration,  contributing  towards  SO2  (Ensure  adequate 
inspections and monitoring/oversight). This is currently not specified either in the FSD or in the III-Code, but 
during the impact assessment process important differences were identified in how Member States currently 
meet  the  requirement  of  ‘adequate  resources’.  PM9a  would  prohibit  using  non-exclusive  technical  staff. 
PM9b would not prohibit this use but it would seek to set requirements for if, when and how such personnel 
could be used and for what type of technical work and inspections (not statutory). There was, however, quite 
strong  opposition  from  the  Member  States  on  the  measure  to  disallow  non-exclusive  flag  State  inspectors 
(PM9a), shared by the industry. The main reason put forward was that it is not who does the work that is 
important, the key aspect being that the respective personnel has the right qualification and training, ensuring 
that verifications/inspections are done properly. While not all EU flag administration use non-exclusive staff, 

78 The port State control reports database hosted in EMSA 

26 

 
 
                                                           
some do (MT, CY  and  LU)  and  they  argue  that the  implications of  a  prohibition may  be  high,  while  not 
necessarily improving the overall objective of maritime safety and pollution prevention. 

PM10 (Introduce specific requirement regarding inspections, commensurate with the size and type of fleet) 
would complement PM9b and aim to define the share of the fleet inspected per year, commensurate with the 
type  and  size  of  flagged  fleet.  PM10  contributes  towards  SO2  (Ensure  adequate  inspections  and 
monitoring/oversight). This would be done via a delegated act. For the assessment, it is assumed that 25% of 
the MS flagged fleet would be inspected per year, so that the entire fleet would be inspected over a four year 
period.  This  measure  would  also  support  PM7,  to  perform  purposeful  and  efficient  monitoring  of  ROs.  It 
should also support prioritising resources by Member States to flag State administrations, to support fulfilling 
their obligations. During the stakeholder consultation, 7 of 15 flag State administrations mentioned that they 
are experiencing staff shortages in the category flag State Surveyors/inspectors/auditors. There is however no 
uniform  view  in  how  to  address  this  issue,  some  Member  States  pointing  to  difficulties  and  the  need  to 
consider national circumstances as well as the size and type of fleet.  

PM11a  (Require  FS  to  do  the  International  Safety  Management79  (ISM)  audit  and  issue  ISM  Certificates 
(Statutory), combined with a number of FS inspections to be performed) and PM11b (Require full statutory 
survey  by  flag  State  when  ‘high  risk’  ships  wish  to  register  under  a  MS  flag)  both  aim  to  strengthen  the 
current Article 4 of the Directive by requiring the flag State administrations to carry out the surveys when the 
ship first enters its register/flag, and contribute towards SO2. This would allow the administrations to get a 
firsthand impression of the quality of the ships and to gain a better control. Today, most of this work is done 
by ROs on behalf of the flags. The measures would therefore require the flag States to have the necessary 
staff and expertise to carry out such survey and inspection work. In addition, PM11a would also require that 
10% of the MS flagged fleet would be inspected per year, so that the entire fleet would be inspected over a ten 
year period. There was, however, quite strong opposition from the Member States on the measures requiring 
the flag States to retain some of the statutory survey work to be performed by them directly, shared by the 
industry, for the same reasons as for PM9a explained above. For industry, the reason is that they do not think 
Member  States  as  flag  States  are  (any  longer)  equipped  and  have  the  right  human  resources  to  do  such 
statutory work. 

Description of the policy options 

The retained policy measures have been grouped in 4 policy options (PO1, PO2, PO3 and PO4). All policy 
options include the common policy measures (PM1 to PM8), contributing towards all specific objectives.  

The extensive consultations with stakeholders80, which confirmed their very high interest for the measures 
common  to  all  policy  options,  expert  meetings,  independent  research  and  the  Commission’s  own  analysis 
building on experience with the implementation of the 2009 maritime safety package, the results of the ex-
post  evaluation  as  well  as  consideration  of  the  analysis  done  on  the  basis  of  IMO  audits81  so  far  and  the 
indications of common findings and shortcomings as well as root-cause analysis done by individual Member 
States as required by Article 8.2 of the FSD (in cases where their performance is not satisfactory),  resulted in 

79 The IMO International Safety Management (ISM) Code provides for an international standard for the safe management 
and  operation  of  ships  and  for  pollution  prevention,  under  the  code  ship  owners/operators  and  companies  must  have  a 
Safety Management System (SMS) and a Document of Compliance (DOC) attesting SMS effectiveness. 
80  During  the  consultation  workshop  in  November  2021  with  the  EU  MS  Maritime  Directors  and  at  the  stakeholders’ 
consultation workshop organised in January 2022, these policy measures were the main focus of discussion. 
81 See Annex 8 

27 

 
 
                                                           
the  four  groups  of  common  measures  on  alignment  to  international  rules,  cooperation  and  performance, 
digitalisation and capacity building representing the “must-have” for any meaningful policy intervention.  

The  difference  between  the  policy  options  stems  from  the  approaches  to  meet  SO2,  to  ensure  flag  State 
compliance. They differ in the level of harmonisation and control for ensuring compliance. This is the core of 
the matter: flags must ensure compliance as the responsibility that a ship is fit for purpose lies with them; it is 
the flag State administration that has the last word if a ship under its flag should be issued with the relevant 
certificates or not. That is the responsibility and quality control under international and EU rules and key for 
maritime safety and pollution prevention leading to quality shipping. 

For the policy measures that are different across policy options, the stakeholders’ support varied depending on 
the size and type of the flagged fleet and also the extent to which the flag is using recognised organisations to 
do the technical work on behalf of the EU MS flag State.  There is however always a cost associated with 
upholding competences and knowledge/expertise of employed staff and control/monitoring of flagged fleet. 
This is also an area where there is a need to have some harmonisation at EU level to avoid a situation of 
excessive divergence and therefore the risk of distortion of competition between the EU Member States flags. 
Another  aspect  that  needs  consideration  is  the  possibility  to  actually  find  the  technical  expertise  needed 
(assuming that the necessary financial resources could be made available).  

There is therefore a need for the introduction of a more harmonised way in which control of flagged fleet 
should  be  done,  taking  into  consideration  that  the  type  and  size,  as  well  as  trading  area,  of  ships  varies 
between Member States. This was taken into consideration in finding a balance that would allow to meet the 
specific objective 2 (Ensure adequate inspections and monitoring/oversight), while leaving it to flag States to 
decide to what extent they want to do statutory work or not, and use ROs. In addition, both flag States and 
industry stakeholders argued for a measured approach. 

Policy option 1 (PO1) additionally includes PM9a that prevents the use of non-exclusive technical staff from 
doing any type of work for the flag State administrations.  Administrations  would need to get resources to 
recruit, employ and retain relevant technical staff to undertake flag State inspections and RO monitoring. This 
would put all administrations on equal footing, aiming to avoid any competitive advantage by outsourcing 
and  reducing  costs.  It  assumes  that  such  technical  expertise  is  readily  available  for  the  administrations 
concerned  and  can  be  employed.  While  this  concerns  only  three  Member  States  (MT,  CY,  LU)  currently 
using  such  non-exclusives,  in  particular  MT  and  CY  have  the  biggest  flagged  fleets  in  the  EU,  together 
making up close to 33% of the EU flagged fleet and much of that fleet is sailing in cross-trades all over the 
world. 

Policy option 2 (PO2) does not prohibit the use of non-exclusive technical staff but ‘ring-fences’ when and 
for what type of surveys, in which circumstances, such non-exclusive personnel could be allowed (PM9b). 
This reflects current practice for some Member States and accepts that it is the quality of the work that is 
essential  and  not  the  status  per  se  of  the  person  doing  it.  Nevertheless,  it  would  clarify  the  controlled 
conditions for such use, in particular avoidance of any conflict of interest. To avoid a situation where this is, 
or  risks,  becoming  the  ‘norm’,  PM9b  is  coupled  with  PM10,  which  introduces  specific  requirements 
regarding  inspections,  commensurate  with  the  size  and  type  of  fleet,  with  the  aim  that  all  EU  flag 
administrations retain core technical staff within the administration for the core work in ensuring monitoring 
of their ROs and compliance of their flagged fleet. For the assessment, it is assumed that 25% of the MS 
flagged fleet would be inspected per year, so that the entire fleet would be inspected over a four year period. 
Flag State Inspections need to be performed as a complement to surveys for the dual purpose of ensuring the 

28 

 
 
ship  is  fit  continuously  reflecting  the  certificates  issued  and,  for  monitoring  directly  on  the  spot  the  work 
performed by ROs on behalf of the flag State 

Policy option 3 (PO3) includes measure PM9a and would additionally clarify Article 4.1 of the Directive, 
which  currently  leaves  it  to  the  flag  State  to  ‘…take  measures  it  deems  appropriate..’,  by  specifying  and 
requiring the Member States flag administrations to have the capacity to do the statutory work and issue the 
related statutory certificates related to the International Safety Management Code (PM11a). This reflects to 
some extent the current situation where some Member States do this (and have not given this away to ROs). 
This would not affect the fleet currently flagged but only apply when a ship changes flag into the Member 
State  flag  register,  and  would  allow  the  flag  administration  to  have  a  first-hand  impression  of  the  safety 
culture both on board and of the shipowner/management company for ‘new’ entrant ships to the register. Any 
subsequent such audits may then be performed by ROs. This option is reduced in scope as compared to a 
requirement where all statutory work would be required for any first entrant ship and prohibits the use of non-
exclusive surveyors (PM9a). It would mean that Member States would need to have exclusively employed 
experts in ISM. In addition, PO3 would also require that 10% of the MS flagged fleet would be inspected per 
year, so that the entire fleet would be inspected over a ten year period (PM11a). This is a key difference in 
respect to PO2. The complementarity with the ISM audit and the issuing of the ISM Certificates would allow 
control of the flagged fleet in terms of safety culture but is only one of the many statutory parts required, and 
would be done when a ship changes flag from another flag State. 

Policy option 4 (PO4) would also clarify Article 4.1 of the Directive by specifying and requiring Member 
States flags to have the capacity to do the statutory survey work and issue the related statutory certificates 
concerning ‘high-risk’82 ships (PM11b), prior to allowing them to operate under a Member State flag. There 
is a limited number of such transfers, but it still requires the flag State administrations to have all required 
expertise,  for  all statutory  work  and not only  for  ISM.  PO4  would  therefore  also prohibit the use  of  non-
exclusive technical staff (PM9a). The difference between PO2, PO3 and PO4 is the scope of the technical 
work and therefore the resources and technical staff required. Both PO2, PO3 and PO4 could be considered 
over and above what is required by the III-Code, but actually address the problem of ensuring that Member 
States as flag States have adequate expertise to meet their obligations.   

In PO 3 there is a certain such specific requirement as in PO2. This measure would strengthen the current 
requirement (Article 4) where a ship is flagging into the register and all first such statutory ISM audits would 
be made mandatory and linked with a certain number of flag State inspections, done by exclusive staff of the 
flag State administration, to verify also all other statutory aspects as normally performed by ROs on behalf of 
the flag State. The difference with PO2 is that in PO3 however, ‘only’ 10% of the Member States flagged 
fleet would be required to be inspected per year, so that the entire fleet would be inspected over a ten year 
period.  

Following the targeted stakeholders’ consultation and other consultation activities, the measures and options 
were discussed again during the final stakeholder workshop organised in January 2022 (see Annex 2 point 
3.4), with an indication of preference for PO2 (with the combination of PM9b and PM10), ahead of PO3 with 
PM11a  requiring  the  Member  States  to  do  the  first  ISM  audit  and  then  a  number  of  FS  inspections,  in 
combination with PM9a. All agreed that the III-Code requires such flag State inspections and RO monitoring 

82  As  classified  in  the  Paris  MoU  port  State  control  system  (meaning  they  have  a  poor  inspection  history  and/or  and  are 
therefore prioritised for PSC Inspection) 

29 

 
 
                                                           
and that at the EU level it needs to be harmonised in relation to the size and type of flagged fleet, as well as 
trading area of flagged fleet. 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

This  section  summarizes  the  main  expected  economic,  social  and  environmental  impacts  of  each  policy 
option83. The proposed measures are assumed to be implemented from 2025 onwards, so the assessment has 
been undertaken for the 2025-2050 period and refers to EU27. Costs and benefits are expressed as present 
value over the 2025-2050 period, using a 3% discount rate. Further details on the methodological approach 
and impacts on costs by measure for the policy options are provided in Annex 4. 

6.1.  Economic impacts 

This  section  provides  the  economic  impacts  of  the  policy  options  on  the  public  authorities  (i.e.  flag  State 
administrations,  European  Commission  and  EMSA)  and  ship  operators.  It  also  provides  an  assessment  of 
impacts on small and medium enterprises (SMEs), the functioning of the internal market and competition, and 
on competitiveness.  

6.1.1.  Impacts on public authorities 

Impacts on flag State administrations. All policy options lead to an increase in the adjustments costs and 
enforcement  costs  for  the  EU  flag  State  administrations  relative  to  the  baseline.  They  also  result  in 
enforcement costs savings (see Table 2). More explanations on each category of costs by policy option are 
provided below, while the detailed costs and costs savings by policy measure and by Member State, including 
the assumptions used to derive them, are provided in Annex 4.  

Adjustment costs for flag State administrations. Adjustment costs for flag State administrations relative to the 
baseline are driven by: (i) one common policy measure included in all options, related to the implementation 
of  the  technical  solutions  for  e-certificate  registry,  reporting  of  e-certificates  and  e-FS  inspection  reports 
(PM5);  (ii)  measure  PM9a  (define flag State inspector to  prevent  the use of  non-exclusive technical staff) 
included  in  PO1,  PO3  and  PO4;  (iii)  measure  PM10  (specific  requirement  regarding  inspections, 
commensurate with the size and type of fleet) included in PO2; (iv) measure PM11a (require FS to do the 
International Safety Management audit and issue ISM certificates, combined with a number of FS inspections 
to be performed) included in PO3; and (v) measure PM11b (require full statutory survey by FS when ‘high 
risk’  ships  wish  to  register  under  a  MS  flag)  included  in  PO4.  On  the  other  hand,  the  incorporation  and 
alignment  as  regards  IMO  instruments  (PM1  and  PM2)  are  not  expected  to  give  rise  to  additional  costs 
relative to the baseline for flag State administrations, as explained in Annex 4.  

For all policy options, measure PM5 (technical solutions for e-certificate registry, reporting of e-certificates 
and e-FS inspection reports) is relevant for 11 Member States (BG, EE, ES, FR, IT, IE, LT, LV, PL, RO and 
SE)84. The one-off capital costs are estimated by EMSA at EUR 300,000 per flag State administration in 2025 

83  The  analysis  in  this  section  is  based  on  the  VVA  et  al.  (2023),  Impact  assessment  support  study  concerning  possible 
revision  of  Directive  2009/21/EC  on  compliance  with  flag  State  requirements,  and  on  the  analysis  of  stakeholders' 
feedback. 
84 So far, 6 Member States have implemented the e-certification register and reporting of e-certificates (BE, DK, DE, FI, PT 
and CY) and MT is in the process of implementing it. Few Member States such as AT, CZ, HU, SI and SK do not have an 
active register or convention ships flying their flag any longer, and do not have to put in place an e-certification registry. In 
addition,  5  Member  States  do  not  issue  e-certificates  themselves  but  have  delegated  this  function  to  Recognised 

30 

 
 
                                                           
 
and the annual costs for maintenance at EUR 100,000 per flag State administration from 2026 onwards. At 
the EU level, the one-off capital costs in 2025 are estimated at EUR 3.3 million, and the maintenance costs at 
EUR 1.1 million per year from 2026 onwards (see Table 2). 

For  PO1,  PO3  and  PO4,  measure  PM9a  (define  flag  State  inspector  to  prevent  the  use  of  non-exclusive 
technical staff) is relevant for 3 flag State administrations that make use of non-exclusive inspectors (CY, MT 
and LU)85. The average cost per hour of inspection by a non-exclusive inspector is estimated at EUR 124, 
while the cost per hour of inspection for an exclusive inspector at EUR 14886. In the baseline, 845 inspections 
are estimated to be performed by non-exclusive inspectors in CY, LU and MT in 2025, going up to 891 in 
2030 and 1,216 in 2050. The additional costs of inspections being performed by exclusive inspectors instead 
of non-exclusive inspectors relative to the baseline are thus estimated at around EUR 0.2 million in 2025 and 
2030 and EUR 0.3 million in 2050 (see Table 2). 

For PO2, measure PM10 (specific requirement regarding inspections, commensurate with the size and type of 
fleet) is expected to increase the number of inspections for the 13 flag State administrations that inspect less 
than 25% of their flagged fleet in the baseline (BE, DK, DE, EE, EL, FR, HR, IT, NL, PT, RO, FI, SE). The 
additional number of inspections relative to the baseline is estimated at 734 in 2025, 769 in 2030 and 1,042 in 
2050, leading to adjustment costs of around EUR 1.3 million in 2025 and 2030, and EUR 1.8 million in 2050 
relative to the baseline (see Table 2).  

For  PO3,  measure  PM11a  (require  FS  to  do  the  International  Safety  Management  audit  and  issue  ISM 
certificates,  combined  with  a  number  of  FS  inspections  to  be  performed)  is  relevant  for  15  flag  State 
administrations (DK, EE, IE, EL, HR, CY, LV, LT, LU, MT, NL, PT, RO, FI, SE) that would need to do the 
International Safety Management (ISM) audit every 5 years87. The costs for the ISM audit for these flag State 
administrations are estimated at EUR 2.2 million in 2025, EUR 2.3 million in 2030 and EUR 3.2 million in 
2050 relative to the baseline. With regard to inspections, the measure is expected to increase the number of 
inspections for the 7 flag State administrations that inspect less than 10% of their flagged fleet in the baseline 
(DE, EE, HR, IT, PT, RO, FI). The increase in the number of inspections for these flag State administrations 
is estimated at 166 in 2025, 173 in 2030 and 233 in 2050 relative to the baseline, leading to adjustment costs 
of around EUR 0.3 million in 2025 and 2030 and EUR 0.4 million in 2050. In total, PM11a would lead to 
adjustment costs estimated at EUR 2.5 million in 2025, EUR 2.6 million in 2030 and EUR 3.6 million in 
2050 in PO3 relative to the baseline (see Table 2).  

For PO4, measure PM11b (require full statutory survey by FS when ‘high risk’ ships wish to register under a 
MS flag) is relevant for 15 ‘high risk’ ships that are projected to require full statutory survey in 2025, 16 in 
2030 and 22 in 2050. The adjustment costs associated to PM11b are estimated at around EUR 0.2 million in 
2025 and 2030 and EUR 0.3 million in 2050 (see Table 2).  

Organisations (RO) to do it on their behalf and do not need to put in place an e-certification registry and reporting of e-
certificates. 
85 CY made use of 6 non-exclusive inspectors (13% of the  total number of inspectors) in 2021, Malta of 77 (78% of the 
total number of inspectors) and Luxembourg of 27 non-exclusive inspectors (100% of the total number of inspectors). 
86 The average number of hours for an inspection performed by an exclusive inspector is also higher than that for a non-
exclusive inspector. 
87  In  the  baseline  scenario,  4  flag  State  administrations  (BE,  BG,  FR  and  PL)  have  already  implemented  the  ISM  audit. 
Three  other  flag  State  administrations  (ES,  IT  and  DE)  issue  the  certificates  themselves  and  should  already  have  trained 
staff to do the ISM audits. 

31 

 
 
                                                                                                                                                                                                       
Total adjustment costs are estimated to be the highest in PO3 for 2025, 2030 and 2050 relative to the baseline 
(EUR 6 million in 2025, EUR 4 million in 2030 and EUR 5 million in 2050), followed by PO2 (EUR 4.6 
million in 2025, EUR 2.4 million in 2030 and EUR 2.9 million in 2050), PO4 (EUR 3.6 million in 2025, 
EUR 1.4 million in 2030 and EUR 1.5 million in 2050) and PO1 (EUR 3.5 million in 2025, EUR 1.3 million 
in  2030  and  EUR  1.4  million  in  2050).  Expressed  as  present  value  over  2025-2050,  they  are  however 
estimated to be the highest in PO2 (EUR 48.9 million), followed by PO3 (EUR 47.7 million), PO4 (EUR 27.8 
million)  and  PO1  (EUR  27.4  million)  relative  to  the  baseline88.  PM5  contributes  over  80%  of  the  total 
adjustment costs in PO1 and PO4 (82% and 81%, respectively), and above 45% in PO2 and PO3 (46% and 
47%, respectively). For PO2, measure PM10 contributes an additional 54% of the total adjustment costs while 
for PO3 measure PM11a provides around 43% of the total adjustment costs.  

Table 2: Costs for EU flag State authorities by policy option and measure relative to the baseline (in million EUR), 
in 2021 prices  

PO1 
2030 

2025 

2050 

2025 

PO2 
2030 

2050 

2025 

PO3 
2030 

2050 

2025 

PO4 
2030 

2050 

Difference to the Baseline 

Adjustment costs   

PM5 

3.3 

1.1 

1.1 

3.3 

1.1 

1.1 

3.3 

1.1 

1.1 

3.3 

1.1 

1.1 

Enforcement costs  

PM7 

Low 
High 

Enforcement costs 
savings  
PM5 

Low 
High 

Adjustment costs   

PM9a 
PM10 
PM11a 
PM11b 

Net costs/costs savings 

0.00 
0.00 

0.01 
0.03 

0.01 
0.03 

0.00 
0.00 

0.01 
0.03 

0.01 
0.03 

0.00 
0.00 

0.01 
0.03 

0.01 
0.03 

0.00 
0.00 

0.01 
0.03 

0.01 
0.03 

0.0 
0.0 

2.5 
2.7 

3.4 
3.6 

0.0 
0.0 

2.6 
2.8 

3.5 
3.8 

0.0 
0.0 

2.5 
2.7 

3.4 
3.7 

0.0 
0.0 

2.5 
2.7 

3.4 
3.6 

0.2 

0.2 

0.3    

0.2 

0.2 

0.3 

0.2 

0.2 

0.3 

1.3 

1.3 

1.8    

2.5 

2.6 

3.6    

0.02 

0.02 

0.03 

Low 
High 

-1.94 
-0.13 
-2.14 
-0.33 
Source: VVA et al. (2023), Impact assessment  support study; Note:  positive  numbers under the category ‘net costs/costs 
savings’ denote net costs and negative numbers denote costs savings.  

-0.57 
-0.85 

-1.96 
-2.17 

-1.15 
-1.30 

-1.13 
-1.28 

3.55 
3.55 

4.57 
4.57 

1.47 
1.31 

3.53 
3.53 

6.05 
6.05 

1.59 
1.37 

Enforcement costs for flag State administrations. The increase in enforcement costs relative to the baseline are 
driven in all policy options by the common measure on the EU oversight programme of flagged fleet and 
RO’s  (PM7), building  on the  requirements  of the  III-Code.  In the  baseline scenario it is  assumed that the 
current practices continue over time, with 12 Member States maintaining the monitoring frequency to two 
years,  1  Member  State  to  five  years  and  6  Member  States  performing  continuous  monitoring.  The  EU 
oversight programme will be established in the context of the flag State expert group. For the purpose of the 

88 The reason for lower costs in PO3 relative to PO2 when expressed in terms of present value steams from the fact that the 
ISM audit is implemented every 5 years.  

32 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                           
assessment, in PM7 the continuous monitoring is assumed to be applied in all Member States. The time spent 
by a flag State  administration in monitoring ROs is estimated to be between 30 hours (low) and 60 hours 
(high) per year, leading to enforcement costs relative to the baseline of EUR 14,000 to 28,000 in 2030 and 
2050 (see Table 2). Expressed as present value over 2025-2050, they are estimated at EUR 0.1 to 0.3 million.  

Enforcement costs savings for flag State administrations. Enforcement costs savings relative to the baseline 
are  driven  by  one  common  policy  measure  included  in  all  options,  related  to  the  implementation  of  the 
technical  solutions  for  e-certificate  registry,  reporting  of  e-certificates  and  e-Flag  State  inspection  reports 
(PM5). The implementation of an e-certification registry system allows for easier access and more flexible 
case management, as well as improved availability of ship data and performance data89. The number of EU 
flagged ships not covered by the e-certification registry system in the baseline, that would need to implement 
it, is estimated at 4,139 in 2030 and 5,509 in 2050. The e-certification registry is assumed to be implemented 
in  2025  but  the  cost  savings  would  occur  starting  from  2026  onwards.  They  are  estimated  at  EUR  0.14 
million  in  2030  and  EUR  0.18  million  in  2050  in  all  policy  options.  The  reporting  of  e-certificates  has  a 
positive effect on the operations of the flag State administrations by improving processes - both internal for 
the administration and external for customers and end-users. The system makes the process more efficient 
with  less  documentation  requirements,  and  allows  for  better  accessibility  and  ownership  of  data  and 
certificates  for  the  users90.  The  number  of  certificates  needed  by  EU-flagged  vessels  that  do  not  use  e-
certificates in the baseline are projected at 82,780 in 2030 and 112,180 in 2050. Thus, the costs savings due to 
the implementation of e-certificates are estimated at EUR 2.2 million in 2030 and EUR 3 million in 2050 in 
all policy options. For the e-FS inspection reports, the calculation of the enforcement costs savings for the 
flag  State  administrations  draws  on  the  number  of  flag  State  inspections  performed  per  year91,  which  is 
different between policy  options when also considering  the synergies with PM10 and PM11a (included in 
PO2 and PO3, respectively).  Enforcement costs savings due to e-Flag State inspection reports  in PO1 and 
PO4 are estimated at EUR 0.16 to 0.32 million in 2030 and EUR 0.22 to 0.44 million in 2050. In PO2, the 
costs savings are estimated at EUR 0.22 to 0.43 million in 2030 and EUR 0.29 to 0.59 million in 2050, while 
in PO3 they are estimated at EUR 0.17 to 0.35 million in 2030 and EUR 0.23 to 0.47 million in 2050.  Total 
enforcement costs savings (see Table 2) are estimated to be the highest in PO2 (EUR 2.6 to 2.8 million in 
2030 and EUR 3.5 to 3.8 million in 2050), followed by PO3 (EUR 2.5 to 2.7 million in 2030 and EUR 3.4 to 
3.7 million in 2050), and PO1 and PO4 (EUR 2.5 to 2.7 million in 2030 and EUR 3.4 to 3.6 million in 2050). 
Expressed as present value over 2025-2050, they are estimated at EUR 48.8 to 52.9 million in PO2, EUR 48 
to 51.3 million in PO3, and EUR 47.7 to 50.8 million in PO1 and PO4.  

Net  costs/costs  savings  for  flag  State  administrations.  The  net  costs/costs  savings  for  flag  State 
administrations for 2025, 2030 and 2050 relative to the baseline are provided in Table 2. Expressed as present 
value over 2025-2050, PO1 results in the largest costs savings (EUR 20.2 to 23.2 million), followed by PO4 
(EUR 19.8 to 22.7 million) and PO3 (EUR 0.1 to 3.3 million). For PO2, the estimated range is between EUR 
0.3 million costs to EUR 3.7 million costs savings.   

89 One of the flag State administrations implementing the system estimated that the time saving due to the e-certification 
registry is roughly 1.2 hours per year per ship. 
90 According to one of the flag State authorities that implement the system, reporting of e-certificates leads to cost savings 
of 1 hour per certificate per year. On average, each vessel needs around 20 certificates per year. 
91  Based  on  the  online  survey  conducted  among  flag  State  authorities,  the  implementation  of  the  e-FS  inspection  reports 
system could reduce the number of hours per inspection by 5% to 10%. An inspection takes on average 9.7 hours. Based on 
this  information,  a  reduction  of  0.5  (low)  to  1  (high)  hours  has  been  applied  relative  to  the  baseline  to  the  inspections 
performed by all flag State administrations, except for those that do not have an active register any longer. 

33 

 
 
                                                           
Impacts on the European Commission. PM3 (establish a flag State expert group to promote cooperation 
between the Member States and the European Commission) is expected to lead to adjustment costs for the 
European  Commission.  The  objective  of  PM3  is  to  create  a  mechanism  for  peer  learning  and  knowledge 
sharing.  The  average  cost  for  a  two-day  workshop  hosted  by  the  Commission,  is  around  EUR  30,000. 
Therefore, an expert group meeting once to twice a year would cost between EUR 30,000 and EUR 60,000. 
The  recurrent  adjustment  costs  for  the  Commission  to  implement  PM3  are  estimated  at  EUR  0.6  to  1.1 
million relative to the baseline, expressed as present value over 2025-2050. 

Impacts on EMSA. Three common policy measures, included in all policy options, are expected to lead to 
adjustment costs for EMSA (see Table 3): (i) the implementation of the technical solutions for e-certificate 
registry,  reporting  of  e-certificates  and  e-Flag  State  inspection  reports  (PM5);  (ii)  the  development  of  a 
mechanism  and  template  for  reporting  information  and  statistics  (PM6);  and  (iii)  introducing  common 
capacity  building  and  harmonised  training  (post-qualification)  for  Flag  State  inspectors/surveyors  /auditors 
(PM8). 

For PM5, no costs are foreseen for EMSA in relation to e-certification registry, as the Agency already has a 
functional  web-interface  that  is  used  by  the  ROs.  This  web-interface  will  also  be  used  for  the  flag  States 
reporting e-certificates. For the reporting of e-certificates, the proposed revision of the PSC Directive foresees 
the development and maintenance at EU level of a common system for use of electronic certificates across 
flag States and ROs for the use of PSC, as well as tools for validation and inspection. In PM5, EMSA would 
build  upon  this  system  allowing  flag  State  administrations  to  upload,  exchange,  validate  and  control  e-
certificates. The same system will also be used by the ROs. The development of the new module is estimated 
by EMSA to lead to one-off capital costs of EUR 250,000 in 2025, and maintenance costs of EUR 125,504 
per  year  (1  full  time  equivalent)  from  2025  onwards.  Expressed  as  present  value  over  2025-2050,  the 
adjustment  costs  for  EMSA  relative  to  the  baseline  are  estimated  at  EUR  2.6  million  of  which  EUR  0.3 
million one-off costs. 

Extending  the  e-Flag  State  inspection  report  to  all  EU  flagged  ships  would  require  setting  up  a  THETIS 
module  by  EMSA.  Building  on  the  experience  with  the  ro-pax  reporting  module  in  THETIS  (already 
enabling e-Flag State reports for ro-pax vessels), EMSA estimates one-off capital costs of EUR 100,000 in 
2025. By using the EMSA hosted systems, the exchange and sharing is already ensured; no extra costs are 
foreseen as all systems are already interoperable. Total adjustment costs for EMSA for implementing PM5 
are estimated at EUR 2.7 million expressed as present value over 2025-2050 (in 2021 prices), relative to the 
baseline, of which EUR 0.4 million one-off costs in 2025. 

PM6  will  be  based  on  the  Dynamic  Overview  of  National  Authorities  (DONA),  which  is  a  voluntary  e-
reporting system, hosted in EMSA, allowing reporting using pre-agreed templates. Further development of 
DONA for allowing reporting of information and statistics under the Directive, is estimated by EMSA to lead 
to one-off capital costs of EUR 150,000 in 2025. In terms of maintenance, EMSA has already established the 
Maritime Support Services (MSS) centre which is a 24/7 facility located at EMSA’s premises in Lisbon. The 
MSS offers round-the-clock support to ensure two main functions: the smooth running of EMSA’s maritime 
applications  and  providing  rapid  assistance  in  the  event  of  an  emergency  at  sea.  To  this  end,  the  MSS  is 
operated by staff with specialist IT skills and maritime knowledge. MSS can support any new tool in the same 
manner that it supports all other maritime applications developed by the Agency. It is estimated that EUR 
125,504 per year (1 full time equivalent) would be needed for maintenance of the tools from 2025 onwards. 
Total adjustment costs for EMSA for implementing PM6, relative to the baseline, are estimated at EUR 2.5 
million  expressed  as  present  value  over  2025-2050  (in  2021  prices),  of  which  one-off  costs  of  EUR  0.2 

34 

 
 
million. PM6 would provide benefits in terms of peer learning and knowledge sharing, and could provide 
tools for EMSA and the Commission to monitor the performance of the FS administrations. 

PM8  aims  at  promoting  capacity  building  and  harmonised  training  (post-qualification)  for  Flag  State 
inspectors/surveyors/auditors. Out of 14 flag State administrations that replied to the question on training in 
the context of the stakeholders’ consultation, 9 flag State administrations do not provide any training at all. 
The capacity building and harmonised training by EMSA would overcome this deficiency in these 9 Member 
States. In addition, capacity building and harmonised training by EMSA can provide significant synergies, by 
reducing  the  needs  to  have  a  dedicated  budget  for  training  in  each  Member  State92.  PM8  would  provide 
benefits in terms of a common core curricula for Flag State inspectors, which will in turn help to a common 
understanding and implementation of international/EU rules. Training of flag State inspectors (similar as for 
PSC officers) is foreseen on new technologies, including but not limited to renewable and low carbon fuels, 
which are particularly relevant in view of the “Fit for 55” package, and automation.  According to EMSA, the 
training costs are estimated at EUR 70,000 to 100,000 per year, including the reimbursement of participants. 
In  PM8  they  are  assumed  to  be  implemented  from  2025  onwards.  Total  adjustments  costs  for  EMSA  for 
implementing  PM8,  relative  to the baseline,  are  estimated  at  EUR 1.3 to 1.8 million  expressed  as  present 
value over 2025-2050 (in 2021 prices). 

Overall, the adjustment costs for EMSA are estimated at EUR 0.82 to 0.85 million in 2025 and EUR 0.32 to 
0.35 million in 2030 and 2050 in all policy options relative to the baseline. Expressed as present value over 
2025-2050, they are estimated at EUR 6.4 to 7 million relative to the baseline.  

Table 3: Costs for EMSA by policy option and measure relative to the baseline (in million EUR), in 2021 prices  

PO1 
2030 

2025 

2050 

2025 

PO2 
2030 

2050 

2025 

PO3 
2030 

2050 

2025 

PO4 
2030 

2050 

Difference to the Baseline 

Adjustment costs  

PM5 
PM6 
PM8 

0.48 
0.28 

0.13 
0.13 

0.13 
0.13 

0.48 
0.28 

0.13 
0.13 

0.13 
0.13 

0.48 
0.28 

0.13 
0.13 

0.13 
0.13 

0.48 
0.28 

0.13 
0.13 

0.13 
0.13 

Low 
High 

0.07 
0.10 
Source: VVA et al. (2023), Impact assessment support study 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

0.07 
0.10 

6.1.2.  Impacts on ship operators 

Adjustment  costs  savings  for ship operators.  All policy  options  result  in  adjustment  costs savings  for ship 
operators  due  to  the  implementation  of  the  technical  solutions  for  e-Flag  State  inspection  reports  (PM5). 
Shipowner  organisations  interviewed  acknowledged  that  introducing  digital  solutions  can  reduce  the 
adjustment costs for ship operators and their crews. In particular, the e-Flag State inspection report system 
would  reduce the  waiting time  for the vessels  being inspected  (i.e.  the  cooperation time  foreseen  for  Flag 
State  inspections).  Waiting  time  could  be  reduced  by  0.1  (low)  to  0.2  (high)  hours  per  vessel  inspected 
relative to the baseline93. The cost of waiting per hour for vessels is estimated at EUR 103.8 (in 2021 prices)94 

92  PM8  may  however  add  on  top  of  existing  training  courses  provided  by  Member  States,  if  Member  States  desire  to 
continue so. This measure aims at promoting additional knowledge sharing and peer learning. 
93 The waiting time per vessel inspected is estimated at 2 hours in the baseline. Following the stakeholders’ feedback, the 
implementation of digital solutions would reduce the waiting time per vessel by 5 to 10%.  

35 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                           
and  is  assumed  to  remain  constant  over  time  in  real  prices.  The  e-Flag  State  inspection  report  system  is 
assumed  to  be  implemented  in  2025  but  the  cost  savings  would  occur  starting  from  2026  onwards.  The 
calculation of the adjustment costs savings draws on the number of flag State inspections performed per year, 
which  is  different  between  policy  options  when  also  considering  the  synergies  with  PM10  and  PM11a 
(included in PO2 and PO3, respectively). The costs savings for ship operators by policy option for 2030 and 
2050, relative to the baseline, are provided in Table 4. Expressed as present value over 2025-2050, they are 
estimated at EUR 0.6 to 1.2 million in PO2, EUR 0.5 to 1 million in PO3 and EUR 0.4 to 0.9 million in PO1 
and PO4. More detailed explanations on the assumptions used are provided in Annex 4.  

Adjustment costs for ship operators. PO2 and PO3 would lead to an increase in the adjustment costs for ship 
operators due to the additional number of inspections and thus the waiting time for the vessels being inspected 
(i.e. the cooperation time foreseen for Flag State inspections)95. For PO2, the additional number of inspections 
relative to the baseline is estimated at 734 in 2025, 769 in 2030 and 1,042 in 2050, while for PO3 at 166 in 
2025, 173 in 2030 and 233 in 2050. The adjustment costs for ship operators  for 2025, 2030 and 2050 are 
provided in Table 4. Expressed as present value over 2025-2050, they are estimated at EUR 3.2 million in 
PO2 and EUR 0.7 million in PO3. No additional costs are expected for PO1 and PO4.  

Net costs/costs savings for ship operators. The net costs/costs savings for ship operators for 2025, 2030 and 
2050 relative to the baseline are provided in Table 4. Expressed as present value over 2025-2050, PO2 results 
in net costs (EUR 2 to 2.6 million) and PO1 and PO4 in net costs savings (EUR 0.4 to 0.9 million). For PO3, 
the estimated range is between EUR 0.2 million costs to EUR 0.2 million costs savings.  

Table 4: Costs and costs savings for ship operators by policy option and measure relative to the baseline (in million 
EUR), in 2021 prices 

PO1 
2030 

2025 

2050 

2025 

Difference to the Baseline 
PO3 
2030 

PO2 
2030 

2050 

2025 

2050 

2025 

PO4 
2030 

2050 

Adjustment costs 
savings  
PM5 

Low 
High 

Adjustment costs  

PM10 
PM11a 

Net costs/costs savings    

0.00 
0.00 

0.02 
0.05 

0.03 
0.06 

0.00 
0.00 

0.03 
0.06 

0.04 
0.08 

0.00 
0.00 

0.03 
0.05 

0.03 
0.07 

0.00 
0.00 

0.02 
0.05 

0.03 
0.06 

0.15 

0.16 

0.22    

0.03 

0.04 

0.05    

Low 
High 

-0.03 
-0.06 
Source: VVA et al. (2023), Impact assessment  support study; Note: positive  numbers under the  category  ‘net costs/costs 
savings’ denote net costs and negative numbers denote costs savings. 

-0.02 
-0.05 

-0.03 
-0.06 

0.01 
-0.01 

0.01 
-0.02 

-0.02 
-0.05 

0.00 
0.00 

0.15 
0.15 

0.00 
0.00 

0.13 
0.10 

0.17 
0.13 

0.03 
0.03 

6.1.3.  Impacts on SMEs  

The initiative is not relevant for SMEs. As stated in Article  3 of the Flag State Directive, the Directive is 
applicable to “ships or craft flying the flag of a Member State falling within the scope of the relevant IMO 

94 Based on data  from the Netherlands Institute for Transport Policy Analysis, which provides a breakdown of main cost 
categories for maritime transport industry.  
95 The waiting time per vessel inspected is estimated at 2 hours in the baseline. 

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Conventions, and for which a certificate is required”, which refers to vessels of  300  gross tonnes (GT) or 
over, flying a flag of an EU Member State. These vessels tend to be international world merchant vessels, e.g. 
cargos  for  transatlantic  logistics,  or  dimension  alike.  Smaller  vessels,  e.g.  fishing  boats,  are  not  typically 
involved  in  international  trade  and  are  subject  to  national  certificates  that  fall  outside  the  scope  of  the 
Directive. Therefore, there is no impact on SMEs. 

6.1.4.  Digital by default  

All policy options will have a positive impact on the application of the 'digital by default' principle, introduced 
by the common measure on the implementation of the technical solutions for e-certificate registry, reporting 
of e-certificates and e-Flag State inspection reports (PM5), together with the development of a mechanism 
and template for reporting information and statistics (PM6). 

6.1.5.  Functioning of the internal market and competition 

Currently, the inspection level varies greatly among flag State administrations and this is expected to remain 
unchanged  in  the  baseline.  On  average,  24.1%  of  EU  Member  States  fleet  is  inspected.  13  flag  State 
administrations  inspect  less  than  24%  of  their  flagged  fleet96,  and  7  of  them  below  10%  of  their  flagged 
fleet97. Leaving too much discretion to Member States as flag States does not create, enable or enhance a level 
playing  field  between  shipowners  and  may  result  into  flag  hopping  based  on  avoidance  of  costs  for 
compliance (e.g. a repair cost required by one flag may not be required by another, as they would not have the 
capability  to  detect  it)  rather  than  quality  considerations.  At  the  end  of  the  day,  it  is  via  inspections, 
monitoring and control that a flag State can ensure the safety of its flagged fleet. 

All policy options are expected to have a positive impact on the functioning of the internal market, both by 
improving overall maritime safety for the benefit of freight customers and passengers throughout the Union 
and by ensuring that the same safety level applies throughout the Union. The positive impacts of PO3 and 
PO4 are expected to be higher than those of PO1, as PO1 ‘only’ prohibits the use of non-exclusive inspectors 
(PM9a) but does not specify what and how many inspections flag States should carry out. In PO2, the use of 
non-exclusive  inspectors  is  clarified  but  not  prohibited  (PM9b)  and  it  is  linked  to  a  measure  (PM10)  that 
ensures a fair share of flag State inspections among EU Member States. The positive impact of PO2 on the 
functioning of the internal market and competition is expected to be the highest among the four options due to 
the higher harmonisation effect brought by PM10. The transparency enabled by PM5 (digitalisation) in all 
policy options will support the ‘peer’ review and have a positive impact on the functioning of internal market 
and competition.   

6.1.6.  Impacts on competitiveness 

As explained in section 6.1.2, all policy options are expected to result in adjustment costs savings for ship 
operators  while  PO2  and  PO3  would  also  lead  to  some  adjustment  costs  due  to  the  higher  number  of 
inspections  relative  to  the  baseline  and  thus  the  waiting  time  for  the  vessels  being  inspected  (i.e.  the 
cooperation time foreseen for Flag State inspections). Overall, annual net costs/costs savings are below EUR 
0.2 million at EU level for all options. Expressed as present value over 2025-2050, PO2 results in net costs 
(EUR  2  to  2.6  million)  and  PO1  and  PO4  in  net  costs  savings  (EUR  0.4  to  0.9  million).  For  PO3,  the 

96 BE (22%), DK (24%), DE (1%), EE (0%), EL (17%), FR (20%), HR (5%), IT (6%), NL (12%), PT (0%), RO (0%), FI 
(5%) and SE (20%).   
97 DE (1%), EE (0%), HR (5%), IT (6%), PT (0%), RO (0%), FI (5%). 

37 

 
 
                                                           
estimated range is between EUR 0.2 million costs to EUR 0.2 million costs savings. All options may also 
result in a decreased number of port State control detentions (or even inspections), although not possible to 
assess quantitatively. Therefore, it can be concluded that none of the policy options has a significant impact 
on the competitiveness of ship operators, considering that annual net costs/costs savings are below EUR 0.2 
million at EU level in all options.  

6.2. 

Social impacts 

Social impacts are mainly assessed in terms of impacts of the policy options on maritime safety (in terms of 
lives saved and injuries avoided), working conditions and fundamental rights. Costs impacts for consumers 
from any of the policy options have not proved quantifiable but are expected to be negligible.  

6.2.1.  Maritime safety  

As the findings of ship inspections and RO monitoring have to be followed-up and deficiencies rectified for 
the  vessel  to  maintain  its  certificates,  inspections  are  expected  to  lead  to  a  reduction  in  the  number  of 
deficiencies and thereby to improve safety and environmental performance. All such actions aim to ensure 
that  the  EU  Member  States  flagged  fleet  is  fit  for  purpose.  If  the  flag  State  inspections  are  done  in  a 
harmonised and adequate manner, this should also lead to a reduction in PSC detentions (even inspections). 
This  is  because  the  flags  ensure  better  compliance  with  the  rules  that  acts  as  quality  check.  The  EU  RO 
monitoring oversight (PM7), included in all options, also allows Member States to share findings identified in 
such  monitoring  in  a  systematic  manner  and,  as  a  consequence,  provide  higher  leverage  towards  ROs  in 
taking corrective action. The transparency enabled by sharing e-Flag State inspection reports and e-certificates 
allows inspectors, both flag State or PSC inspectors, to have more complete information for their assessment 
in selecting or preparing inspections, enabling more targeted and focussed work and use of scarce resources. 

This should result in a reduction in the number of marine casualties and thus of lives lost and injuries. PO2 is 
estimated to lead to the highest impact in terms of number of lives saved and injuries avoided during 2025-
2050 (69 lives saved and 810 injuries avoided relative to the baseline), followed by PO3 (11 lives saved and 
180 injuries avoided) and PO4 (0 lives saved and 16 injuries avoided)98. The impact of PO1 is expected to be 
positive  although  more  limited,  driven  by  the  EU  Oversight  programme  of  flagged  fleet  and  RO’s.  The 
impact of the EU Oversight programme of flagged fleet and RO’s (included in all options) on the lives lost 
and injuries avoided was not possible to quantify.  

Thus,  all  policy  options  contribute  towards  Sustainable  Development  Goal  3  (“Ensure  healthy  lives  and 
promote well-being for all at all ages”), with the highest contribution provided by PO2. All policy options are 
estimated  to  result  in  a  reduction  in  the  external  costs  of  accidents  relative  to  the  baseline  (see  Table  5) 

98  In  the  context  of  the  PSC  impact  assessment  support  study  a  log-log  relationship  between  the  number  of  inspections 
conducted in year t and the number of marine casualties in year t+2 has been estimated. The elasticity has been estimated at 
-1.031 meaning that “a 1% increase in inspections in year t reduces the number of marine casualties in year 2 by 1.031%”. 
However, as the number of ship deficiencies decreases over time, it is expected that the impact on marine casualties and 
thus on the number of fatalities and injuries avoided would also decrease over time. Therefore, it has been assumed that the 
elasticity  decreases  in  a  non-linear  way  by  2050,  the  impacts  being  significantly  smaller  post-2040  (at  less  than  0.2%). 
More explanations are provided in Annex 4. 

38 

 
 
                                                           
although the impact would be the highest in PO2 (EUR 2.4 billion, expressed as present value over 2025-
2050), followed by PO3 (EUR 0.5 billion), PO4 (EUR 0.05 billion) and PO1 (positive but not quantified)99.  

Table 5: Reduction in the external costs of accidents, present value over 2025-2050 (in million EUR), in 2021 prices 

Total fatalities and injuries 

Fatalities 
Injuries 

Baseline 

Difference to the Baseline 

4,664 
1,627 
3,037 

PO1 

+ 
+ 
+ 

PO2 

2,397 
187 
2,210 

PO3 

522 
33 
489 

PO4 

46 
0 
46 

Source: VVA et al. (2023), Impact assessment support study; Note: ‘+’ stands for a positive impact that was however not 
possible to quantify. The measure leading to this positive impact is included in all options.   

It  should  be  noted  however  that  there  is  high  uncertainty  regarding  these  estimates.  This  is  because  the 
impacts of the Directive on safety are indirect, through inspections that are aimed to address ship deficiencies 
and work in a preventive way. For this reason, a sensitivity analysis has been performed, assuming 10% and 
15% lower value in absolute terms of the elasticity used to derive the impacts. Table 6 shows that even with 
lower value of the elasticity PO2, PO3 and PO4 are projected to result in lives saved and injuries avoided, 
although the positive impacts on safety would be more limited.  

Table 6: Results of the sensitivity analysis on the reduction in the external costs of accidents, expressed as present 
value over 2025-2050 (in million EUR) relative to the baseline 

Reduction in external costs of accidents (in million EUR) 

Elasticity - central case 
Elasticity - 10% lower 
Elasticity - 15% lower 

PO1 

+ 

+ 
+ 

Difference to the Baseline 
PO3 

PO2 

2,397 

2,163 
2,042 

522 

479 
454 

PO4 

46 

39 
33 

Source: VVA et al. (2023), Impact assessment support study; Note: ‘+’ stands for a positive impact that was however not 
possible to quantify. The measure leading to this positive impact is included in all options. 

6.2.2.  Impacts on working conditions and skills 

The impact of the policy options on working conditions is expected to be positive, although it has not been 
possible to quantify it. By improving safety, the policy options will result in saved lives (of persons on board 
but in particular of crew), avoid injuries and improve the attractiveness of employment in the sector.  

The impact is expected to be higher in PO2, followed by PO3, PO4 and PO1. In addition, the knowledge 
sharing  and  training  organised  by  EMSA  will  improve  the  skills  of  flag  State  inspectors  in  light  of  new 
developments which may be relevant for such inspections in the future, including but not limited to renewable 
and low carbon fuels, automation and autonomous shipping, if and when they are included among statutory 
tasks in the international conventions e.g. SOLAS and MARPOL with responsibilities on the flag State.  

99 The 2019 Handbook on the external costs of transport has been used to monetise the costs. According to the Handbook, 
the external costs of a fatality in 2021 prices is estimated at around EUR 3.6 million and that of an injury at around EUR 0.5 
million.  

39 

 
 
  
  
  
  
  
  
                                                           
6.2.3.  Impacts on fundamental rights  

The policy options were assessed to determine if they have an impact on the fundamental rights and/or equal 
treatment  of  EU  citizens.  The  starting  point  of  the  assessment  of  the  fundamental  rights  is  the  Charter  of 
Fundamental  Rights  of  the  European  Union100.  All  POs  were  assessed  having  regard  to  the  relevant  EU 
instrument and it was concluded that they maintain full respect for human and fundamental rights and none 
will have any negative impact thereon. 

6.3.  Environmental impacts 

The  impact  of  the  policy  options  on  the  environment  is  also  an  indirect  one.  It  depends  on  the  flag  State 
inspections, as explained in section 6.2.1, that are expected to lead to a higher level of compliance over time 
and a reduction in accidents and pollution. The EU RO monitoring oversight programme (PM7), included in 
all options, also allows Member States to share findings identified in such monitoring in a systematic manner 
and, as a consequence, provide higher leverage towards ROs in taking corrective action. The environmental 
impact of maritime casualties derives from ships sinking, cargoes lost and oil spills (either as cargo or from 
bunker fuels). While there has not been a  single  significant oil spill similar to  that  of the  Erika  (1999) or 
Prestige (2002) accidents in EU waters for almost 20 years, the possibility of such an incident is nonetheless 
present and has to be mitigated against. Similarly and in the context of the European Green Deal and the “Fit 
for 55” package, it is likely that there will be a significant change in ship propulsion and fuels used in the 
coming decades. This will have implications for the entire shipping industry and can be expected to have an 
impact on the way flag State inspections are conducted. 

Furthermore,  13  cases  of  pollution  due  to  bunker  fuel  lost  were  recorded  in  2019  for  EU  Member  States 
flagged vessels. In the baseline scenario, the cumulative number of tonnes of bunker fuels lost between 2025 
and 2050 is estimated at 14.9 thousand. PO2 would result in 1,418 tonnes of bunker fuel lost avoided during 
2025-2050 relative to the baseline, followed by PO3 (321 tonnes of bunker fuel lost avoided) and PO4 (31 
tonnes  of  bunker  fuel lost avoided).  The  impact of  PO1 is  expected  to  be  positive  although  more limited, 
driven by the EU Oversight programme of flagged fleet and RO’s101. This is expected to positively impact on 
the  quality  of  marine  water  and  on  biodiversity.  Thus,  all  policy  options  contribute  towards  Sustainable 
Development Goal 14 (“Conserve and sustainably use the oceans, seas and marine resources for sustainable 
development”), although the positive impact of PO2 is the highest.  

No significant harm is expected on the environment in any of the policy options, in particular in the area of 
sustainable use and protection of water and marine resources to which the initiative relates. On the contrary, 
as explained above, all policy options are expected to have small positive impacts on the quality of water and 
biodiversity – with the highest impact among the three projected in PO2. All policy options are consistent 
with the environmental objectives of the European Green Deal and the European Climate Law102. 

100 OJ C 326 of 26.10.2012 p.2 
101 The impact of the EU Oversight programme of flagged fleet and RO’s (included in all options) on the tonnes of bunker 
fuels lost avoided was not possible to quantify. 
102 Regulation(EU) 2021/1119 

40 

 
 
                                                           
7.  HOW DO THE OPTIONS COMPARE? 

7.1.  Effectiveness 

The assessment of effectiveness looks at the extent to which the general and specific objectives (SO) of the 
intervention,  as  previously  described,  are  met.  Table  7  provides  the  link  between  policy  objectives  and 
assessment criteria. More detailed explanations are provided in Annex 16.  

Specific objective 
SO1 - Align the Flag State Directive 
with new international rules 
SO2 – Ensure adequate inspections 
and monitoring/oversight 

Table 7: Link between objectives and assessment criteria 
General objectives 
The general objectives 
are: (i) to maintain a level 
playing field and avoid 
market distortions, (ii) to 
ensure high levels of 
maritime safety (iii) to 
ensure prevention of 
maritime pollution 

SO3 - Ensure higher uptake of digital 
solutions 

SO4 - Ensure a harmonised approach 
in the understanding, reporting and 
measuring performance of flag State 
fleets and duties 

Assessment criteria  

Expected improvement in clarity and functioning of 
the internal market 
Changes in the number of fatalities and injuries 
involving EU Member States flagged vessels 
Changes in the number of tonnes of bunker fuel lost 
at sea involving EU Member States flagged vessels103 
Percentage of fleet inspected per year split by 
exclusive and non-exclusive staff 
Number of EU-flagged vessels covered by the e-
certificate registry system  
Number of e-certificates for EU-flagged vessels  
Number of inspections that would benefit of the e-FS 
inspection reports system 
Increased compliance and convergence in the 
application of the rules between EU Member States 
flagged fleets  

Concerning SO1, all policy options ensure full alignment of the Directive with the III-Code, including the 
IMO Audit. This will provide for a more consolidated reflection of the III-Code into the EU law, ’close’ any 
gaps  and  ensure  its  enforceability.  This  will  thereby  strengthen  the  safety  net  across  the  Union,  improve 
harmonisation and the functioning of the internal market. All four options are equally effective at achieving 
SO1. 

Concerning SO2, PO2  would be the most effective due to the specific requirements  regarding inspections 
commensurate with the size and type of fleet, combined with conditions on the use of non-statutory staff, with 
the largest positive effects on safety and protection of marine environment (69 lives saved and 810 injuries 
avoided; 1,418 tonnes of bunker fuel lost avoided during 2025-2050 relative to the baseline). PO2 is also the 
most balanced option in addressing SO2 in that it both strengthens the control and compliance while at the 
same  time  it  does  not  deter  the  use  of  non-statutory  staff.  The  flag  State  administrations  are  in  favour  of 
having some flexibility and focusing on the quality of the work rather than on the status of the person doing 

103 The indicator ‘tonnes of bunker fuel lost at sea’, that are also measurable, was chosen as the whole approach is about 
preventive action and illustrative of the severity of pollution and damage to the environment, while the indicator ‘number of 
fatalities’ for the human dimension of the accidents, when they happen. The underlying logic in the FS Directive is that a 
better oversight of the fleet protects against the risk posed by substandard ships flagged in the EU and hence is expected to 
lead to a reduction in the number of accidents/incidents. In particular, they capture the impacts of most measures that are 
different between options, related to the frequency of flag State inspections and surveys. 

41 

 
 
 
 
 
                                                           
the  work.  PO3  is  less  effective  than  PO2  in  addressing  SO2,  resulting  in  11  lives  saved  and  180  injuries 
avoided, and 321 tonnes of bunker fuel lost avoided during 2025-2050 relative to the baseline. PO3 requires 
flag State administrations to do the International Safety Management (ISM) audit and issue ISM Certificates, 
combined with a number of inspections to be performed. It however also prevents the use of  non-statutory 
staff which provides less flexibility for flag State administrations. PO4 and PO1 are less effective than both 
PO2 and PO3 in achieving SO2. They also offer less flexibility for flag State administrations with regard to 
non-statutory staff.   

Concerning SO3, PO2 and PO3 are the most effective in terms of enforcement costs savings for flag State 
authorities due to the uptake of digital solutions (EUR 48.8 to 52.9 million savings relative to the baseline, 
expressed  as  present  value  over  2025-2050,  for  PO2,  and  EUR  48  to  51.3  million  savings  relative  to  the 
baseline for PO3). PO1 and PO4 are slightly less effective than PO2 and PO3  (EUR 47.7 to 50.8 million 
savings relative to the baseline). The difference between the options in terms of enforcement costs savings 
stems from the synergies between the measures on digitalisation and other measures included in the options 
that contribute towards SO2 (i.e. requirements regarding inspections commensurate with the size and type of 
fleet included in PO2 and the requirement to do the International Safety Management audit and issue ISM 
Certificates,  combined  with  a  number  of  inspections  to  be  performed,  included  in  PO3).  Requiring  the 
reporting, sharing and use of electronic certificates allows increased efficiency both for flag State inspectors 
and port State  control inspectors  performing inspections on board  of the  ships. With regard to  adjustment 
costs savings for ship operators due to the uptake of digital solutions, PO2 is slightly more effective than PO1, 
PO3 and PO4 (costs savings are estimated at EUR 0.6 to 1.2 million in PO2, EUR 0.5 to 1 million in PO3 and 
EUR 0.4 to 0.9 million in PO1 and PO4). Again, the difference between the options stems from the synergies 
between the measures on digitalisation and other measures included in the options that contribute towards 
SO2.  

Concerning SO4, all policy options require the establishment of a flag State expert group, comprising MS 
experts  involved  in  inspections  of  the  flagged  fleet  and  monitoring  of  RO’s,  that  will  be  instrumental  in 
developing the EU oversight programme, the reporting (what and how) from such work, the discussion of the 
results of such work and, where needed, adjustments to the common training programme (post qualification). 
The  group  and  the  MS  experts  will  benefit  from  the  digital  solutions  and  the  sharing  of  information  for 
focused inspections, possibly even sharing of burden and use of expertise across MS. The modernisation of 
the  way  to  measure  performance  of  flag  States,  enabling  continuous  improvement  is  also  common  across 
options, contributing to meeting SO4. That also allows for transparency and a certain peer review. It will (as 
the experience with port State control shows) lead to better understanding of the rules and more harmonised 
approach so that in the end it should not matter, from a safety point of view, under which EU MS flag a ship 
sails. They should all be subjected to the same control and ensure compliance, leading to quality shipping. All 
four options are equally effective at achieving SO4. 

With regard to expected synergies or complementarity with the parallel initiatives on port State control and 
accident investigations – these are explicit in their complementary set up (as required under international law) 
given that inspections in the context of FS Directive can only be performed on the Member State own flag 
whereas under port State control they cover all flags but the own flag. If EU Member States can (using digital 

42 

 
 
tools) better police their own flagged fleet and better follow up on negative findings from port State control 
inspections of their flagged ships they should be able to improve quality and safety104.   

Furthermore, for the digitalisation measures, there are clear synergies in that one and the same IT system, 
hosted in EMSA and in part already operational, will be used for sharing the relevant reports stemming both 
from the FS Directive and port State control Directive, and thereby enrich both. This ensures complementarity 
and  allow  for  increased  efficiency  in  preparing  for  and  executing  any  type  of  inspection  as  well  as  more 
pertinent information, both port and flag State reports, on which to base monitoring of flagged fleet and any 
RO working on behalf of the flag State. 

7.2.  Efficiency 

Efficiency  concerns  "the  extent  to  which  objectives  can  be  achieved  for  a  given  level  of  resource/at  least 
cost". The major costs of the policy options come in the form of adjustment costs for flag State authorities and 
for EMSA. They are summarised in Table 8 below. 

PO2 leads to the highest total costs among the four policy options, estimated at EUR 59.2 to 60.5 million in 
addition to the baseline costs, expressed as present value over 2025-2050. The highest total costs in PO2 are 
the adjustment costs for flag State authorities, followed by the adjustment costs for EMSA. Around 54% of 
the  adjustment  costs  for  flag  State  authorities  are  linked  to  the  specific  requirement  regarding  inspections 
commensurate  with  the  size  and  type  of  fleet,  and  46%  with  the  implementation  of  digital  solutions  (see 
section 6.1.1). The adjustment costs for EMSA are linked to the implementation of digital solutions, capacity 
building and harmonised training (post-qualification) for Flag State inspectors/surveyors/auditors and are the 
same  in  all  options.  PO3  shows  slightly  lower  costs  than  PO2,  estimated  at  EUR  55.5  to  56.8  million  in 
addition to the baseline costs, expressed as present value over 2025-2050. The highest cost categories are the 
same  as  in  PO2.  Around  47%  of  the  adjustment  costs  for  flag  State  authorities  are  linked  to  the 
implementation  of  digital  solutions,  43%  of  the  costs  with  the  requirement  to  do  the  International  Safety 
Management audit, combined with a number of FS inspections to be performed, and 10% with the measure 
preventing the use of non-exclusive technical staff (see section 6.1.1). PO4 and PO1 show lower total costs, 
estimated at EUR 34.9 to 36.1 million in addition to the baseline costs for PO4 and EUR 34.5 to 35.7 million 
for PO1.  

Table 8: Summary of costs and benefits of policy options – present value for 2025-2050 compared to the baseline (in 
million EUR), in 2021 prices 

PO1 

Difference to the Baseline 
PO2 

PO3 

PO4 

Flag State administrations 

Adjustment costs  
Enforcement costs 
Enforcement costs 
savings 
EMSA  
Adjustment costs 
European Commission   
Adjustment costs  

27.4 
0.1-0.3 

48.9 
0.1-0.3 

47.7-50.8 

48.8-52.9 

6.4-7.0 

0.6-1.1 

6.4-7.0 

0.6-1.1 

47.7 
0.1-0.3 

48-51.3 

6.4-7.0 

0.6-1.1 

27.8 
0.1-0.3 

47.7-50.8 

6.4-7.0 

0.6-1.1 

104 In addition, the initiatives on port State control and accident investigations also cover fishing vessels which are beyond 
the current scope of the flag State Directive and its proposed revision. 

43 

 
 
  
                                                           
PO1 

Difference to the Baseline 
PO2 

PO3 

PO4 

3.2 

0.4-0.9 

Ship operators  
Adjustment costs 
Adjustment costs 
savings  
Reduction in external costs of accidents  
45.9 
Fatalities and injuries 
34.9-36.1 
Total costs 
94.1-97.6 
Total benefits 
59.2-61.5 
Net benefits 
Benefit to cost ratio 
2.7-2.7 
Source: VVA et al. (2023), Impact assessment support study; Note: ‘+’ stands for a positive impact that was however not 
possible to quantify. The measure leading to this positive impact is included in all options. 

2,397.3 
59.2-60.5 
2,446.7-2,451.4 
2,387.4-2,390.9 
41.3-40.5 

522.4 
55.5-56.8 
570.8-574.6 
515.3-517.8 
10.3-10.1 

+ 
34.5-35.7 
48.2-51.7 
13.7-16.0 
1.4-1.4 

0.4-0.9 

0.6-1.2 

0.5-1 

0.7 

In terms of total benefits, PO2 shows the highest benefits among the four policy options mainly due to the 
reduction in the external costs of accidents. Total benefits, including enforcement costs savings for flag State 
authorities and adjustment costs savings for ship operators, are estimated at EUR 2,446.7 to 2,451.4 million 
relative  to  the  baseline,  expressed  as  present  value  over  2025-2050.  PO3  shows  lower  benefits  than  PO2, 
estimated at EUR 570.8 to 574.6 million, while PO1 is estimated to result in the lowest benefits of the four 
options (EUR 48.2 to 51.7 million). The impact of the avoided pollution due to the tonnes of bunker fuel lost 
has not been monetised but also in this case the highest benefits are projected in PO2, as shown in section 6.3.  

All  policy  options  result in net benefits. The net benefits  are largest  in  PO2,  estimated  at  EUR  2,387.4 to 
2,390.9 million relative to the baseline, expressed as present value over 2025-2050, followed by PO3 (EUR 
515.3 to 517.8 million), PO4 (EUR 59.2 to 61.5 million) and PO1 (EUR 13.7 to 16 million). PO2 also shows 
higher benefits to costs ratio (41.3 to 40.5) relative to PO3 (10.3 to 10.1), PO4 (around 2.7) and PO1 (around 
1.4).  

Considering  the  sensitivity  analysis  on  the  impacts  of  the  policy  options  on  external  costs  of  accidents, 
provided in section 6.2.1, the net benefits and the benefit to cost ratio have been calculated for each case and 
are provided in Table 9. The table shows that even with lower values of the elasticity, all policy options would 
still result in net benefits and PO2 would result in the highest benefit to cost ratio, followed by PO3.  

Table 9: Results of the sensitivity anaysis on net benefits and benefit to cost ratio of policy options  

PO1 

Difference to the Baseline 
PO3 
PO2 

PO4 

Net benefits (in million 
EUR)  

Elasticity - central case 
Elasticity - 10% lower 
Elasticity - 15% lower 

Benefit to cost ratio 

Elasticity - central case 
Elasticity - 10% lower 
Elasticity - 15% lower 

13.7-16.0 
13.7-16.0 
13.7-16.0 

2,387.4-2,390.9 
2,153.4-2,156.9 
2,031.7-2,035.2 

1.4-1.4 
1.4-1.4 
1.4-1.4 

41.3-40.5 
37.4-36.7 
35.3-34.7 

515.3-517.8 
471.9-474.4 
446.9-449.4 

10.3-10.1 
9.5-9.4 
9-8.9 

59.2-61.5 
52.1-54.4 
46.2-48.5 

2.7-2.7 
2.5-2.5 
2.3-2.3 

Source: VVA et al. (2023), Impact assessment support study 

44 

 
 
  
 
 
  
  
  
  
  
  
  
  
 
7.3.  Coherence 

Internal coherence. The internal coherence concentrates on how the different elements within the Directive 
work together to achieve the objectives. It should be noted that this does not only concern the Directive itself, 
but also its accompanying secondary legislation (delegated and/or implementing acts) and rules as well as 
guidelines. Although  all policy options address the identified problems, they  do so in different ways. PO1 
addresses the problems and objectives in such a way that room for flexibility remains, meaning that while 
there  is  alignment  with  the  international  instruments  the  approach  for  inspections  is  left  to  the  MS,  but 
prohibits  the use of non-exclusive staff. PO2  allows similar  flexibility  but  requires some  harmonisation  in 
terms of requirements for inspections to be commensurate with the size and type of flagged fleet. PO3 and 
PO4  would  require  Member  States  to  ‘take  back’  some  statutory  surveys,  to  be  carried  out  directly  by 
exclusive flag State experts. This ensures a better control for any vessel wishing to transfer into the flag. All 
options ensure internal coherence.  

External coherence. The external coherence concentrates on the compliance of the Directive with key EU 
policy objectives and international legislation these are explicit in their complementary set up (as required 
under  international  law).  Revising  the  Directive  and  aligning  it  with  the  most  up-to-date  IMO  provisions 
ensures a modern harmonised approach.  

The main rationale is the obligation to respect the established structure of first and second line of defence, (as 
described  in  section  1  under  synergies  with  other  EU  policy  instruments)  involving  responsibilities  of  a 
Member State as flag State and port State respectively. That structure is laid down in by the United Nations 
Convention on the Law of the Sea (UNCLOS) and further detailed in the international conventions. Like all 
EU Member States, the Union itself is a party to UNCLOS, and therefore bound to respect it. As such, the 
FSD revision will be coherent with the revision of the PSC Directive as well as the Accident Investigation 
Directive and will continue to ensure consistency, as also required by the III-Code. As all policy options seek 
alignment with the current international legal regime, external coherence will be guaranteed in all options. 
Furthermore,  all  policy  options  are  consistent  with  other  EU  legislation  in  the  area  of  maritime  safety, 
including the legislation governing the use of Recognised Organisations. The use of ROs is a choice and not 
an obligation that a flag State may exercise. However, it does not shift any responsibility for the flagged fleet 
away from the flag State. Where the flag States retain statutory survey in full or in part, they are perfectly legit 
to do so under both the Flag State and RO legislation. 

Coherence  with  the  EU’s  high-level  objectives.  All  policy  options  are  in  line  with  the  EU’s  objectives  to 
ensure a safe, secure and efficient transport as set out in the Sustainable and Smart Mobility Strategy and 
contribute – although to different extents – to the milestone of bringing close to zero the death toll for all 
modes of transport in the EU by 2050. Similarly, all policy options are consistent with the specific Council 
conclusions on maritime transport of 2017 and 2020, respectively. Since damage to or involving ships could 
lead not only to loss of human lives, but also to severe pollution, ultimately all policy options are aligned with 
the environmental objectives of the European Green Deal – and contribute to the aim for ‘Zero Pollution for 
Air, Water and Soil Action Plan’. 

7.4. 

Subsidiarity and proportionality 

As  highlighted  in  section  3.2  there  is  a  clear  need  for  EU  action  on  all  the  problems  identified,  and  their 
drivers. There is a need for EU action to avoid a fragmented legal framework. The current Directive needs to 
fully incorporate and align with new international mandatory rules. In addition, weaknesses identified during 
IMO  audits  and  confirmed  during  the  stakeholders’  consultations  process  have  shown  that  flag  State 

45 

 
 
inspections and oversight are not always systematic or being carried out in the most efficient manner, notably 
as regards the use of electronic certificates. Member States individually are not able to tackle all the problems 
identified. As such, there is a need for the EU to act. As all policy options ensure harmonisation of the legal 
framework,  the subsidiarity  requirement  is  fulfilled.  In  any  event,  as  stated  in  section 3.2,  the principle of 
subsidiarity does not apply to areas subject to EU exclusive competence pursuant to Article 3(2) TFEU. 

In relation to proportionality, the objectives are achieved by improving the way that flag State inspections and 
RO monitoring are carried out to ensure compliance of flagged ships with requirements. That is the first line 
of  defence  in  maritime  safety.  PO2  contributes  to  the  objectives  through  specific  requirements  regarding 
inspections, commensurate with the size and type of fleet.  

All  policy  options  require  the  uptake  of  digital  solutions.  In  particular  the  requirement  for  flag  State 
administrations, or ROs on their behalf, to report and share electronic certificates provides an incentive for 
flag States to make the digital move.  This will also  enable synergies with the port State control, as it  will 
allow more information sharing and better preparation for inspections, and more efficient use of resources.  

During the stakeholder consultation, it became clear that resources, or rather shortage of resources, is an issue 
shared  across  Member  States  and  they  advocated  some  flexibility.  At  the  same  time  they  supported  the 
digitalisation  and  saw  it  as  a  pre-requisite  for  both  enhanced  monitoring  and  control,  and  for  ensuring 
competitiveness. The need for incorporating and fully aligning with the obligations now mandatory under the 
III-Code  was  not  questioned.  Stakeholders  welcomed  the  cooperation  measure  and  the  further  sharing  of 
information.  

8.  PREFERRED OPTION 

8.1. 

Identification of the preferred policy option and stakeholders views 

Although each of the options addresses the problems identified, their drivers and the specific objectives, some 
options are more effective in achieving the specific and general objectives. Based on the assessment done, all 
options are equally effective in addressing SO1 and SO4. PO2 is regarded as the most effective in addressing 
SO2, while PO2 and PO3 are equally effective in addressing SO3 and more effective than PO1 and PO4.   

With  respect  to  efficiency,  PO2  has  the  highest  additional  costs,  followed  by  PO3,  PO4  and  PO1.  When 
linking costs to benefits, PO2 also yields the highest benefits in terms of improving maritime safety and thus 
monetised benefits, in terms of enforcement cost savings for the flag State authorities and adjustment costs 
savings  for  ship  operators.  As  the  additional  benefits  outweigh  the  additional  costs  and  yield  the  highest 
benefit to cost ratio, PO2 is seen as the most efficient of the options proposed. None of the options leads to 
excessive costs in achieving the objectives set.  

All options ensure internal coherence. External coherence is guaranteed for all policy options as they all seek 
alignment with the current international legal regime. 

The  subsidiarity  requirement  is  fulfilled  for  all  options  as  they  all  ensure  harmonisation  of  the  legal 
framework. However, PO2 is seen as more measured105 and proportional than PO1, also in relation to the 

105 In the consultations Member States flag administrations listed a number of concerns as to the competitiveness of their 
flag. In the recent discussions for the sanctions measures in relation to the Russian invasion of Ukraine this has also been 
brought forward over and again. 

46 

 
 
                                                           
great variation in size and type of fleet among the EU Member States flagged fleet, while contributing more 
towards  the  objectives  than  PO3  and  PO4  as  increased  resources  do  not  automatically  mean  the  flag 
administrations will be able to attract and employ the right expertise. 

Stakeholder consultations showed that flag State administrations, who are directly affected by the FSD, are in 
favour of a clear, coherent and aligned legal framework that is incorporating and consolidating the mandatory 
international rules. Industry stakeholders had the same view. Flag State authorities are in favour of increasing 
the use of electronic certificates and for sharing them both with other EU Member State flags as well as with 
port State control. Flag State administrations and stakeholders also supported the areas identified for further 
harmonisation,  in  particular  when  it  comes  to  an  effective  EU  RO  oversight  programme  and  harmonised 
capacity building leading  to uniform flag State inspections, using EMSA as the vehicle, for enhanced and 
more common understanding. Many pointed out that this has already happened in port State control and flag 
State control should follow a similar path. At the same time the EU Member States with the biggest fleets (the 
top  6  flagged  fleet  making  up  71%  of  the  entire  EU  Member  States  flagged  fleet)  have  advocated  for  a 
measured approach to avoid creating a competitive disadvantage for their flags in the international context. 

On the basis of the analysis above, also considering the measured approach between upholding a quality fleet 
and costs involved, it can be concluded that PO2 is the preferred policy option.  

8.2.  REFIT  

This initiative is part of the Commission Work Programme 2021 under Annex II (REFIT initiatives), under 
the  heading  Promoting  our  European  Way  of  Life106.  It  has  an  important  REFIT  dimension  in  terms  of 
alignment and simplification of maritime safety legislation, and of enhanced assistance to Member States flag 
authorities to  effectively  and  consistently  discharge  their inspection  functions  and  hence their international 
law obligations, leading to improved compliance of flagged fleet.  

While  more  inspections  will  have  to  be  carried  out,  this  has  to  be  seen  against  the  simplification  and 
improvement that will accrue from the digitalisation of inspection reports and the reporting, use and sharing 
of electronic certificates. The preferred policy option results in enforcement costs savings for the flag State 
authorities estimated at EUR 48.8 to 52.9 million, expressed as present value over 2025-2050 relative to the 
baseline and adjustment costs savings of EUR 0.6 to 1.2 million for ship operators.  

The preferred policy option includes elements of simplification such as:   

  The provision by EMSA of assistance to flag State authorities with training on how to carry out flag State 
inspections in a more harmonised way, and the provision of a dedicated flag State inspection database to 
target and select vessels for inspection and to record and share the results of the flag State inspections. 
  EMSA  will  assist  Member  States  regarding  the  use  of  electronic  certificates.  This  will  involve  the 
provision of a common data model, a validation tool and sharing certificates (in the same way as for port 
State control). 

  EMSA training of flag State administrations staff on technological and regulatory developments as well as 
on issues arising from renewable and low carbon fuels and other developmens arising from the European 
Green Deal as well as issues arising from the enforcement of new international Conventions.  

106 COM(2020) 690 final  

47 

 
 
                                                           
8.3.  Application of the ‘one in, one out’ approach  

As explained in section 6.1.2, the preferred policy option is not expected to result in additional administrative 
costs for the private sector, or for the citizens. On the other hand, the uptake of digital solutions required by 
the  preferred  policy  option  is  expected  to  lead  to  adjustment  costs  savings  of  EUR  0.6  to  1.2  million, 
expressed as present value over 2025-2050 relative to the baseline, while the specific requirement regarding 
inspections commensurate with the size and type of fleet to adjustment costs of EUR 3.2 million. The net 
costs for the private sector are estimated at EUR 2 to 2.6 million, expressed as present value over 2025-2050 
relative to the baseline (in 2021 prices). The preferred policy option is also expected to result in benefits in 
terms of improved safety. The benefits in terms of improved safety overcompensate the costs for the industry 
(i.e. shipowners/operators).  

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

The  Commission  services  will  monitor  the  implementation  and  effectiveness  of  this  initiative  through  a 
number of actions and a set of core indicators that will measure progress towards achieving the operational 
objectives.  

Actions foreseen for verifying implementation include: 

-  Visits  to  Member  States  to  verify  operations  on  the  ground,  carried  out  by  EMSA  on  behalf  of  the 
Commission. The respective visits reports will identify any shortcomings and areas for improvement. 
-  Commission/EMSA  participation  as  observers  in  the  IMO,  complementary  to  EMSA’s  visits  and 
inspections on behalf of the Commission, including the horizontal analysis required107 to be carried out by 
EMSA (giving an indication of how the legislation is functioning and identifying gaps and what can be 
done to address them) and reported to the Commission and Member States (discussed in workshops). 

-  Establish the flag State expert group. 

The core set of indicators for monitoring the impacts of the initiative, linked to the operational objectives will 
include: 

Operational Objectives 

Indicators 

Ratification of IMO Instruments 

Number put into effect 

Source of data 

IMO GISIS 

Availability of adequate technical 
resources 

Number of technical staff 

EMSA DONA system 

Number of inspections 

Share of inspections for the MS flagged fleet 

Number of flag State inspectors/ship 

107 EMSA Regulation Article 3.5 

48 

 
 
                                                           
Outcome of flag State inspections/RO 
oversight 

Number of flag State inspection reports shared 

Use of findings 

Follow-up with ROs 

Safety recommendations 

Number of vessels accepted onto Flag registers 

Number  of  vessels  suspended  or  deleted  from 
Flag registers 

Take up of digitalisation 

Number of e-Certificates 

Indications from revised (Art 8.2) 
performance measurement system 

Number of e-Flag State reports 

As per performance measurement indicators 

Flag State module in THETIS 
system 

Flag State administrations 
reports 

Central Ship Database 

(data base hosted in EMSA) 

Flag State module in THETIS 
system (hosted in EMSA) 

performance measurement 
system 

49 

 
 
ANNEX 1: PROCEDURAL INFORMATION 

1. 

LEAD DG, DECIDE PLANNING/CWP REFERENCES 

The lead DG is DG MOVE, Unit D2: Maritime Safety 

DECIDE reference number: PLAN/2019/5434 

Item 36 in Annex II to Commission Work Programme 2021: Promoting our European Way of Life108. 

1.  ORGANISATION AND TIMING 

The  impact  assessment  follows the  ex-post  evaluation  of the  flag State  Directive  performed  as part  of  the 
overall maritime transport policy fitness check in 2018. The impact assessment started in 2020, with inception 
impact assessment published on 9 October 2020109. 

The impact assessment on a possible review of the Flag State Directive was coordinated by an Inter-Service 
Steering  Group (ISSG).  The Commission Services  participating  in the  ISG  are: Secretariat-General,  Legal 
Service, DG Maritime Affairs and Fisheries, DG Climate Action, DG Migration and Home Affairs, DG for 
Employment, Social Affairs and Inclusion, DG Industry, Entrepreneurship and SMEs, DG Environment, DG 
Health and Food Safety, DG Structural Reform Support, and the European Maritime Safety Agency (EMSA). 

The Inter-Service Steering Group met on 22 January 2021, 3 March 2021, 15 October 2021, 24 March 2022 
and  12  January  2023.  It  was  consulted  throughout  the  different  steps  of  the  impact  assessment  process: 
notably on all stakeholder consultation materials and deliverables from the external contractor and on the draft 
Staff Working Document.  

2.  CONSULTATION OF THE RSB 

The draft report was discussed by the Board on 15 February 2023, which issued a positive opinion with 
reservations. The Board asked that two main aspects are rectified in the final impact assessment report, 
which are explained in the table below:  

RSB recommendations 

Modification of the IA report 

(1)  The  scale  of  the  problems  is  not  sufficiently 
clear,  and  the  supporting  evidence  is  missing,  in 
particular concerning non-exclusive technical staff. 

(2) The report does not clearly present the key policy 
choices,  the  different  combinations  of  measures 

Section 2.1 has been further clarified. Further exmaples and 
supporting evidence has been included for problem 1. In Section 
2.2 the descrtiption of problem driver 2 has been further improved 
with evidence concerning non-exclusive technical staff. 
Furthermore a a new section discussing the level playing field 
aspect has been added to section 2.3. 
In  Section  5.1  futher  clarifications  have  been  included.  Table  1  in 
section 5.2  was improved to include also links to problem  drivers. 

108 COM(2020) 690 final  
109 Compliance with Flag State requirements (shipping) (europa.eu) 

50 

 
 
 
 
                                                           
regarding  inspections  and  how  these  compare  in 
terms of effectiveness. 

Additional inmformation  further explaining the difference between 
policy  measures  has  been  introduced.  In  section  7.1,  table  7  was 
reviewd  and  additional  assessemnt  criteria  introduced.  In  section 
7.3  the  external  choerence  was  further  clarified  and  improved  and 
Annex  14  updated.  A  new  text  section  was  introduced  explaining 
the synnergies and complimentarity between the  flag sate, the port 
State control and accident investigation intitiatives. 
Annex  15  was  moved  into  the  body  of  the  text  of  section  9  to 
provide further clarity. 

3.  EVIDENCE, SOURCES AND QUALITY 

The impact assessment is based on several sources, using both quantitative and qualitative data. This includes: 

  Ex-post evaluation of the flag State Directive 
  Maritime fitness Check 2018  
  Stakeholder consultation activities (see Annex 2) 
  External support study carried out by an independent consortium (lead by VVA, supported by WMU 

and admaris) 

  Commission’s experience in monitoring and implementing the Directive 
  Various Union wide data bases hosted and managed by EMSA. 

51 

 
 
 
 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION 

This annex provides a summary of the outcomes of the consultation activities which have been carried out for 
the review of Directive 2009/21/EC on compliance with flag State requirements, including in the context of 
the  external  support  study.  It  notes  the  range  of  stakeholders  consulted,  describes  the  main  consultation 
activities and provides a succinct analysis of their views and the main issues they raised. It is to be noted from 
the outset that the FSD addresses maritime administrations and the direct impact is on them as they have the 
obligation to ensure international rules and regulations are implemented and enforced. That is the premise of 
maritime safety and the first line of defence (as explained in section 1). 

The consultation strategy was developed from the start of the project and included as key stakeholders the 
following groups: Member States maritime authorities (both as flag and port States), third country flag State 
administrations,  IMO,  US  Coast  Guard,  Recognised  Organisations  (and  umbrella  organisation  IACS110), 
Shipowners (and umbrella organisation ECSA111), Ports (and umbrella organization ESPO112), Unions (e.g. 
ETF, European  Transport Workers  Association,  EuroPeche)  and individual  experts. The  work was  in  part 
done together with the consultations for the possible revision of the accident investigation Directive and the 
port State control Directive.  

The objective of the consultation activities were to collect information and opinions of stakeholders on the 
key problems and associated drivers, definition of relevant policy objectives linked to those problem areas 
and the identification, definition and screening of policy measures that could eventually be incorporated into 
policy options for this impact assessment report, as well as gather information and opinions on their likely 
impacts.  

1.  Overview of consultation activities 

Consultation activities have taken place since the publication of the Inception Impact Assessment in October 
2020 and continued until autumn 2022, with the bulk of consultations taking place in 2021. 

The main consultation activities included: 

-  Four scoping interviews were conducted between March and April 2021 with EU level representatives of 
key  stakeholders,  particularly  to  support  and  refine  the  overall  problem  definition  and  possible  policy 
options. 

-  Twenty three targeted interviews were carried out by the consultant in charge of the external support study 
to the Impact Assessment between April and September 2021, with the following stakeholder categories: 
national authorities (19), industry representatives (3), experts (1).   

-  A targeted survey was organised by the consultant in charge of the external support study to the Impact 
Assessment,  running  between  December  2021  and  February  2022,  addressing  both  national 
administrations and industry stakeholders categories. The survey included additional data requests on cost 
estimations. 

110 IACS, International Association of Classification Societies, https://iacs.org.uk/  
111 ECSA, European Community Shipowners’ Associations, https://www.ecsa.eu/  
112 ESPO, European Seaports organisation https://www.espo.be/  

52 

 
 
 
                                                           
-  An additional targeted request for data and statistics, especially as regards flag State inspectors and number 

of inspections was carried out in September 2022.  

-  A Workshop was organised on 18 February 2021 with EMSA, to gather an overview of performance of 
Member  State  flags,  data  available  on  flagged  fleet  etc.,  as  well  as  the  Agency’s  involvement  in  the 
implementation of the Directive. 

-  A  dedicated  Workshop  took  place  on  21  October  2021  with  Flag  State  administrations  (17)  and 
representatives  of  the  sector  (8)  –  ship  owners,  classification  societies,  ports  organisations,  workers’ 
representatives, which covered possible changes in measuring flag State performance (the paradigm shift 
in KPIs from fleet to governance).  

-  A  final  workshop  was  organised  on  20  January  2022.  The  event  was  divided  into  two  sessions  with 
different stakeholder groups – one with flag State authorities in the EU Member States (23 Member States 
represented) and one with maritime industry stakeholders. The workshop focused specifically on gathering 
views on the final version of policy measures, as well as on the assessment of the various impacts. 

-  Additional consultation activities organised by DG  MOVE and the consultant in charge of the external 
support study to the Impact Assessment in order to consult the Member States and key stakeholders by 
providing their views on the different policy measures but also to validate the emerging and final results of 
the support study to the Impact Assessment in terms of the quantification of the impacts. These activates 
took  place  in  the  context  of  an  informal  meeting  of  the  EU/EEA  Maritime  Transport  Directors  (30 
November 2021) and meetings of the EU Committee on Safe Seas and the Prevention of Pollution from 
Ships (17 May 2021, 11 November 2021 and 31 May 2022). All confirmed the need to align with IMO 
rules (III-Code).  

-  Bilateral discussions with both member States (DK) and Industry (IACS, ESPO, INTERTANKO113) in 
the autumn 2022 (August-October), at their request. They expressed overall support, mostly focussing on 
the digitalisation aspects and the need to include this in the preferred policy choice, but not via too strict 
‘standards’; IACS raised a concern regarding the approach to shift statutory surveys back to flag States (in 
terms of safety impact).  

The information collected from stakeholders was key in allowing the Commission to refine the design of the 
policy  options  as  well  as  to  assess  their  economic,  social  and  environmental  impacts,  compare  them  and 
determine  which  policy  option  is  likely  to  maximize  the  benefits/costs  ratio  for  the  society  and  fully 
contribute to achieving a measured but more effective and efficient flag State control ensuring compliance. 
The  consultations  also  supported  the  Commission  in  gauging  how  to  consider  a  measured  approach  that 
would maximize safety but minimize the risk of putting EU MS flags at a competitive disadvantage risking 
flagging out from EU MS flags to third country flags. 

Findings  from  those  processes  complemented  the  desk  research  carried  out  in  the  context  of  the  external 
support study. 

Limitations of the Stakeholder consultation 

Not all stakeholders were very responsive to the various targeted consultation activities (slow responses or 
incomplete  answers,  refusal  to  participate).  However,  since  all  relevant  stakeholder  groups  have  provided 
their  views  and  positions  to  the  various  targeted  consultations,  a  meaningful  comparison  and  analysis  of 
opinions gathered from all consultation activities was nevertheless possible.  

113 The International Association of Independent Tanker Owners, https://www.intertanko.com/  

53 

 
 
                                                           
Overall, 70% of the flag State administrations took part in at least one consultation activity. While this is not 
problematic for Austria and Slovakia which do not have a register or a flagged fleet, the fact that some large 
flag States such as Malta and Portugal have not provided, or only provided very limited, views or information 
related to the initiative, is a limitation. 

It was particularly difficult to gather input from stakeholders on costs, notably existing costs imposed by the 
application  of  the  Directive  –  since  this  is  often  not  disentangled  from  the  budget  allocated  to  Port  State 
Control or Accident Investigation - and possible expected costs of implementing the proposed measures. 

2.  Methodology  

A  mixed  methods  approach has  been  adopted  to  conduct  the  targeted  stakeholder  consultation  activities, 
which  have  taken  place  gradually  throughout  the  implementation  of  the  impact  assessment  support  study. 
This allowed to capture and fill in data gaps along the study process and ensure synergies and evidence-build 
up  for  the  different  study  tasks.  Methods  have  been  adapted  to  take  account  of  the  development  of  the 
COVID-19 pandemic. For this reason, interviews and meetings have been held by videoconference.  

It  is to be noted that  an  exemption  was  granted  from  carrying  out  an Open  Public Consultation (OPC) in 
relation  to  this  Impact  Assessment,  as  previous  experience  with  the  ex-post  evaluation  and  the  Maritime 
Fitness  Check  proved  that  such  a  technical  topic  would  yield  little  interest  from  the  general  public.  The 
general  public  was  nevertheless  offered  the  opportunity  to  provide  any  views  on  this  initiative,  via  an 
announcement on DG MOVE web page114 and a dedicated functional mailbox.  

One contribution was received from a shipowner association, which stated that it supported the initiative on 
flag State Directive as it aims to align with mandatory international rules but raised concerns as regards the 
approach  to  prohibit  the  use  of  non-exclusive  flag  State  inspectors/surveyors.  While  agreeing  such  staff 
should  have  no  conflict  of  interest,  never  do  any  statutory  work,  be  trained  and  fall  under  the  reporting 
requirements of the flag State, it argued that certain inspections could beneficially be performed by such staff, 
as it is not the status of staff that is important but the skills and quality of work they can provide. 

2.1. Feedback on the Inception Impact Assessment 

As  part  of  the  initial  feedback  mechanism,  stakeholders  had  the  opportunity  to  provide  feedback  on  the 
Inception Impact Assessment between 9 October 2020 and 20 November 2020. 4 replies were received from 
Member States (1), non-governmental organisation (1), workers’ representatives (1), business association (1). 

2.2. Targeted consultations115 

Targeted interviews were conducted and an online targeted survey was distributed. Both the interviews and 
the  survey  were  aimed  at a  range  of  relevant stakeholders  representing  public  authorities  and  other public 
bodies  (national  authorities  in  EU,  EEA  and  third  countries,  EU  and  international  bodies)  and  industry 
representatives (including relevant associations of shipowners, port operators and seafarers). The interviews 
and  surveys  focused  on  obtaining  detailed  input  on  the  expected  impacts  (economic,  social  and 
environmental) of the measures under consideration in comparison to the baseline, the possible issues that 

114 Maritime safety – three directives under review (europa.eu) 
115  An  effort  was  made  by  all  three  contractors  doing  the  IA  support  Studies  for  the  AID,  PSC  and  FSD  to  synchronise 
consultations and to avoid duplication where possible 

54 

 
 
                                                           
may arise and identifying the level of support for specific measures. Where relevant, stakeholders were asked 
for input on the cost implications of each measure.  

It is to be noted that out of the 27 EU Member States not all have a register or convention ships registered on 
their register. Overall, out of the 22 Member States with a register and fleet, 19 flag State administrations took 
part in the consultation through the targeted interviews, 21 attended the workshop on the performance criteria 
(paradigm shift) and all attended the final validation workshop (plus 1 Member State with no register).  

Table 10: Number of participating stakeholders 
Stakeholders 

Scoping 
interviews 

Targeted 
interviews 

Online 
survey 

Workshop on 
performance 
criteria 

Final validation workshop 

1 

3 

Flag State administrations 

Sector 
associations/industry 

International 
and EU agencies 

institutions 

Experts 

16 

6 

19 

3 

1 

1 

21 

10 

6 

1 

23 EU MS, US Coast Guard 
as well as IMO, all in all 38 
participants 

44 

6 

The full list of stakeholders consulted is included in the external support study116.  

3.  Analysis of the results of the stakeholder consultation 

The remainder of the annex presents the main findings from the analysis of stakeholder contributions to the 
consultation process. They are structured around the main elements of the intervention logic, including the 
problem  areas and  their  drivers, the policy  objectives  as well  as the key  aspects  of the  design  of possible 
policy measures. The technical support study for this Impact Assessment contains the detailed presentation of 
findings from the targeted consultation activities.  

3.1. Problem areas and policy objectives 

The  shortcomings  of  the  FSD  have  been  partly  raised  during  the  ex-post  evaluation  of  the  Directive. 
Therefore, the problems that the stakeholders face have been extensively discussed during the exploratory, 
targeted  interviews  and  in  the  targeted  survey.  In  addition,  the  main  part  relating  to  the  incorporation, 
consolidation  and  alignment  with  the  III-code  and  IMO  audit  was  subject  to  discussions  in  the  Council 
(Shipping working party) at the time (2013) of agreeing on a position in IMO when making the requirements 
mandatory  at  international  level.  It  should  also  be  recalled  that  all  EU  Member  States  as  flag  States  are 
members of  IMO  and participate in the  deliberations  in  IMO related to these issues; in fact  this has  been 
instrumental in developing the III-Code and IMO audit. They are also fully aware and discuss findings from 
the IMO audits performed. So there is nothing new being brought forward in these consultations other than 
the digitalisations aspects. 

116  VVA  et  al.  (2023),  Impact  assessment  support  study  concerning  possible  revision  of  Directive  2009/21/EC  on 
compliance with flag State requirements 

55 

 
 
 
 
 
 
 
                                                           
Respondents to the targeted survey showed to a large extent awareness of proposed measures and why they 
have been included  as possible solutions to address the identified  problems. The overall policy objectives, 
being the same at international, EU and national level, are also not new.  

In particular, flag State Administrations were consulted in order to grasp their understanding of the problems 
they face by being flag State and derived accepted actions to fulfil the goals of improving maritime safety and 
protecting the marine environment. 

Regarding the initiative’s intervention areas, Figure 6 below shows that the majority of the 18 Member States 
who have participated to the targeted interviews and replied to this question believe that the revision of the 
Flag State Directive should address (to be noted that the initial list of problem drivers as reflected in Figure 6 
was subsequently streamlined during the Impact Assessment process): 

-  the  lack  of  modernisation  and  lack  digitalisation  of  ship  registers  as  the  most  significant  amongst  the 
problem drivers identified, followed by  

- the obsolescence of the clause on IMSAS audit which includes the III-code and IMO Audit;  

- lack of training of FS inspectors, and; 

- purposeful control of flagged fleet and oversight of ROs.  

In the consultations, the representative from the IMO secretariat generally gave positive feedback, pointing 
out that key weaknesses among flag States as identified at the international level via the IMO-audits are the 
same as above. The U.S. Coast Guard generally provided positive feedback on the presented policy measures 
and options and highlighted the importance of alignment of EU rules at the international level. 

Figure 6: Problem drivers that the revision should address (N= 18 MS) 

Source: Stakeholders’ consultation- targeted interviews with Flag State administrations. PD 2 includes the III-code as the 
audit standard. 

Figure 7 shows how the results change if the opinion of Member States is weighted by the size of their fleet. It 
is  possible  to  notice  that  the  ranking  slightly  changes  regarding  the  most  important  problem  drivers  to  be 
addressed  by  the  revision  of  the  Flag  State  Directive.  The  lack  of  modernisation  of  ship  registers,  the 
56 

 
 
 
obsolescence  of  the  clause  on  IMSAS  audit”  and  the lack of training of  FS  inspectors  are still  considered 
major points that should be addressed, but compared to Figure 6, also the lack of comprehensive pro-active FS 
performance measurement and the lack of resilience and remote surveys become issues where the FSD should 
step in. This change is due to the fact that Member States with larger fleets give more importance to these two 
problem drivers and would like to have an EU-level action than Member States with a smaller fleet.  

Figure 7: Problem drivers that the revision should address, weighted by fleet size (N= 18 MS) 

Source: Stakeholders’ consultation – targeted interviews with Flag State administrations. 

On the other hand, the majority of the Member States do not think that the revision of the Flag State Directive 
should  address  the  loopholes  in  the  legislation  regarding  secondary,  overseas  registry,  the  lack  of 
comprehensive pro-active  FS  performance measurement, the alignment with  MLC  2006  standards  and the 
misalignment of FSD with the objectives of the European Green Deal. On the lack of resilience and remote 
surveys half of the Member States that replied believe that this should be addressed in the revision of the Flag 
State Directive, the other half has the opposite view. 

In the interviews and the dedicated workshops, as well as from the analysis from the IMO audits performed 
by the IMO secretariat, the above main areas of concern were confirmed and supported.  

In  conclusion  there  was  agreement  on  the  problem  of  legal  uncertainty  on  the  implementation  of  new 
international mandatory rules at EU level. There was also a general view that there is a lack of harmonised 
approach  to  inspections,  control,  monitoring  and  information  sharing  of  flagged  fleet.  This  varies  a  little 
between EU Member States depending on the size, type and trade of their flagged fleet. 

57 

 
 
 
3.2. Potential policy measures 

The formulation of the policy measures at the time of interviews and survey was not entirely identical with 
the wording of this report, since fine-tuning continued all along the Impact Assessment process.  

However, stakeholders were consulted on a long list of possible measures (as presented in Figure 8 below) 
and have been asked to share their views on further measures to address the aforementioned problems. The 
aim was to test their agreement with such measures, their feasibility, costs and potential benefits. 

Figure 8: Member States’ views on measures to improve maritime safety (N=16-18) 

Introducing mechanism for exchange of experience by flag administration in
respect of matters left to the discretion of the administration and findings…
Introducing digital platform at EMSA for facilitating exchange of experience
by flag administration
Introducing requirements for support for capacity building by developing
and conducting training programme(s) for FS surveyors/inspectors training…

1

Introducing harmonised training for Flag State survetors/inspectors by EMSA

Aligning the requirement of high competence standards of seafarers under
the STCW

Introducing specific requirements for more purposeful monitoring of ROs

Introducing requirements for e-Register, e-Certificates, e-logbooks

Introducing harmonised/standardised requirements for flag States to
provide information to EMSA's THETIS database on e-Registers and…

0

Introducing common technical standards for e-Register and e-Certificates

Maintaining and enhancing the requirement of IMSAS audit

1

Introducing reward for shipowners/operators with continuous higher
environmental and safety performance

Introducing audit preparatory programme for EU Member States by EMSA
prior IMO Member State audit

Further clarifying applicability of Quality Management System to all registers
under a flag

Introducing harmonised qualification standards for Flag State
surveyors/inspectors and requirements for staying in-date

Introducing policy on remote surveys, online approval of measures,
equivalents, exemptions

Introducing performance indicator of flag, for maritime administrations

Introducing performance indicator of flag, for registered fleet

Clarifying flag State responsibilities relating to social matters (MLC 2006)

Introducing indicators focusing on the labour supplying aspects

Clarifying the definition of seafare

Introducing reference in the Directive to the policy objectives of the Green
Deal
Cross-referencing  the Directive with Regulation 789/2004 on transfer of
ships between registers

Introducing indicator for environmental risk profile of ships

Introducing support by EMSA, as observer, during IMO Audits, invited by the
FS in question

Clarifying through interpretive guidelines the non-permissibility of use of
consultants and non-exclusive surveyors (or equivalent)

1

1

1

1

1

1

1

1

0

0

0

0

0

12

10

9

9

9

9

9

8

8

8

3

5

5

2

2

2

2

2

2

2

8

8

6

7

5

3

3

14

13

12

12

10

1

1

3

10

2

2

7

7

3

3

5

6

6

2

2

2

2

0
0

0

2

2

2

0
0

0
0

0
0

0

0

0

0
0

0

0
0

0
0

0

0

4

6

5

5

9

3

5

7

9

8

8

13

4

2

1

0

1

1

1

9

0
0

1

0

2

0
0

0

1

0

2

0

0
0

11

1

1

2

4

6

8

10

12

14

16

18

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Source: Stakeholders’ consultation - targeted interviews with Flag State administrations. 

58 

 
 
 
Figure 9 shows Member States’ views on measures to improve maritime safety weighted by their fleet size 
and it is possible to notice that some results change compared to the picture depicted in the Figure 8.  

Figure 9: Member States' views on measures to improve maritime safety, weighted by fleet size

Source: Stakeholders’ consultation - targeted interviews with Flag State administrations  

Member States, representing a large share of the  EU fleet have shifted the results outweighing, in relative 
terms, the opinion of Member States with a smaller fleet.    

In detail, it is possible to notice that the number of those who “Disagree/Strongly Disagree” is higher than 
those who “Strongly Agree/Agree” for the following measures: 

 

Introducing qualification standards for Flag State surveyors/inspectors and requirements for staying in-
date; 

  Cross-referencing the Directive with Regulation No 789/2004 on transfer of ships between registers; 

 

Introducing an indicator for the environmental risk profile of ships; 

59 

 
 
 
  Clarifying through interpretive guidelines the non-permissibility of use of consultants and non-exclusive 

surveyors (or equivalent). 

Member States were asked to provide evidence substantiating these negative views: 

 

Introducing qualification standards for Flag State surveyors/inspectors and requirements for staying in-
date:  In some Member States (e.g. Greece and Italy), the navy is responsible for flag State duties. By 
being  a  military  force,  the  external  imposition  of  qualifications/requirements  on  curricula  is  not  seen 
favourably. There is strong preference to keep national autonomy in this regard; 

  Cross-referencing the Directive with Regulation No 789/2004 on transfer of ships between registers: no 
specific comment was given in this regard, but views have to be interpreted in light of the fact that the 
majority of Member States believe that “the loopholes in the legislation regarding secondary, overseas 
registry” should not be addressed in the context of the revision of the Flag State Directive; 

 

Introducing indicator for environmental risk profile of ships: there is a general concern among Member 
States that imposing higher environmental standards on ships will accelerate the negative trend of EU 
shipowners  moving  to  non-EU  registers.  It  was  commented  that  cost-effective  greener  technology 
alternatives  are  not  available  in  the  market  yet.  Hence,  any  investment  imposition  will  lead  EU 
shipowners  transferring  out  from  EU  flags.  It  was  advocated  a  softer  approach  in  this  regard  (e.g. 
“introducing a reference to the policy objectives of the Green Deal”). This view on a softer approach is 
also shared by the shipowner associations interviewed; 

  Clarifying through interpretive guidelines the non-permissibility of use of consultants and non-exclusive 
surveyors (or equivalent):  no specific comment was given in this regard, and is interpreted in light of the 
fact that some Member States have fully delegated their flag State duties to ROs. This may result in that 
they might not have the resources to do in-house currently delegated functions and hence oppose this 
measure.    

The policy measures have been grouped under the following headings: 

Incorporation of and alignment to the international rules and procedures 

No respondent has questioned the measures on alignment, since the III-Code is mandatory for EU Member 
States and they have to undergo the IMO-audit. There are no real impacts of this measure. 

Cooperation, continuous improvement and performance 

From the consultations few have questioned the need for better communication and exchange between EU 
Member States as flag States in a more systematic way. The idea of setting up a dedicated expert group and/or 
platform  for  such  exchanges  and  information  sharing  has  met  with  approval,  in  particular  during  the 
consultations with Member States in the Committee of Safe Seas and with the Maritime Directors, as such 
expert groups exist already for discussing and exchanging on port State control and coastal State cooperation. 
There is no real impact on Member States and like in the other such expert groups industry will be invited for 
discussing relevant issues ad hoc. 

As  regards  flag  State  performance  -  the  dedicated  workshop  on  a  modernised  way  to  measure  flag  State 
performance  allowed  all  concerned  to  better  understand  the  suggested  approach.  This  resulted  in  broader 
general support especially as regards a more pro-active approach and support to administrations to identify 
60 

 
 
weaknesses  (rather  than  a  ranking  table  alone)  and  a  wish  to  engage  in  such  a  performance  scheme 
development. Several stakeholders pointed out that this is also a requirement in the III-Code and that an EU-
wide such scheme, building on what is already in the Directive, would be more effective and purposeful. 

Digitalisation and exchange of information 

The availability of systems for electronic certification registries, e-certificates etc. is a prerequisite for moving 
from paper based documentation, which is still dominant in the shipping sector. So far, 6 Member States have 
implemented the e-certification register and reporting of e-certificates (BE, DK, DE, FI, PT and CY) and MT 
is in the process of implementing it. 

Flag State administrations also expressed their views on the use of e-inspection reporting into THETIS, e-
certificates and e-certification registers during the consultation (see Figure 10).  

Figure 10: Flag State administrations’ view on “e-Certificates, e-Register”, (N= 18) 

Introducing harmonised/standardised
requirements for flag States to provide information
to EMSA's THETIS database on e-Registers and
statutory Certificates

0

12

Introducing common technical standards for e-
Register and e-Certificates

Introducing requirements for e-Register, e-
Certificates, e-logbooks

5

5

7

7

0%

20%

40%

60%

80%

100%

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Source: Stakeholders’ consultation 

12 of the of the 18 Flag State administrations that replied to this question agree on the need for introducing a 
module at central level (in EMSA) for reporting e-Flag State inspection reports and e-certificates, whereas the 
same support was not indicated for introducing a common technical standard for e-registers, noting that the 
latter is not a requirement for the former. 

Digitalisation is also supported by Industry stakeholders; ECSA expressed the view that modern digitalised 
efficient flag States are attractive for shipowners. IACS expressed a certain concern as regards what standards 
to use or develop and that this should preferably be done at international level, while noting that all EU ROs 
already use the technical solution provided by EMSA for reporting e-certificates. 

Capacity building, inspections and monitoring of flagged fleet 

As regards monitoring of flagged fleet and oversight of ROs the majority of respondents see this  as a key 
measure. 

Out of  22 Member States  with registered fleet under their flag, 18 Member State replied with 16 of them 
(90%) agreeing on the need to introduce specific requirements for more purposeful monitoring of recognised 
organisations (ROs); 1 MS was neutral and 1 disagreed on such a need.  

61 

 
 
 
 
 
Figure 11: Flag State administrations’ view on “monitoring the ROs”, (N= 18) 

Introducing specific requirements for more
purposeful monitoring of ROs

0%

20%

40%

60%

80%

100%

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Source: Stakeholders’ consultation 

However, a recurrent issue for Member States as flag States (and generally for port and coastal States), and 
the  most  relevant  ones  identified  during  the  stakeholder  consultation  phase,  concerns  a  lack  of  human 
resources in  particular  for inspections  as  well  as  competencies of the inspectors  needed  for RO oversight. 
These  are  the primary  hindrance to  improving the  internal  operations of  a  Flag  State  and  consequently its 
performance, putting the achievement of a good flag performance into context. Furthermore, limited budget is 
a matter of equal concern for many Member States.  

Figure 12: Hindrances to improving FS performance (N= 12 MS) 

Lack of human resources/inspectors

National budget

Competencies of human resources/inspectors

Lack of technological tools

Member State implementation strategy & policy

Lack of communication with industry stakeholders

Administration procedures/processes

Lack of communication among responsible authorities

Access to data

1

1

1

1

1

1

1

1

1

1

0

2

5

5

5

4

6

4

10

8

7

8

6

4

6

8

6

8

8

5

7

10

12

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Source: Stakeholders’ consultation 

Regarding human resources, the issue of staff shortage is therefore a key element. The split per type of staff is 
presented in the figure below. 

Figure 13: Staff shortage in Maritime Administration of Member States (N= 15 MS) 

FS surveyor/inspector/auditor

7

8

Support staff

4

PSC Officer

3

Accident investigator

Management staff

2

2

11

12

13

13

Staff shortage Yes

Staff shortage No

Number of MSs

0

3

6

9

12

15

Source: Stakeholders’ consultation 

62 

 
 
 
 
 
The number of different staff in the Flag State administration varies significantly across the different Member 
States. The expertise available varies greatly between the different Flag State administrations and depending 
on the  area  of competences. Some  of  these  areas  are  not covered  by  experts in  some  Member States.  On 
average, for most areas of competences, there are between 10 and 20 experts. 

As  regards  capacity  building,  the  large  majority  of  Flag  State  administrations  that  replied  to  this  question 
emphasized  the issue of and need for the training of flag State inspectors (post-qualification) using EMSA. 
Member States stressed this issue both as an important factor affecting performance and as one of the barriers 
to  sustainable safety. They  also expressed  a  positive  opinion on  the necessity  of standardising the training 
(post  qualification)  of  FS  inspectors  and  ensuring  harmonisation.  Member  States  emphasized  that  they 
encourage and follow up on their flag State inspectors’ participation in the EMSA training.  

Training, re-training and capacity building has been identified as an imperative for flag State inspectors.  

Figure 14: Flag State administrations’ view on “on capacity building and training”, (N= 18) 

Introducing requirements for support for
capacity building by developing and conducting
training programme(s) for FS
surveyors/inspectors training for Flag State
surveyors/inspectors by EMSA

Introducing harmonised training for Flag State
survetors/inspectors by EMSA

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

0%

20%

40%

60%

80%

100%

Source: Stakeholders’ consultation 

Only five Member States stated that they conduct an internal training program in their State (see figure below 
15). Additionally,  specialised  training  for  flag  State  inspectors  is  less  common  at  EMSA  than  specialised 
training for PSC officers. 2020 was the first  year in which EMSA provided a training specifically for flag 
State inspectors.  

Figure 15: Trainings for FS inspectors by MS and EMSA (N= 14 MS) 

Attendance in EMSA training for FS inspectors

100% (14)

Presence of MS's training for FS inspectors

36% (5)

64% (9)

0

2

4

6

8

10

12

14

Yes

No

Number of MSs

Source: Stakeholders’ consultation  

63 

 
 
 
 
3.3. Possible impacts 

The  stakeholders  were  asked  to  provide  input  on  the  current  administrative  and  inspection  cost  for  FS 
compliance  and  the  figures  provided  on  cost  /benefits  estimations  were  duly  taken  into  account  in  the 
calculations for the various policy measures and policy options (see Annex 4). 

3.4. Differences among stakeholder groups 

Virtually all consulted stakeholders supported the main problems and objectives addressed in this report. For 
this reason, they support the alignment of the Directive in particular to international instruments (III-Code and 
IMO audit), also because they are already mandatory for flag States. Industry has been involved when the 
Code was negotiated in IMO and see it as a way to ensure a more level playing field and equal competition 
internationally and therefore support the alignment. It also allows shipowners to choose quality flags and will 
put pressure on owners who do not, so the peer pressure internationally is a positive element. Stakeholders 
recognize the positive impacts that the inclusion of international instruments and the alignment would bring to 
flag State compliance.  

Differences are all related to the resource issue. EU Member States as flag States are generally not in favour 
of changing the status quo as regards their possibilities to outsource certain work and tasks. Especially those 
with  big  fleets  have  a  problem  of  finding  enough  expert  resources  and  see  issues  in  having  to  send  them 
across  the  globe  for  performing  survey  and  inspection  work.  They  hence  are  not  in  agreement  with  the 
measure to prohibit the use of non-exclusive flag State inspectors/surveyors and are not in favor of requiring 
the flag State to do first statutory surveys or for ships transferring into the flag. While they see the need for 
control they do not want to change the practice of using ROs for most such  surveys. Member States with 
smaller fleets see this less of a problem. Industry Stakeholders, especially ROs, also do not see any benefits. 
They argue that such requirements would not necessarily improve safety, as many Member States no longer 
have the required expertise to perform the survey and inspection work, not to train or keep such technical staff 
always updated with rule developments. Shipowners are less concerned as long as there is no real impact in 
efficiency (but see benefits in the current system). Hence, in their view such work would then either not be 
carried out at all or to an inferior level. They stated that additional requirements on the EU Member States 
would provide no substantial benefit but could incur additional costs and administrative burdens for the EU 
Member  States,  shipowners,  shipbuilders  and  other  stakeholders,  which  may  lead  to  the  inefficiency  and 
lower competitiveness of EU flagged vessels. 

Out of the discussed measures the one that received more support (50%) relates to requiring the EU flag State 
to do the first  International Safety Management  audit and issue corresponding certificates. This is also the 
survey where more Member States have not delegated such work away to ROs (four Member States still do 
this audit themselves and seven still issue the relevant certificates themselves). 

Regarding the possibility to involve the Commission and/or EMSA as observers with the EU flag State when 
IMO audits are performed, one Member State raised concerns and could not see any added value rather an 
added burden for the flag State. 

The measure on the introduction of a ratio of number of flag State inspectors in relation to flagged fleet and 
the revision of the Flag State performance criteria received mixed feedback from the Member States. One 
Member  State  expressed  concerns  for  the  measure  on  the  ratio  as,  in  their  view,  this  would  indicate  how 
efficient the Flag is, as they see the indicator as quantitative and not qualitative. 

64 

 
 
On the issue of digitalisation and electronic certificates, while stakeholders confirm that they largely already 
use e-certificates, the administrations are not yet doing so. All groups of stakeholders largely welcome and 
support  the  introduction  of  digital  tools  and  platforms  and  agree  with  the  aim  for  reduced  administrative 
burden,  increased  efficiency  and  enhanced  service,  such  as,  allowing  for  electronic  information  to  be  pre-
loaded  to  THETIS  and  used  for  flag  State  inspection  preparation  purposes.  Numerous  stakeholders  also 
support the setup of a framework for rewarding and incentivizing the use of electronic certificates. Technical 
standards for the exchange of data should preferably be defined at the global level. 

While  EU  Member  States  generally  were  supportive,  some  Member  States  also  argued  against  detailed 
technical specifications for setting up digital flag registries, mentioning that the rules should remain flexible to 
adapt  them  to  the  twin  transition.  The  central  point  should  be  that  all  information  can  be  shared  among 
Member States and with the central systems hosted in EMSA. In addition, some Member States pleaded for 
technologically neutral solutions.  

Finally some concerns were raised by Member States on the training capacity building and the role of EMSA 
which  should  not  be  replacing  qualification  requirements  at  national  level,  but  could  be  very  useful  post-
qualification. One Member State was not in favour of EMSA training becoming mandatory. 

65 

 
 
 
ANNEX 3: WHO IS AFFECTED AND HOW? 

1.  PRACTICAL IMPLICATIONS OF THE INITIATIVE 

The revision of the flag State Directive aims at improving the level of maritime safety of vessels operating 
under EU Member States flags. The impacts of the preferred policy option are expected to fall on different 
stakeholder  groups:  flag  State  authorities,  port  State  control  authorities,  EMSA,  the  maritime  transport 
industry (i.e. ship owners/operators), crews of the vessels and passengers of maritime vessels. 

Ensuring a high level of safety is important for the users of transport services carrying goods as well as for 
passengers. It is also important for vessel crews as these persons make up the largest number of persons killed 
and/or injured in maritime accidents. It is important for consumer protection as well as for the integrity of the 
internal market that a harmonised level of safety is ensured through maritime safety inspections carried out by 
flag States as first line of defense in a coherent and harmonised manner across the European Union. There can 
be no gaps in the maritime safety net.  

It  is  also  important  for  the  environment  that  ships  are  inspected  by  flag  States  of  the  Union  to  ensure 
environmental standards are applied in practice on board EU Member State flagged ships.  

The  preferred  policy  option  identified  in  the  context  of  this  impact  assessment,  PO2,  provides  for  the 
incorporation, consolidation and alignment with the IMO International Instruments Code (III-Code) and IMO 
Audit to ensure that EU Member States as flag States comply with international rules (safety, security and 
pollution prevention). It further ensures a higher level of harmonization for ensuring control and oversight of 
flagged fleet and Recognized Organisations performing statutory work on their behalf on their flagged ships. 
It includes certain provisions for encouraging adequate and trained human resources and expertise to uphold 
the responsibilities incumbent on them. 

Similarly, PO2 foresees the digitalisation and use of electronic certificates and electronic Flag State inspection 
reports via interoperable solutions into centrally held systems, hosted in EMSA. This is similar to what is 
proposed  for  PSC,  by  linking  the  use  of  these  certificates  for  efficient  ship  inspection  and  control  and 
oversight of Recognised Organisations (ROs). It is expected that by use of the certificates by flag States and 
the ROs to whom the flag States have delegated many tasks, this can lead to a high level of uptake allowing 
for better targeting of ships, better prepared and more ship focused enforcement on the flag State side and 
therefore  a  possible  improvement  (reduction)  on  the  port  State  control  side  for  EU  member  State  flagged 
ships.  

Moreover,  PO2  envisages  improved  capacity  building  and  training  for  flag  State  inspectors  (post-
qualification) drawing and building from the experience in doing the same for PSC Inspectors. The aim is to 
create a common understanding in how to perform and report flag State inspections and in how to enhance the 
monitoring of ROs.  This  is supported  by  the  digitalization  explained  above  and  through  the sharing  of all 
information,  both  from  flag  and  port  State  inspections,  between  all  Member  States  (via  the  centrally  held 
systems hosted in EMSA). 

The  preferred  policy  option  also  provides  for  improvements  in  collecting  some  key  data  and  information 
regarding inspections and inspectors as well as modernizing the way performance of flag States are measured 
aiming at a more pro-active method enabling continuous improvement of both flagged fleet and the work of 
the flag administration. This is to be done via a delegated act. 

66 

 
 
 
Implications for consumers, public authorities and other market actors  

The following key target groups of this initiative have been identified: 

  Flag State authorities in EU Member States 
  Recognised Organisations acting on behalf of EU Member States as flag States 
  Port State control authorities in EU Member States 
  European Maritime Safety Agency (EMSA) 
  Owners/operators of maritime transport vessels. 

Even if the safety record of EU flags is showing a stable high level, there is no place for complacency and the 
mandatory new rules at international level have been agreed indeed for that very purpose. Ultimately there 
can only be fair competition and low risk if all implement and enforce the rules in practice. This is the same at 
EU as well as international level.   

EU flag State authorities will be affected in the following ways: Member States have reduced resources 
over the past 15-20 years to a situation where there is now a risk of not being able to meet their obligations as 
flag  States.  At  the  same  time  fleets  have  overall  remained  the  same  in  terms  of  number  of  ships  and 
percentage  of  world  fleet.  This  is  the  first  line  of  defence  and  enforcement  will  be  more  harmonised  and 
strengthened, that inevitably carries a cost.  

Firstly, Member States flags will apply in a consolidated and therefore harmonised way the III-Code, using 
resources  to  carry  out  inspections  of  flagged  vessels  and  at  the  same  time  monitor  ROs.  Flag  States  will 
benefit from the operational support that they will receive from EMSA which should allow them to better 
discharge their obligations in an efficient and timely manner particularly when using the digitalisation and 
sharing of information. All this with the aim to improve efficiency by working together (in the same way as 
PSC) at the EU level. It is coupled with more harmonised capacity building, enhancing technical knowledge 
and a more common understanding, using EMSA as the competence centre, and by using a common core 
capacity building (post qualification). 

Secondly, the requirement of going digital and the use of electronic certificates should have a positive impact 
on flag State administrations by allowing for more focussed, better prepared and ship focused inspections. 

A quality EU Member States flagged fleet is less likely to be detained in PSC. This is where it is attractive for 
quality  shipowners,  with  the  EU  showing  the  way  internationally  and  maintaining  its  reputable  quality 
shipping. 

A third aspect is that flag State administrations will carry out inspections in a more harmonised way and will 
take account of changes and requirements now mandatory at the international level as well as a number of 
policy  measures  proposed  by  the  amendment  to  take  account  of  lessons  learned  in  implementation  of  the 
Directive.   

Classification Societies/Recognised Organsiations will be affected by increased monitoring but at the same 
time more efficient and EU wide monitoring that may actually lead to less audits at their offices. Alignment 
with international rules means a more harmonised approach also for ROs in performing the technical work on 
behalf of the EU Member States as flag States. The impact of requiring Member States to have the adequate 
resources but not to retain doing statutory surveys, unless the flag State wants to (in their full right to do any 
statutory surveys), will work to the advantage of ROs in their communication with the flag State regarding 
vessels under their flag. There is no direct impact of flag State inspections as they are not leading to statutory 

67 

 
 
 
certification, but a means to control that such surveys are performed to the satisfaction and in accordance with 
applicable international (and, as the case may be, nations) rules. ROs have the same interest in compliance as 
any flag State. 

EMSA will have to work with flag States, Recognised Organisations (which act on behalf of flag states), the 
Paris MoU and other interested bodies to develop a common data protocol, a validation tool and a repository 
to allow for the use and exchange of electronic certificates. 

The Agency will be impacted as regards FSD as it is will provide and ensure interoperability with national 
systems and set up a dedicated module for flag State inspection reports and e-certificates, at central level (in 
THETIS), supporting efficient reporting of inspections and recording and sharing the results with both flag 
States and port States. This will build on the already required flag State inspection reporting (into a module in 
THETIS) for roll-on roll-off passenger ships.  

EMSA will also provide different forms of technical support and training to national flag State bodies.  

Maritime  transport  operators  will  be  impacted  in  that  the  changes  to  the  Directive  brought  about  by 
alignment will lead to a limited number of additional flag State inspections. The additional costs for the sector 
of these inspections are however expected to be limited.  

On the other hand, costs savings are expected due to the implementation of digital solutions and other benefits 
in terms of improved safety, espacially as regads monitoring and oversight of ROs action on behlaf of flag 
States. These benefits overcompensate the costs for the industry (i.e. shipowners/operators).  The flag State 
compliance and control should result in fewer PSC detentions and with time PSC inspections for shipowners 
under EU member State flags. 

Given that crews are systematically the most impacted category of people as regards injuries and death in 
maritime transport any improvement to safety will impact on them positively. Positive impacts in terms of 
safety  improvements  are  also  expected  for  the  environment  and  as  regards  pollution  prevention  as  higher 
safety should lead to fewer accident and therefore less pollution (in water) due to accidents. 

2.  SUMMARY OF COSTS AND BENEFITS 

I. Overview of Benefits (total for all provisions) – Preferred Option (Policy Option 2) 

Amount 

Direct benefits 

Comments 

Description 

Improvement in the 
functioning of the internal 
market 

Positive impact on the functioning of the 
internal market, both by improving overall 
maritime safety for the benefit of freight 
customers and passengers throughout the 
Union as well as by ensuring that the same 
safety level applies throughout the Union. 
The path towards digitalisation results in a 
high degree of harmonisation between 
Member States. 

Enforcement costs savings for flag State 
authorities are driven by measures related 
to the uptake of digital solutions. In terms 
of present value over 2025-2050, the 
enforcement costs savings are estimated at 
EUR 48.8 to 52.9 million. 

Enforcement costs savings 
for flag State authorities 
relative to the baseline (i.e. 
present value over 2025-
2050) 

EUR 48.8 to 52.9 million 

68 

 
 
 
I. Overview of Benefits (total for all provisions) – Preferred Option (Policy Option 2) 

Description 

Adjustment costs savings 
for ship operators relative to 
the baseline (i.e. present 
value over 2025-2050) 

Reduction of external costs 
related to accidents relative 
to the baseline (i.e. present 
value over 2025-2050) 

Amount 

Direct benefits 

EUR 0.6 to 1.2 million 

Indirect benefits 

EUR 2,397.3 million 

Reduction in the bunker fuel 
lost at sea, relative to the 
baseline over 2025-2050 (in 
tonnes) 

1,418 tonnes of bunker fuel lost avoided 

Comments 

Adjustment costs savings for ship operators 
are driven by measures related to the uptake 
of digital solutions. In terms of present 
value over 2025-2050, the adjustment costs 
savings are estimated at EUR 0.6 to 1.2 
million. 

Indirect benefit to ships’ crews, and to 
society at large, due to the lives saved and 
injuries avoided. As deficiencies identified 
during flag State inspections typically have 
to be rectified for the ships to maintain their 
certificates, flag State inspections are 
expected to lead to a reduction in the 
number of ship deficiencies over time and 
thereby to improve safety. The impacts are 
estimated at 69 lives saved and 810 injuries 
avoided relative to the baseline over 2025-
2050 relative to the baseline. The reduction 
of the external costs related to accidents 
relative to the baseline (i.e. present value 
over 2025-2050) is estimated at EUR 
2,397.3 million. 

Indirect benefit to society at large. 
Preventing accidents from occurring in the 
future is projected to avoid 1,418 tonnes of 
bunker fuel lost at sea relative to the 
baseline. This is expected to have a positive 
impact on the quality of marine water and 
biodiversity. 

- 

- 

Not relevant. 

Administrative cost savings related to the ‘one in, one out’ approach* 

II. Overview of costs – Preferred option (Policy Option 2) 

Citizens/Consumers 

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off 

Recurrent 

Direct adjustment costs 
relative to the baseline (i.e. 
present value over 2025-
2050) 

- 

- 

- 

For ship 
operators: 3.2 
million 

For flag 
State 
authorities: 
EUR 3.3 
million 

For flag State 
authorities: 
EUR 45.6 
million 

For EMSA: 
EUR 0.5 
million 

For EMSA: 
EUR 5.9 to 
6.5 million 

For the 
European 
Commission: 

69 

 
 
 
 
 
 
 
 
 
 
II. Overview of costs – Preferred option (Policy Option 2) 

Citizens/Consumers 

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off 

Recurrent 

Direct administrative costs 

Direct enforcement costs 
relative to the baseline (i.e. 
present value over 2025-
2050) 

Direct adjustment 
costs  

Total   

Indirect 
adjustment costs 

Administrative 
costs (for 
offsetting) 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

EUR 0.6 to 
1.1 million 

- 

For flag State 
authorities: 
EUR 0.1 to 
0.3 million 

Costs related to the ‘one in, one out’ approach 

- 

- 

Direct 
adjustment 
costs for ship 
operators are 
estimated at 
EUR 3.2 
million. They 
are expected to 
be 
compensated 
by the 
adjustment 
costs savings 
due to the 
digital 
solutions (EUR 
0.6 to 1.2 
million) and 
the safety 
benefits. 

- 

- 

- 

- 

- 

- 

3.  RELEVANT SUSTAINABLE DEVELOPMENT GOALS 

III. Overview of relevant Sustainable Development Goals – Preferred Option (Policy Option 2) 
Expected progress towards the Goal 
Relevant SDG 

Comments 

SDG 3 “Ensure healthy lives 
and promote well-being for 
all at all ages” 

Changes to the Directive are expected to 
contribute to health and well-being. As 
deficiencies identified during FS inspections 
typically have to be rectified, better prepared, 
better carried out and more targeted FS 
inspections are expected to lead to a reduction in 
the number of ship deficiencies over time and 

70 

The preferred policy option is projected to 
result in 69 lives saved and 810 injuries 
avoided relative to the baseline over 2025-
2050 relative to the baseline. 

 
 
 
 
 
 
 
 
 
 
 
SDG 14 “Conserve and 
sustainably use the oceans, 
seas and marine resources 
for sustainable 
development” 

thereby may prevent future injuries or fatalities. 

Changes to the Directive are expected to 
contribute to preventing future damage to the 
marine environment through accidents. 

Preventing accidents from occurring in the 
future is projected to avoid 1,418 tonnes of 
bunker fuel lost at sea relative to the 
baseline over 2025-2050. This is expected to 
have a positive impact on the quality of 
marine water and biodiversity.  

71 

 
 
ANNEX 4: ANALYTICAL METHODS 

4.  Description of the analytical methods used  

The  main  model  used  for  developing  the  baseline  scenario  for  this  initiative  is  the  PRIMES-Maritime 
transport model by E3Modelling, a specific sub-module of the PRIMES and PRIMES-TREMOVE models. 
The  model  has  a  successful  record  of  use  in  the  Commission's  energy,  transport  and  climate  policy 
assessments.  In  particular,  it  has  been  used  for  the  impact  assessments  underpinning  the  “Fit  for  55” 
package117, the impact assessments accompanying the 2030 Climate Target Plan118 and the Staff Working 
Document accompanying the Sustainable and Smart Mobility Strategy119, the Commission’s proposal for a 
Long Term Strategy120 as well as for the 2020 and 2030 EU’s climate and energy policy framework.  

For the assessment of the impacts of the policy options an Excel-based tool has been developed by VVA, 
WMU and admaris in the context of the impact assessment support study121. The tool draws on the Standard 
Cost Model for the assessment of the administrative costs. The Excel-based tool builds extensively on data 
provided by EMSA, including data from EMCIP, and the analysis of stakeholders' feedback. The proposed 
measures which involve the amendment of the Directive are assumed to be implemented from 2025 onwards, 
so that the assessment has been undertaken for the 2025-2050 period and refers to EU27. Costs and benefits 
are expressed as present value over the 2022-2050 period, using a 3% discount rate. 

PRIMES-Maritime model 

The PRIMES-Maritime transport model is a specific sub-module of the PRIMES and PRIMES-TREMOVE 
models  and  aims  to  enhance  the  representation  of  the  maritime  sector  within  the  energy-economy-
environment modelling nexus. The model, which can run in stand-alone and/ or linked mode with PRIMES 
and  PRIMES-TREMOVE,  produces  long-term  transport  activity,  energy  and  emission  projections,  until 
2070,  separately  for  each  EU  Member  State.  The  coverage  of  the  model  includes  the  European  intra-EU 
maritime  sector  as  well  as  the  extra-EU  maritime  shipping.  The  model  covers  both  freight  and  passenger 
international maritime. PRIMES-Maritime focuses only on the EU Member States, therefore trade activity 
between non-EU countries is outside the scope of the model. The model considers the transactions (bilateral 
trade by product type) of the EU-Member States with non-EU countries and aggregates these countries in 
regions. Several types and sizes of vessels are considered. 

PRIMES-Maritime features a modular approach based on the demand and the supply modules. The demand 
module projects maritime activity for each EU Member State by type of cargo and by corresponding partner. 
Econometric functions correlate demand for maritime transport services with economic indicators considered 
as  demand  drivers,  including  GDP,  trade  of  energy  commodities  (oil,  coal,  LNG),  trade  of  non-energy 
commodities, international fuel prices, etc. The supply module simulates a representative operator controlling 
the  EU  fleet,  who  offers  the  requested  maritime  transport  services.  The  operator  of  the  fleet  decides  the 
allocation of the vessels activity to the various markets (representing the different EU MS) where different 
regulatory regimes may apply (e.g. environmental zones). The fleet of vessels is disaggregated into several 

117 Delivering the European Green Deal | European Commission (europa.eu) 
118 SWD(2020)176 final. 
119 EUR-Lex - 52020SC0331 - EN - EUR-Lex (europa.eu)  
120 Source: 2050 long-term strategy (europa.eu)  
121 VVA et al. (2023), Impact assessment support study concerning possible revision of Directive 2009/21/EC on Flag State 
Requirements. 

72 

 
 
 
                                                           
categories.  PRIMES-Maritime  utilises  a  stock-flow  relationship  to  simulate  the  evolution  of  the  fleet  of 
vessels throughout the projection period and the purchasing of new vessels. 

PRIMES-Maritime  solves  a  virtual  market  equilibrium  problem,  where  demand  and  supply  interact 
dynamically in each consecutive time period, influenced by a variety of exogenous policy variables, notably 
fuel  standards,  pricing  signals  (e.g.  Emission  Trading  Scheme),  environmental  and  efficiency/operational 
regulations and others. The PRIMES-Maritime model projects energy consumption by fuel type and purpose 
as well as CO2, methane and N2O and other pollutant emissions. The model includes projections of costs, 
such  as  capital,  fuel,  operation  costs,  projections  of  investment  expenditures  in  new  vessels  and  negative 
externalities from air pollution. 

The model serves to quantify policy scenarios supporting the transition towards carbon neutrality. It considers 
the handling of a variety of fuels such as fossil fuels, biofuels (bioheavy122, biodiesel, bio-LNG), synthetic 
fuels  (synthetic  diesel,  fuel  oil  and  gas,  e-ammonia  and  e-methanol)  produced  from  renewable  electricity, 
hydrogen produced from renewable electricity (for direct use and for use in fuel cell vessels) and electricity 
for electric vessels. Well-To-Wake emissions are calculated thanks to the linkage with the PRIMES energy 
systems model which derives ways of producing such fuels. The model also allows to explore synergies with 
Onshore  Power  Supply  systems.  Environmental  regulation,  fuel  blending  mandates,  greenhouse  gas 
emissions  reduction  targets,  pricing  signals  and  policies  increasing  the  availability  of  fuel  supply  and 
supporting the alternative fuel infrastructure are identified as drivers, along fuel costs, for the penetration of 
new fuels. As the model is dynamic and handles  vessel vintages, capital turnover is explicit in the model, 
influencing the pace of fuel and vessel substitution. 

Data inputs 

The  main  data  sources  for  inputs  to  the  PRIMES-Maritime  model,  such  as  for  activity  and  energy 
consumption,  comes  from  EUROSTAT  database  and  from  the  Statistical  Pocketbook  "EU  transport  in 
figures”123. Other data comes from different sources such as research projects (e.g. TRACCS project) and 
reports. PRIMES-Maritime being part of the overall PRIMES and PRIMES-TREMOVE transport model is 
calibrated to the EUROSTAT energy balances and transport activity; hence the associated CO2 emissions are 
assumed  to  derive  from  the  combustion  of  these  fuel  quantities.  The  model  has  been  adapted  to  reflect 
allocation of CO2 emissions into intra-EU, extra-EU and berth, in line with data from the MRV database124. 
For  air  pollutants,  the  model  draws  on  the  EEA  database.  In  the  context  of  this  exercise,  the  PRIMES-
Maritime model is calibrated to 2005, 2010 and 2015 historical data. 

5.  Baseline scenario 

In order to reflect the fundamental socio-economic, technological and policy developments, the Commission 
prepares  periodically  an  EU  Reference  Scenario  on  energy,  transport  and  GHG  emissions.  The  socio-
economic  and  technological  developments  used  for  developing  the  baseline  scenario  for  this  impact 
assessment  build  on  the  latest  “EU  Reference  2020  scenario”  (REF2020)125.  The  same  assumptions  have 
been  used  in  the  policy  scenarios  underpinning  the  impact  assessments  accompanying  the  “Fit  for  55” 
package126.  

122 Bioheavy refers to bio heavy fuel oil. 
123 Publications (europa.eu) 
124 THETIS-MRV (europa.eu) 
125 EU Reference Scenario 2020 (europa.eu) 
126 Policy scenarios for delivering the European Green Deal (europa.eu) 

73 

 
 
                                                           
Main assumptions of the Baseline scenario 

The  main  assumptions  related  to  economic  development,  international  energy  prices  and  technologies  are 
described below. 

Economic assumptions  

The  modelling  work  is  based  on  socio-economic  assumptions  describing  the  expected  evolution  of  the 
European  society.  Long-term  projections  on  population  dynamics  and  economic  activity  form  part  of  the 
input to the model and are used to estimate transport activity, particularly relevant for this impact assessment.  

Population projections from Eurostat127 are used to estimate the evolution of the European population, which 
is expected to change little in total number in the coming decades. The GDP growth projections are from the 
Ageing Report 2021128 by the Directorate General for Economic and Financial Affairs, which are based on 
the same population growth assumptions. 

Table 11: Projected population and GDP growth per Member State 

Population 

GDP growth 

EU27 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czechia 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

2020 
447.7 

8.90 

11.51 

6.95 

4.06 

0.89 

10.69 

5.81 

1.33 

5.53 

67.20 

83.14 

10.70 

9.77 

4.97 

60.29 

1.91 

2.79 

0.63 

0.51 

17.40 

37.94 

10.29 

19.28 

2025 
449.3 

9.03 

11.66 

6.69 

3.94 

0.93 

10.79 

5.88 

1.32 

5.54 

68.04 

83.48 

10.51 

9.70 

5.27 

60.09 

1.82 

2.71 

0.66 

0.56 

17.75 

37.57 

10.22 

18.51 

2030 
449.1 

9.15 

11.76 

6.45 

3.83 

0.96 

10.76 

5.96 

1.31 

5.52 

68.75 

83.45 

10.30 

9.62 

5.50 

59.94 

1.71 

2.58 

0.69 

0.59 

17.97 

37.02 

10.09 

17.81 

2020-‘25 
0.9% 

2026-‘30 
1.1% 

0.9% 

0.8% 

0.7% 

0.2% 

0.7% 

1.6% 

2.0% 

2.2% 

0.6% 

0.7% 

0.8% 

0.7% 

1.8% 

2.0% 

0.3% 

1.4% 

1.7% 

1.7% 

2.7% 

0.7% 

2.1% 

0.8% 

2.7% 

1.2% 

0.8% 

1.3% 

0.6% 

1.7% 

2.0% 

1.7% 

2.6% 

1.2% 

1.0% 

0.7% 

0.6% 

2.6% 

1.7% 

0.3% 

1.9% 

1.5% 

2.0% 

4.1% 

0.7% 

2.4% 

0.8% 

3.0% 

127 EUROPOP2019 population projections: Eurostat - Data Explorer (europa.eu)  
128 The 2021 Ageing Report : Underlying assumptions and projection methodologies The 2021 Ageing Report: Underlying 
Assumptions and Projection Methodologies | European Commission (europa.eu)  

74 

 
 
 
  
                                                           
Slovakia 

Slovenia 

Spain 

Sweden 

Population 

GDP growth 

2020 
5.46 

2.10 

47.32 

10.32 

2025 
5.47 

2.11 

48.31 

10.75 

2030 
5.44 

2.11 

48.75 

11.10 

2020-‘25 
1.1% 

2.1% 

0.9% 

1.4% 

2026-‘30 
1.7% 

2.4% 

1.6% 

2.2% 

Beyond the update of the population and growth  assumptions, an update of the projections on the sectoral 
composition of GDP was also carried out using the GEM-E3 computable general equilibrium model. These 
projections  take  into  account  the  potential  medium-  to  long-term  impacts  of  the  COVID-19  crisis  on  the 
structure of the economy, even though there are inherent uncertainties related to its eventual impacts. Overall, 
conservative  assumptions  were  made  regarding  the  medium-term  impacts  of  the  pandemic  on  the  re-
localisation of global value chains, teleworking and teleconferencing and global tourism. 

International energy prices assumptions  

Alongside socio-economic projections, transport modelling requires projections of international fuel prices. 
The projections of the POLES-JRC model – elaborated by the Joint Research Centre and derived from the 
Global Energy and Climate Outlook (GECO129) – are used to obtain long-term estimates of the international 
fuel prices. The table below shows the oil prices assumptions of the baseline and policy options of this impact 
assessment.  

Table 12: Oil prices assumptions  

in $'15 per boe 
Oil 

in €'15 per boe 
Oil 

2015 
52.3 

2015 
47.2 

2020 
39.8 

2020 
35.8 

2030 
80.1 

2030 
72.2 

2040 
97.4 

2040 
87.8 

2050 
117.9 

2050 
106.3 

Source: Derived from JRC, POLES-JRC model, Global Energy and Climate Outlook (GECO) 

Technology assumptions 

Modelling scenarios is highly dependent on the assumptions on the development of technologies  - both in 
terms of performance and costs. For the purpose of the impact  assessments related to the “Climate Target 
Plan” and the “Fit for 55” policy package, these assumptions have been updated based on a rigorous literature 
review carried out by external consultants in collaboration with the JRC. Continuing the approach adopted in 
the long-term strategy in 2018, the Commission consulted on the technology assumption with stakeholders in 
2019. In particular, the technology database of the PRIMES and PRIMES-TREMOVE models (together with 
GAINS, GLOBIOM, and CAPRI) benefited from a dedicated consultation workshop held on 11th November 
2019. EU Member States representatives also had the opportunity to comment on the costs elements during a 
workshop held on 25th November 2019. The updated technology assumptions are published together with the 
EU  Reference  Scenario  2020130.  The  same  assumptions  have  been  used  in  the  context  of  this  impact 
assessment. 

129 https://ec.europa.eu/jrc/en/geco  
130 EU Reference Scenario 2020 (europa.eu) 

75 

 
 
 
  
                                                           
 
 
 
 
 
 
Policies in the Baseline scenario  

Building  on  the  EU  Reference  scenario  2020,  the  baseline  scenario  for  this  impact  assessment  has  been 
designed to include the initiatives of the ‘Fit for 55’ package131.  

The Baseline scenario assumes no further EU level intervention beyond the current FS Directive. The IMO 
III-Code became mandatory on 1 January 2016. Parts 1 and 2 of the III-Code are particularly relevant for the 
flag States. Some sections of part 1 and 2 are already covered in full (i.e. records, improvement, delegation of 
authority,  flag  State  investigations)  or  in  part  by  EU  legislation  (e.g.  objectives,  improvement, 
implementation) and others need to be introduced (i.e. enforcement, flag State surveyors). Parts 3 and 4 of the 
III-Code are covered in EU legislation via the VTMIS Directive132 and the port State control Directive133. The 
Baseline scenario  assumes that the EU legislation will continue to reflect the new international mandatory 
rules in a fragmented manner.  

The  IMO  Audit  has  also  become mandatory  since  the  adoption  of the  FSD  under the  III-Code,  while the 
current corresponding provision in the FSD (article 7) requiring Member States to undergo the then voluntary 
IMO audit, ceased to be applicable. All Member States have undergone the IMO Audit and are expected to 
continue to do so, as flag States agreed to be bound by the mandatory rules following the Council Decision 
2013/268/EU.  

Six  Member  States  have  implemented  the  e-certification  register  and  reporting  of  e-certificates  (Belgium, 
Denmark,  Germany,  Finland,  Portugal  and  Cyprus)  and  Malta  is  in  the  process  of  implementing  it.  Few 
Member States such as Austria, Czech Republic, Hungary, Slovakia and Slovenia134 do not have an active 
register or convention ships flying their flag any longer, and do not have to put in place an e-certification 
registry. In the Baseline scenario, the Member States that have implemented the e-certification register and 
reporting of e-certificates are expected to continue to do so.  

The role of EMSA in the implementation of the Directive is central. EMSA provides training on flag State 
issues on a voluntary basis, operates the THETIS and SafeSeaNet systems and have worked out technical 
solution for the reporting and sharing of e-certificates as well as e-flag State inspection reports (RO-PAX) that 
can be built upon. It has also started a project (DONA) for flag States administrations to report statistics and 
data, on a voluntary basis, enabling the creation of MS profiles including core information.  

Baseline scenario results 

The COVID-19 pandemic had a major impact on global shipping, affecting all its segments from passenger 
ships  to  container  ships  and  oil  tankers.  In  the  baseline  scenario,  international  maritime  freight  transport 
activity  (intra  and  extra-EU)  is  projected  to  be  21%  lower  in  2020  relative  to  2015.  From  2021  onwards 
however it is projected to start recovering and grow strongly by 2025 and beyond (i.e. 19% growth for 2015-
2030  and  48%  for  2015-2050),  due  to  the  rising  demand  for  primary  resources  and  container  shipping. 
Relative to 2019, this is equivalent to 8% increase in transport activity by 2030 and 33% growth by 2050. 

131 Delivering the European Green Deal | European Commission (europa.eu) 
132 Directive 2002/59/EC 
133 Directive 2009/16/EC 
134 Slovenia as a coastal and port State has an administration dealing with coastal and port State issues and has a limited 

number of ships operating locally. 

76 

 
 
                                                           
The number of port calls for 2025-2050 is projected to grow at a lower rate than transport activity, following 
similar evolution over the historical period135. This reflects the fact that transport activity is also driven by 
other factors such as the increase in the size of vessels over time, and of the distance travelled. In the baseline 
scenario the number of port calls is projected to go up by 14% by 2030 relative to 2015 and by 36% by 2050 
(equivalent to 6% growth by 2030 relative to 2019 and 26% increase by 2050), following the recovery from 
the COVID-19 pandemic. The number of port calls reported by EU flagged and non-EU flagged vessels is 
assumed to grow at similar rates by 2050 relative to 2019, meaning that the share of the number of port calls 
reported by the EU flagged vessels would remain stable over time, at around 73% of the total number of port 
calls. 

Driven by the increase in the transport activity and the number of vessels, the number of marine casualties in 
which EU flagged and non-EU flagged vessels are involved is projected to increase over time in the baseline 
scenario. The number of casualties is projected to increase by 16% by 2030 relative to 2019 and by 53% by 
2050  without  further  EU  level  action136.  At  the  same  time,  the  degree  of  severity  of  marine  casualties  is 
projected to decrease, leading to a 10% decrease in the number of fatalities in which EU flagged and non-EU 
flagged  vessels  are  involved  by  2030.  However,  post-2030  the  increase  in  the  transport  activity  and  the 
number of vessels outweighs the reduction in the degree of severity of marine casualties and the number of 
fatalities increase by 12% by 2050 relative to 2019.  

Table  13:  Projected  number  of  marine  casualties,  vessels  lost,  fatalities  and  injuries  in  which  EU  and  non-EU 
flagged vessels are involved in the baseline scenario, in EU27 

2019 (levels) 

Cumulative growth rates 

Marine casualties 
Vessels lost 
Fatalities 
Injuries 
Source: VVA et al. (2023), Impact assessment support study 

2,121 
7 
50 
427 

'19-'30 
16% 
0% 
-10% 
15% 

'19-'40 
29% 
0% 
-2% 
27% 

'19-'50 
53% 
29% 
12% 
50% 

The projected numbers of marine casualties, vessels lost, fatalities and injuries in which EU flagged and non-
EU flagged vessels are involved in the baseline scenario, by vessel type, are provided in Table 14. They are 
derived  based on  the  projected  growth in  the  number of vessels  and the  occurrence  ratios.  For  all vessels 
types,  the  occurrence  ratios137  are  assumed  to  remain  constant  over  time  at  their  2019  levels,  drawing  on 
information for the historical period from EMCIP. This is also the case for the ratios between vessels lost, 
fatalities, injuries and the vessel fleet. As already explained, the baseline scenario is common to that of the 
impact assessment accompanying the revision of the Accident Investigation Directive and of the Port State 
Directive.  

Table  14:  Projected  numbers  of  marine  casualties,  vessels  lost,  fatalities  and  injuries  in  which  EU  and  non-EU 
flagged vessels are involved in the baseline scenario, by vessel type (EU27) 

Cargo vessels 
Marine casualties 
Vessels lost 
Fatalities 

2019 

1,233 
1 
24 

Levels 

2030 

1,452 
1 
28 

2040 

1,623 
1 
32 

2050 

1,969 
2 
38 

135  The  same  ratio  between  the  growth  in  the  number  of  port  calls  and  the  transport  activity  as  for  the  historical  period 

(2014-2019) has been assumed for the projection period.  

136 Excluding fishing vessels. 
137 Ratio between the number of marine casualties and the number of vessels.  

77 

 
 
 
 
                                                           
Injuries 
Passenger vessels 
Marine casualties 
Vessels lost 
Fatalities 
Injuries 
Service vessels 
Marine casualties 
Vessels lost 
Fatalities 
Injuries 
Other vessels 
Marine casualties 
Vessels lost 
Fatalities 
Injuries 
Source: VVA et al. (2023), Impact assessment support study 

2019 
204 

616 
1 
3 
145 

193 
2 
16 
39 

79 
3 
7 
39 

Levels 

2030 
240 

2040 
268 

733 
1 
4 
173 

201 
2 
6 
41 

79 
3 
7 
39 

821 
1 
4 
193 

204 
2 
6 
41 

79 
3 
7 
39 

2050 
326 

994 
2 
5 
234 

206 
2 
6 
42 

79 
3 
7 
39 

The number of marine casualties in which EU flagged vessels are involved is projected to increase by 7% by 
2030 relative to 2019 and by 45% by 2050 without further EU level action (Table 15). At the same time, the 
degree of severity of marine casualties is projected to decrease, leading to a 17% decrease in the number of 
fatalities in which EU flagged vessels are involved by 2030. However, post-2030 the increase in the transport 
activity and the number of EU flagged vessels outweighs the reduction in the degree of severity of marine 
casualties and the number of fatalities increases by 14% by 2050 relative to 2019.  

Table  15:  Projected  number  of  marine  casualties,  vessels  lost,  fatalities  and  injuries  in  which  EU  and  non-EU 
flagged vessels are involved in the baseline scenario, in EU27 

2019 (levels) 

Cumulative growth rates 
'19-'40 

'19-'30 

'19-'50 

Commercial vessels 
Marine casualties 
Vessels lost 
Fatalities 
Injuries 
Source: VVA et al. (2023), Impact assessment support study 

1,465 
1 
29 
302 

7% 
0% 
-17% 
-2% 

19% 
0% 
-7% 
9% 

45% 
100% 
14% 
32% 

The projected developments in the number of fatalities in the baseline, presented above, are still far from the 
goal of the Sustainable and Smart Mobility Strategy of close to zero death toll for all modes of transport in the 
EU. 

The tonnes of bunker  fuel lost  at  sea  due to very  serious  marine  casualties  involving  EU flagged ships  is 
estimated to go up from around 390 tonnes in 2019 to 510 tonnes in 2030 and 690 tonnes in 2050138.  

The projected evolution of the number of flag State inspections in the baseline draws on data on inspections 
provided by the flag State administrations for 2021, on the projected evolution of the EU flagged fleet in the 
baseline and the share of vessels that undergo an inspection in 2021. In the baseline, the share of vessels that 
undergo an inspection is assumed to remain constant over time.  Table 16 provides the projected number of 

138 Excluding fishing vessels. An average level of 30 tonnes of bunker fuels lost per vessel has been used for the estimations 

in the context of the impact assessment support study.  

78 

 
 
 
 
                                                           
flag State inspections in the baseline scenario. Few Member States such as Austria, Czech Republic, Hungary, 
Slovakia and Slovenia139 (highlighted in grey in Table 16) do not have an active register or convention ships 
flying their flag any longer and do not need to undertake inspections. At EU level, the number of flag State 
inspections is projected to increase by 14% by 2030 and 55% by 2050 relative to 2021. 

Table 16: Projected number of flag State inspections in the baseline scenario 

2021 

AT 
BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
HR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
PL 
PT 
RO 
SI 
SK 
FI 
SE 
Total 
Source: VVA et al. (2023), Impact assessment support study 

0 
22 
9 
0 
127 
2 
0 
36 
162 
88 
47 
16 
37 
214 
14 
48 
50 
0 
896 
90 
39 
1 
0 
0 
0 
8 
50 
1,956 

2030 

0 
25 
9 
0 
146 
2 
0 
41 
185 
102 
54 
18 
42 
245 
15 
54 
60 
0 
1,026 
103 
43 
1 
0 
0 
0 
9 
58 
2,238 

2040 

0 
27 
9 
0 
162 
3 
0 
47 
207 
114 
60 
21 
47 
273 
17 
54 
71 
0 
1,148 
115 
43 
1 
0 
0 
0 
10 
65 
2,494 

2050 

0 
33 
9 
0 
197 
3 
0 
55 
252 
138 
73 
25 
58 
332 
20 
68 
88 
0 
1,392 
140 
54 
2 
0 
0 
0 
12 
79 
3,030 

In the baseline scenario, the total costs for the EU flag State authorities for performing flag State inspections 
are projected to increase from EUR 2.5 million in 2021 to EUR 2.8 million in 2030 and EUR 3.8 million in 
2050  (Table  17).  The  calculations  draw  on  the  projected  number  of  inspections,  the  number  of  hours  per 
inspection provided by the flag State administrations and the tariff per hour. For the six Member States that 
have implemented the e-certification register and reporting of e-certificates (Belgium, Denmark, Germany, 
Finland, Portugal and Cyprus) the hours per inspection provided by the flag State authorities for 2021 already 
reflect the uptake of digital solutions. For Malta, which is in the process of implementing the digital solutions, 
a 5% decrease in the time spent per inspection has been assumed from 2023 onwards based on input received 
during the stakeholders’ consultation. The average tariff per hour at EU level for inspections performed by 

139 Slovenia as a coastal and port State has an administration dealing with coastal and port State issues and has a limited 

number of ships operating locally. 

79 

 
 
 
                                                           
exclusive inspectors is estimated at EUR 148 and for inspections performed by non-exclusive inspectors at 
EUR 124 per hour, based on the information provided by flag State administrations during the consultation 
process. Only Cyprus, Malta and Luxembourg use non-exclusive inspectors140.   

Table 17: Projected costs for flag State administrations in the baseline scenario (EU), in 2021 prices 

AT 
BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
HR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
PL 
PT 
RO 
SI 
SK 
FI 
SE 
Total 
Source: VVA et al. (2023), Impact assessment support study 

6.  Impacts on costs by policy measure 

2021 

0 
55 
8 
0 
141 
3 
0 
32 
192 
104 
35 
38 
110 
306 
17 
32 
50 
0 
1,076 
147 
69 
1 
0 
0 
0 
9 
65 
2,491 

2030 

0 
63 
8 
0 
162 
3 
0 
36 
219 
121 
40 
43 
125 
351 
18 
36 
60 
0 
1,170 
168 
76 
1 
0 
0 
0 
11 
76 
2,787 

2040 

0 
68 
8 
0 
180 
4 
0 
42 
246 
135 
44 
50 
139 
390 
20 
36 
71 
0 
1,310 
188 
76 
1 
0 
0 
0 
12 
85 
3,106 

2050 

0 
83 
8 
0 
219 
4 
0 
49 
299 
164 
54 
59 
172 
475 
24 
45 
88 
0 
1,588 
228 
96 
2 
0 
0 
0 
14 
103 
3,775 

This section explains the inputs used and provides the assessment on costs of the policy measures included in 
the policy options. The synergies between the policy measures included in the policy options are taken into 
account, and reflected in this section.  

PM1: Incorporate the relevant flag State parts of the III-Code and maintain IMO Audit mandatory 

Current EU legislation reflects the new international mandatory rules in a fragmented manner. Since Directive 
2009/21/EC entered into force, the international environment has changed. In 2013, at the time of the IMO 

140 Cyprus made use of 6 non-exclusive inspectors (13% of the total number of inspectors), Malta of 77 (78% of the total 

number of inspectors) and Luxembourg of 27 non-exclusive inspectors (100% of the total number of inspectors). 

80 

 
 
 
                                                           
adopting the III-Code, the Council adopted Council Decision 2013/268/EU141 setting out the Union position 
that had to be followed by Member States in IMO. That in turn means that the III-Code was considered to be 
part of Union law142. Following the Council Decision 2013/268/EU, EU Member States as IMO members 
and contracting parties to the six mandatory IMO instruments143 are required to “use the provisions of the III-
Code  for  implementation  in  the  execution  of  their  obligations  and  responsibilities”  contained  in  the 
mandatory instruments and “subject to periodic audits by the IMO in accordance with the III-Code to verify 
compliance with and implementation” of the mandatory instruments. 

The  IMO  III-Code  became  mandatory  on  1  January  2016.  Parts  1  and  2  of  the  III-Code  are  particularly 
relevant  for  the  flag  States.  Some  sections  of  part  1  and  2  are  already  covered  in  full  (i.e.  records, 
improvement, delegation of authority, flag State investigations) or in part by EU legislation (e.g. objectives, 
improvement, implementation) and others need to be introduced (i.e. enforcement, flag State surveyors). Parts 
3 and 4 of the III-Code are covered in EU legislation via the VTMIS Directive144 and the port State control 
Directive145. 

The  IMO  Audit  has  also  become mandatory  since  the  adoption  of the  FSD  under the  III-Code,  while the 
current corresponding provision in the FSD (article 7) requiring Member States to undergo the then voluntary 
IMO  audit,  ceased  to  be  applicable.  All  Member  States  have  undergone  the  IMO  Audit  and  hence  the 
implementation  and  associated  costs  are  part  of  the  baseline,  as  flag  States  agreed  to  be  bound  by  the 
mandatory rules. There are no additional costs associated to this measure relative to the baseline, although the 
measure is expected to provide legal certainty by including the new international mandatory rules in the FSD 
in a consolidated manner. 

PM2: Nominate European Commission/EMSA as observes at IMO Audits 

EMSA is mandated to carry out visits to MS for verifying the implementation of the maritime safety acquis. 
Many such visits relate to what is also covered by the IMO audits. There is therefore a need to synchronise the 
EMSA visits with the IMO audits of MS, when they are performed. This provides synergies and transparency 
as well as enable better planning, to avoid duplication. As EMSA needs to perform such visits to MS and 
these are already foreseen and budgeted, they are already part of the baseline. PM2 only requires planning to 
ensure that such visits are back-to-back with the IMO audits, bearing in mind that about 3 MS will undergo 
the IMO audit per year in a 7 year cycle. Therefore, there are no costs associated to this measure relative to 
the baseline.  

141 OJ l. 155/3, 7.6.2013, Council Decision of 13 May 2013 on the position to be taken on behalf of the European Union 
within the International maritime Organisation (IMO) with regard to the adoption of certain Codes and related amendments 
to certain conventions and protocols 
142 As soon as the Union has adopted acts, like decisions under article 218(9) TFEU backing them, they become part of the 
Union acquis. 
143 IMSAS is made mandatory through the III Code, through amendments in six IMO instruments  – SOLAS 1974 and its 
1988  Protocol,  MARPOL  73/78,  COLREG  1972,  STCW  1978  as  amended,  LL  1966  and  its  1988  Protocol,  and 
TONNAGE  1969.  The  amendments  to  these  mandatory  instruments  entered  into  force  on  1  January  2016  except  for 
amendments  to  the  LL  Protocol  and  Tonnage  69  which  entered  into  force  on  28  February  2017  and  28  February  2018 
respectively. 
144 Directive 2002/59/EC 
145 Directive 2009/16/EC 

81 

 
 
                                                           
PM3:  Establish  a  flag  State  expert  group  to  promote  cooperation  between  the  Member  States  and  the 
European Commission 

Adjustment costs for the European Commission 

The objective of PM3 is to create a mechanism for peer learning and knowledge sharing. The average cost for 
a two-day workshop hosted by European Commission (EC), where participants are reimbursed by the EC is 
around  EUR  30,000.  Therefore,  an  expert  group  meeting  once  to  twice  a  year  would  cost  between  EUR 
30,000  and  EUR  60,000.  This  measure  is  assumed  to  be  implemented  starting  from  2025.  The  ongoing 
adjustment  costs  for  the  European  Commission  for  implementing  PM3  are  estimated  at  EUR  0.6  to  1.1 
million relative to the baseline, expressed as present value over 2025-2050. 

PM4: Modernise the way Flag State performance is measured 

This measure involves defining a set of key performance indicators (KPIs), to show how EU flag States are 
performing  with  a  view  for  them  to  identify  weaknesses  and  allow  improvements  as  part  of  continuous 
improvement.  The  definition  of  the  KPIs  will  be  part  of  an  implementing  act.  A  study  has  been  already 
performed  by  the  Commission146  and  a  number  of  KPIs  have  been  preliminary  identified.  These  will  be 
discussed with Member States and industry, in view of agreeing on a final set of KPIs. They are drawing on 
various publicly available data, put together into KPIs. The work on defining the KPIs will be pursued in the 
framework of the flag State expert group, set up in PM3. The Commission, with the support of EMSA, will 
be responsible for reporting on the KPIs. No significant costs are expected in relation to this measure, as the 
KPIs will draw on publicly available data. 

PM5:  Introduce  a  technical  solution  for  use  by  the  Member  States  requiring:  (i)  e-certificate  registry, 
reporting  of  (ii)  e-certificates,  (iii)  e-FS  inspection  reports,  enabling  the  exchange  and  sharing  of 
information between the Member States and with EU-wide systems (hosted in EMSA) 

Adjustment costs for flag State administrations  

The quantification of costs for PM5 is made under the assumptions that: (i) the digitalisation of flag States 
administrations is implemented in parallel to that of port States administrations, both in terms of digitalisation 
at Member State level and in terms of tools and services provided by EMSA; (ii) the system foreseen to be 
developed by EMSA consists of a platform to store, upload, exchange, control and inspect certificates but 
would  not  serve  issuance  purposes,  which  remains  the  responsibility  of  flag  State  administrations  or  the 
Recognised Organisations that issue certificates on their behalf. 

The e-certification registry and reporting of e-certificates provides the official inventory of merchant vessels 
under  the  jurisdiction  of  a  flag  State  and  the  reporting  of  e-certificates.  So  far,  6  Member  States  have 
implemented  the  e-certification  register  and  reporting  of  e-certificates  (Belgium,  Denmark,  Germany, 
Finland, Portugal and Cyprus) and Malta is in the process of implementing it. Few Member States such as 
Austria,  Czech  Republic,  Hungary,  Slovakia  and  Slovenia147  do  not  have  an  active  register  or  convention 
ships flying their flag any longer, and do not have to put in place an e-certification registry. In addition, 5 
Member  States  do  not  issue  e-certificates  themselves  but  have  delegated  this  function  to  Recognised 
Organisations (RO) to do it on their behalf (Cyprus, Croatia, Greece, Luxembourg, the Netherlands), and do 

146 Possible refinement of Flag State performance indicators for assessing Member State as Flag States (Directive  
2009/15/EC) - Contract SI2.754568 – WM https://commission.europa.eu/publications_en.  
147 Slovenia as a coastal and port State has an administration dealing with coastal and port State issues and has a limited 

number of ships operating locally. 

82 

 
 
                                                           
not need to put in place an e-certification registry and reporting of e-certificates. Thus, this measure is relevant 
for 11 Member States (Bulgaria, Estonia, France, Italy, Ireland, Lithuania, Latvia, Spain, Poland, Romania 
and Sweden). The one-off capital costs are estimated by EMSA at EUR 300,000 per flag State administration 
in  2025  and  the  annual  costs  for  maintenance  at  EUR  100,000  per  flag  State  administration  from  2026 
onwards.  At  the  EU  level,  the  one-off  capital  costs  in  2025  are  estimated  at  EUR  3.3  million,  and  the 
maintenance costs at EUR 1.1 million per year from 2026 onwards. The total additional adjustment costs for 
flag State administrations relative to the baseline for e-certification registry and reporting of e-certificates are 
thus estimated at EUR 22.5 million expressed as present value over 2025-2050, of which EUR 3.3 million 
one-off costs.  

The e-FS inspection report is a system that generates a tailored checklist based on the type of ship and has a 
digital  environment  that  allows  to  fill  in  the  checklist  on  the  field  with  an  app  or  in  the  office  after  the 
inspection  with  a  web-based  application.  The  system  can  automatically  make  available  the  reports  to  flag 
State administrations after an inspection, making the process more efficient. A mandatory requirement for e-
FS inspection reports is already in place for EU flag States of RO-PAX ships and High Speed Craft. The RO-
PAX ships and High Speed Craft represented around 15%  of the EU flagged fleet in 2021. No additional 
costs are expected for flag State administrations for extending the e-FS inspection report to all EU flagged 
ships. The template to be used will be designed and agreed in the context of the expert group foreseen under 
PM3. The technical possibility to produce electronic checklists is already available through the RuleCheck 
system, which is made available by EMSA and already used by all EU flag State administrations. 

Adjustment costs for EMSA 

No costs are foreseen for EMSA in relation to e-certification registry, as the Agency already has a functional 
web-interface that is used by the Recognised Organisations. This web-interface will also be used for the flag 
States reporting e-certificates. 

In  relation  to  the  reporting  of  e-certificates,  the  proposed  revision  of  the  PSC  Directive  foresees  the 
development and maintenance at EU level of a common system for use of electronic certificates across flag 
States and RO for the use of port State control, as well as tools for validation and inspection. In PM5, EMSA 
would build upon this system to create a new module in the THETIS environment. This new module will 
allow flag State administrations to upload, exchange, validate and control e-certificates. The same system will 
also  be  used  by  the  ROs.  The  development  of  the  new  module  is  estimated  by  EMSA  to  lead  to  one-off 
capital  costs  of  EUR  250,000  in  2025,  and  maintenance  costs  of  EUR  125,504  per  year  (1  full  time 
equivalent) from 2025 onwards. Expressed as present value over 2025-2050, the adjustment costs for EMSA 
relative to the baseline are estimated at EUR 2.6 million of which EUR 0.3 million one-off costs. 

Extending the e-FS inspection report to all EU flagged ships would require setting up a THETIS module by 
EMSA. Building on the experience with the RO-PAX reporting module in THETIS, EMSA estimates one-off 
capital  costs  of  EUR  100,000  in  2025.  By  using  the  EMSA  hosted  systems,  the  exchange  and  sharing  is 
already ensured. No extra cost are foreseen as all systems are already interoperable. 

Total  adjustment  costs  for  EMSA  for  implementing  PM5  are  estimated  at  EUR  2.7  million  expressed  as 
present value over 2025-2050 (in 2021 prices), relative to the baseline, of which EUR 0.4 million one-off 
costs in 2025. 

Enforcement costs savings for flag State administrations 

The  implementation  of  an  e-certification  registry  system  allows  for  easier  access  and  more  flexible  case 
management,  as  well  as  improved  availability  of  ship  data  and  performance  data.  One  of  the  flag  State 

83 

 
 
administrations implementing the system estimated that the time saving due to the e-certification registry is 
roughly 650 hours per year, or 1.2 hours per year per ship. The share of ships that is covered by the e-Registry 
system (flagged in Belgium, Cyprus, Denmark, Germany, Finland, Portugal and Malta) is estimated at 55.4%.  

The e-certification registry is assumed to be implemented in 2025 but the cost savings would occur starting 
from 2026 onwards. The measure is also expected to benefit Member States that have delegated this function 
to  Recognised  Organisations,  thanks  to  easier  access  and  more  flexible  case  management,  as  well  as 
improved availability of ship data and performance data. Table 18 provides the number of EU-flagged vessels 
not  covered  by  the  e-certification  registry  system  in  the  baseline  and  the  cost  savings  generated  by  the 
implementation  of  the  measure  relative  to  the  baseline,  assuming  1.2  hours  saved  per  year  per  ship.  To 
estimate the costs savings, the tariffs per hour from the Eurostat Structure of earnings survey, Labour Force 
Survey data for Non-Wage Labour Costs (i.e. ISCO 3 – technicians and associate professionals) have been 
used (31.1 EUR per hour on average at EU level, in 2021 prices). In terms of present value over 2025-2050, 
the implementation of the e-Registry system is estimated to lead to enforcement costs savings for the flag 
State administrations of EUR 2.6 million (in 2021 prices).   

Table 18: Enforcement cost savings for flag State administrations relative to the baseline due to the implementation 
of the e-certification registry, in 2021 prices 

Number of EU-flagged vessels not covered by the e-
certificate registry system in the baseline 
Cost savings due to the implementation of the e-certificate 
registry system (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

2026 

3,983 

2030 

4,139 

2040 

4,619 

2050 

5,609 

130,469 

135,826 

151,926 

184,566 

According to the flag State authorities interviewed, the reporting of e-certificates has a positive effect on the 
operations of the flag State administrations by improving processes - both internal for the administration and 
external for customers and end-users. The system makes the process more efficient with less documentation 
requirements, and allows for better accessibility and ownership of data and certificates for the users. 

According to one of the flag State authorities that implement the system, reporting of e-certificates leads to 
cost savings of 1 hour per certificate per year. On average, each vessel needs around 20 certificates per year.  

The reporting of e-certificates is assumed to be implemented in 2025 but the cost savings would occur starting 
from 2026 onwards. Table 19 provides the number of EU-flagged vessels not covered by the e-certificates 
system in the baseline, the number of certificates needed by EU-flagged vessels that have not implemented 
the system (assuming 20 certificates per vessel) and the cost savings generated by the implementation of the 
reporting of e-certificates relative to the baseline, assuming 1 hours saved per year per certificate.  

Table 19: Enforcement cost savings for flag State administrations relative to the baseline due to the implementation 
of thereporting of e-certificates, in 2021 prices 

Number of EU-flagged vessels that do not use the e-
certificates in the baseline 
Number of certificates needed by EU-flagged vessels 
that do not use e-certificates in the baseline 
Cost savings due to the implementation of e-certificates 
(EUR) 
Source: VVA et al. (2023), Impact assessment support study 

2026 

3,983 

2030 

4,139 

2040 

4,619 

2050 

5,609 

79,660 

82,780 

92,380 

112,180 

2,127,648 

2,215,006 

2,477,561 

3,009,840 

84 

 
 
  
  
The enforcement costs savings by flag State administration relative to the baseline are provided in Table 20. 

Table 20: Enforcement  cost savings by flag State  administration relative to the baseline due to the reporting of e-
certificates, in 2021 prices 

Cost savings due to the implementation of e-certificates 
(EUR) 
BG 
EE 
IE 
EL 
ES 
FR 
HR 
IT 
LV 
LT 
LU 
NL 
PL 
RO 
SE 

Source: VVA et al. (2023), Impact assessment support study 

2026 

2030 

2040 

2050 

2,127,648 

2,215,006 

2,477,561 

3,009,840 

2,223 
9,635 
48,720 
360,345 
118,988 
181,133 
73,026 
453,286 
10,724 
7,325 
39,443 
583,315 
8,260 
1,681 
229,545 

2,223 
9,635 
51,586 
374,421 
124,816 
189,590 
75,604 
470,792 
10,724 
7,325 
42,599 
606,190 
8,260 
1,681 
239,561 

2,223 
9,635 
58,750 
418,408 
139,386 
210,734 
85,269 
527,062 
11,889 
7,325 
50,487 
677,674 
8,260 
1,681 
268,776 

2,223 
12,555 
69,497 
508,143 
168,526 
256,546 
103,526 
639,602 
14,221 
9,253 
62,320 
824,218 
10,325 
1,681 
327,205 

In terms of present value over 2025-2050, the implementation of the e-certificates system is estimated to lead 
to  enforcement  costs  savings  for  the  EU  flag  State  administrations  of  EUR  42.1  million  relative  to  the 
baseline (in 2021 prices). 

For  the  e-FS  inspection  reports,  the  calculation  of  the  enforcement  costs  savings  for  the  flag  State 
administrations draws on the number of flag State inspections performed per year. Based on the online survey 
conducted  among  flag  State  authorities,  the  implementation  of  the  e-FS  inspection  reports  system  could 
reduce the number of hours per inspection by 5% to 10%. An inspection takes on average 9.7 hours. Based on 
this information, a reduction of 0.5 (low) to 1 (high) hours has been applied relative to the baseline to the 
inspections performed by all flag State administrations, except for those that do not have an active register any 
longer.  

For PO1 and PO4, Table 21 provides the number of FS inspections in the baseline, relevant for these policy 
options, and the enforcement costs savings relative to the baseline for 2026, 2030, 2040 and 2050. In terms of 
present value over 2025-2050, the implementation of the e-FS inspection report system in PO1 and PO4 is 
estimated to lead to enforcement costs savings for the flag State administrations of EUR 3.1 to 6.1 million (in 
2021 prices). 

Table 21: Enforcement cost savings for flag State administrations relative to the baseline due to the implementation 
of the e-FS inspection report system in PO1 and PO4 (in 2021 prices) 

Number of FS inspections  
Costs savings relative to the baseline (EUR) 

Low 
High 

2026 

2,154 

2030 

2,238 

2040 

2,494 

2050 

3,030 

154,878 
309,756 

160,918 
321,836 

179,325 
358,650 

217,865 
435,729 

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In  PO2,  the measure PM10 (Introduce specific  requirement  regarding  inspections,  commensurate  with the 
size and type of fleet) leads to an increase in the number of inspections relative to the baseline. This increase 
in  the  number  of  inspections  also  need  to  be  taken  into  account  when  estimating  the  enforcement  costs 
savings due to PM5. For PO2, Table 22 provides the number of FS inspections and the enforcement costs 
savings relative to the baseline for 2026, 2030, 2040 and 2050. In terms of present value over 2025-2050, the 
implementation of the e-FS inspection report system in PO2 is estimated to lead to enforcement costs savings 
for the flag State administrations of EUR 4.1 to 8.2 million (in 2021 prices). 

Table 22: Enforcement cost savings for flag State administrations relative to the baseline due to the implementation 
of the e-FS inspection report system in PO2 (in 2021 prices) 

Number of FS inspections  
Costs savings relative to the baseline (EUR) 

Low 
High 

Source: VVA et al. (2023), Impact assessment support study 

2026 

2,893 

2030 

3,007 

2040 

3,353 

2050 

4,072 

208,014 
416,028 

216,211 
432,422 

241,089 
482,179 

292,787 
585,574 

In PO3, the measure PM11a (Require FS to do the  International Safety Management audit and issue ISM 
Certificates, combined with a number of FS inspections to be performed) leads to an increase in the number 
of inspections relative to the baseline. This increase in the number of inspections also need to be taken into 
account when estimating the enforcement costs savings due to PM5. For PO3, Table 23 provides the number 
of FS inspections and the enforcement costs savings relative to the baseline for 2026, 2030, 2040 and 2050. In 
terms of present value over 2025-2050, the implementation of the e-FS inspection report system in PO2 is 
estimated to lead to enforcement costs savings for the flag State administrations of EUR 3.3 to 6.6 million (in 
2021 prices). 

Table 23: Enforcement cost savings for flag State administrations relative to the baseline due to the implementation 
of the e-FS inspection report system in PO3 (in 2021 prices) 

Number of FS inspections  
Costs savings relative to the baseline (EUR) 

Low 
High 

Source: VVA et al. (2023), Impact assessment support study 

2026 

2030 

2040 

2050 

2,320 

2,411 

2,687 

3,263 

166,814 
333,628 

173,357 
346,714 

193,202 
386,404 

234,618 
469,236 

Total  enforcement  costs  savings  for  flag  State  administrations  for  implementing  PM5  in  PO1  and  PO4, 
relative to the baseline, are estimated at EUR 47.7 to 50.8 million expressed as present value over 2025-2050 
(in 2021 prices).  

For implementing PM5 in PO2, total enforcement costs savings for flag State administrations are estimated at 
EUR 48.8 to 52.9 million expressed as present value over 2025-2050 (in 2021 prices), relative to the baseline. 

Total enforcement costs savings for flag State administrations for implementing PM5 in PO3, relative to the 
baseline, are estimated at EUR 48 to 51.3 million expressed as present value over 2025-2050 (in 2021 prices).  

Adjustment costs savings for ship operators 

Shipowner  organisations  interviewed  acknowledged  that  introducing  digital  solutions  can  reduce  the 
adjustment costs for ship operators  and their  crews. In particular, the e-FS inspection report system would 
reduce the waiting time for the vessels being inspected (i.e. the cooperation time foreseen for FS inspections). 

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Waiting time could be reduced by 0.1 (low) to 0.2 (high) hours per vessel inspected relative to the baseline148. 
The  cost  of waiting per  hour  for vessels is  estimated  at 103.8 EUR (in 2021 prices)149 and is  assumed to 
remain constant over time in real prices.  

For PO1 and PO4, Table 24 shows the adjustment costs savings for ship operators due to the reduction in the 
waiting time for vessels considering the baseline number of inspections (which is relevant for PO1 and PO4). 
In terms of present value over 2025-2050, the  adjustment costs savings for ship operators are estimated at 
EUR 0.4 to 0.9 million (in 2021 prices).  

Table 24: Adjustment cost savings for ship operators relative to the baseline due to the implementation of the e-FS 
inspection report system in PO1 and PO4 (in 2021 prices) 

Number of ships inspected  
Costs savings due to the reduction in the 
waiting time (EUR) 

Low 
High 

2026 

2030 

2040 

2050 

2,154 

2,238 

2,494 

3,030 

22,360 
44,721 

23,232 
46,465 

25,890 
51,780 

31,454 
62,908 

Source: VVA et al. (2023), Impact assessment support study 

For PO2, the measure PM10 (Introduce specific requirement regarding inspections, commensurate with the 
size and type of fleet) leads to an increase in the number of inspections relative to the baseline. This increase 
in the number of inspections also need to be taken into account when estimating the adjustment costs savings 
for ship operators due to PM5. For PO2, Table 25 shows the adjustment costs savings for ship operators due 
to the reduction in the waiting time for vessels considering the number of inspections in PO2. In terms of 
present value over 2025-2050, the adjustment costs savings for ship operators are estimated at EUR 0.6 to 1.2 
million (in 2021 prices). 

Table 25: Adjustment cost savings for ship operators relative to the baseline due to the implementation of the e-FS 
inspection report system in PO2 (in 2021 prices) 

Number of ships inspected  
Costs savings due to the reduction in the 
waiting time (EUR) 

Low 
High 

2026 

2030 

2040 

2050 

2,893 

3,007 

3,353 

4,072 

30,032 
60,063 

31,215 
62,430 

34,807 
69,614 

42,271 
84,541 

Source: VVA et al. (2023), Impact assessment support study 

For PO3, the measure PM11a (Require FS to do the International Safety Management audit and issue ISM 
Certificates, combined with a number of FS inspections to be performed) leads to an increase in the number 
of inspections relative to the baseline. This increase in the number of inspections also need to be taken into 
account  when  estimating  the  adjustment  costs  savings  for  ship  operators  due  to  PM5.  For  PO3,  Table  26 
shows the  adjustment  costs savings  for ship operators  due to the reduction in the  waiting time  for  vessels 
considering the number of inspections in PO3. In terms of present value over 2025-2050, the adjustment costs 
savings for ship operators are estimated at EUR 0.5 to 1 million (in 2021 prices). 

148 The waiting time per vessel inspected is estimated at 2 hours in the baseline. Following the stakeholders’ feedback, the 

implementation of digital solutions would reduce the waiting time per vessel by 5 to 10%.  

149 Based on data from the Netherlands Institute for Transport Policy Analysis, which provides a breakdown of main cost 

categories for maritime transport industry.  

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Table 26: Adjustment cost savings for ship operators relative to the baseline due to the implementation of the e-FS 
inspection report system in PO3 (in 2021 prices) 

Number of ships inspected  
Costs savings due to the reduction in the 
waiting time (EUR) 

Low 
High 

2026 

2030 

2040 

2050 

2,320 

2,411 

2,687 

3,263 

24,084 
48,167 

25,028 
50,056 

27,893 
55,787 

33,873 
67,745 

Source: VVA et al. (2023), Impact assessment support study 

PM6: Develop a mechanism and template for reporting information and statistics  

Adjustment costs for EMSA 

PM6  will  be  based  on  the  Dynamic  Overview  of  National  Authorities  (DONA),  which  is  a  voluntary  e-
reporting  gate  allowing  agreed  reporting  using  templates.  Further  development  of  DONA  for  allowing 
reporting of information and statistics under FS Directive, is estimated by EMSA to lead to one-off capital 
costs of EUR 150,000 in 2025.  

In terms of maintenance, EMSA has already established the Maritime Support Services (MSS) centre which 
is a 24/7 facility located at EMSA’s premises in Lisbon. The MSS offers round-the-clock support to ensure 
two main functions: the smooth running of EMSA’s maritime applications and providing rapid assistance in 
the event of an emergency at sea. To this end, the MSS is operated by officers with specialist IT skills and 
maritime knowledge. MSS can support any new tool in the same manner that it supports all other maritime 
applications  developed by the Agency.  It  is  estimated  that  EUR  125,504  per  year  (1  full time  equivalent) 
would be needed for maintenance of the tools from 2025 onwards.  

Total adjustment costs for EMSA for implementing PM6, relative to the baseline, are estimated at EUR 2.5 
million  expressed  as  present  value  over  2025-2050  (in  2021  prices),  of  which  one-off  costs  of  EUR  0.2 
million.  

PM6 would provide benefits in terms of peer learning and knowledge sharing, and could provide tools for 
EMSA and the Commission to monitor the performance of the FS administrations.  

PM7: Specify EU Oversight programme of flagged fleet and RO’s 

Enforcement costs for flag State administrations 

Regarding  the  flagged  fleet  and  Recognised  Organisations  (ROs)  monitoring,  the  establishment  and 
implementation of a thorough oversight system of ROs is the obligation of the flag States which delegated 
their statutory authority, and this obligation is subject to audit under IMSAS. 

In  line  with  the  international  requirements,  ROs  can  carry  out  surveys  and  issue  or  endorse  Statutory 
Certificates of ships on behalf of a flag State. The current EU legislation, incorporating the IMO RO Code 
(Commission Implementing Regulation (EU) No 1355/2014 and Directive 2014/111/EU), provides the rules 
by which flag States may authorize ROs to act on their behalf. Included in both the III-Code and in the RO-
Code, are the requirements for flag States to establish a system to ensure the adequacy of work performed by 
the ROs,  including monitoring  and  verification of  class  related  matters.  According to  the  EU law the flag 
State administrations have to report on their monitoring every 2 years.  

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As  required  by  the  III-Code  and  the  RO-Code,  ROs  should  be  subject  to  the  oversight  and  monitoring 
programme established by flag States for ensuring the quality of performance carried out by them. It leaves no 
room for doubt that each flag State has a sovereign right to supervise its ROs and each RO should accept the 
supervision  of  the  flag  State  which  delegated  its  statutory  authority.  To  address  the  matter  of  burden  for 
audits, the RO-Code includes a provision for combined oversight. According to part III 7.2.2.2 of the Code, it 
is allowed for flag States to carry out oversight of their common ROs conjunctionally with other States.  

The current EU system of oversight of ROs is established by Directive 2009/15/EC and Regulation (EC) No 
391/2009. The quality of ROs is hence already regulated and (in part) monitored. However, this only requires 
flag State administrations to monitor ‘their’ ROs but there is no systematic way to share this information or 
any  findings,  nor  any  synchronisation  allowing  better  use  of  such  resources  in  the  EU  MS  for  such  RO 
oversight. 

There  are  significant  differences  in  the  practices  of  flag  State  administrations.  Of  the  flag  State 
administrations  interviewed,  for 12 of  them the monitoring  frequency  is  every  two  years,  for  one  of them 
every five years and only 6 flag State administrations adopt a continuous monitoring. In the baseline scenario, 
it is assumed that the current practice continues over time. For the 3 flag State administrations that did not 
reply  the  monitoring  frequency  has been  assumed  to  be  every  two  years.  The  results  of the online  survey 
showed that flag State administrations spend between 30 and 60 hours every year in monitoring ROs.  

PM7 aims to specify an EU oversight programme of the flagged fleet and RO’s based on the requirements of 
the  III-Code.  The  EU  oversight  programme  will  be  established  in  the  context  of  the  FS  expert  group.  As 
example, in PM7 we assume imposing the requirement of continuous monitoring, as it currently happens in 6 
Member States. In the baseline scenario it is assumed that the current practices continue over time, with 12 
Member  States  maintaining  the  monitoring  frequency  to  two  years,  1  Member  State  to  five  year  and  6 
Member States performing continuous monitoring. The time spent by flag State administration in monitoring 
ROs  has  been  assumed  to  be  between  30  hours  (low)  and  60  hours  (high)  per  year.  Table  27  shows  the 
enforcement  costs  for  flag  State  administrations  for  monitoring  ROs  in  the  baseline  and  the  additional 
enforcement costs for implementing PM7.  

Table  27:  Enforcement  costs  for  flag  State  administrations  relative  to  the  baseline  due  to  the  implementation  of 
PM7, in 2021 prices 

2025 

2026 

2030 

2040 

2050 

Total monitoring costs in the baseline (EUR) 

Low 
High 

20,542 
41,084 

5,602 
11,205 

6,536 
13,072 

6,536 
13,072 

6,536 
13,072 

Additional monitoring costs relative to the 
baseline (EUR) 

Low 
High 

Source: VVA et al. (2023), Impact assessment support study 

0 
0 

14,940 
29,879 

14,006 
28,012 

14,006 
28,012 

14,006 
28,012 

Total  enforcement  costs  for  flag  State  administrations  for  implementing  PM7,  relative  to  the  baseline,  are 
estimated at EUR 0.1 to 0.3 million expressed as present value over 2025-2050 (in 2021 prices). 

The standardization and harmonization of current practices is expected to improve how oversight over ROs is 
conducted and it is expected to minimize conflicting practices which may evolve divergently among Member 
States.  

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PM8: Introduce  common capacity  building and  harmonised  training  (post-qualification) for Flag State 
inspectors / surveyors / auditors 

Adjustment costs for EMSA 

PM8  aims  at  promoting  capacity  building  and  harmonised  training  (post-qualification)  for  Flag  State 
inspectors / surveyors / auditors. Out of 14 flag State administrations that replied to the question on training in 
the context of the stakeholders’ consultation, 9 flag State administrations don’t provide any training at all. The 
capacity  building  and  harmonised  training  by  EMSA  would  overcome  this  deficiency  in  these  9  Member 
States. In addition, capacity building and harmonised training by EMSA can provide significant synergies, by 
reducing the needs to have a dedicated budget for training in each Member State150. In addition, PM8 would 
provide benefits in terms of a common core curricula for Flag State inspectors, which will in turn help to a 
common understanding and implementation of international/EU rules. 

According  to  EMSA,  the  training  costs  are  estimated  at  EUR  70,000  to  100,000  per  year,  including  the 
reimbursement  of  participants.  In  PM8  they  are  assumed  to  be  implemented  from  2025  onwards.  Total 
adjustments costs for EMSA for implementing PM8, relative to the baseline, are estimated at EUR 1.3 to 1.8 
million expressed as present value over 2025-2050 (in 2021 prices). 

PM9a: Define flag State inspector to prevent the use of non-exclusive technical staff 

According  to  the  replies  to  a  questionnaire  by  flag  State  administrations  in  the  context  of  the  stakeholder 
consultation, only 3 flag State administrations made use of non-exclusive inspectors in 2021: Cyprus, Malta 
and Luxembourg. Cyprus made use of 6 non-exclusive inspectors (13% of the total number of inspectors), 
Malta of 77 (78% of the total number of inspectors) and Luxembourg of 27 non-exclusive inspectors (100% 
of the total number of inspectors). The average cost per hour of inspection by a non-exclusive inspector is 
estimated  at  EUR  124,  while  the  cost  per  hour  of  inspection  for  an  exclusive  inspector  at  EUR  148.  The 
average number of hours for an inspection performed by an exclusive inspector is also higher than that for a 
non-exclusive inspector.  

In the baseline scenario, 891 inspections are estimated to be performed by non-exclusive inspectors in CY, 
LU and MT in 2030, going up to 1,001 in 2040 and 1,216 in 2050. The split of inspections between those 
performed  by  exclusive  and  non-exclusive  inspectors  is  performed  based  on  the  share  of  non-exclusive 
inspectors  in  the  total  number  of  inspectors.  The  costs  of  inspections  by  non-exclusive  inspectors  in  the 
baseline  and  the  additional  costs  for  performing  these  inspections  by  exclusive  inspectors  instead  of  non-
exclusive inspectors, implementing PM9a, are provided in Table 28. The estimation of the costs also takes 
into account the reduction in the hours per inspection due to PM5.  

Total adjustments costs for the flag State administrations for implementing PM9a, relative to the baseline, are 
estimated at EUR 4.9 million expressed as present value over 2025-2050 (in 2021 prices) in PO1, PO3 and 
PO4. 

150  PM8  may  however  add  on  top  of  existing  training  courses  provided  by  Member  States,  if  Member  States  desire  to 
continue so. This measure aims at promoting additional knowledge sharing and peer learning. 

90 

 
 
 
                                                           
Table  28:  Adjustment  costs  for  flag  State  administrations  relative  to  the  baseline  due  to  the  implementation  of 
PM9a, in 2021 prices 

Total number of inspections performed by non-exclusive 
inspectors in the baseline 

CY 
LU 
MT 

Costs of inspections performed by non-exclusive inspectors 
in the baseline 

CY 
LU 
MT 

Additional costs of inspections being performed by exclusive 
inspectors instead of non-exclusive inspectors (EUR) 

CY 
LU 
MT 

Source: VVA et al. (2023), Impact assessment support study 

2025 

845 

32 
54 
759 
881,509 

19,917 
53,776 
807,816 
233,677 

2030 

891 

33 
60 
798 
929,615 

20,539 
59,751 
849,325 
245,413 

24,915 
3,865 
204,898 

25,693 
4,294 
215,426 

2040 

1,001 

2050 

1,216 

37 
71 
893 
1,044,169 

23,029 
70,705 
950,435 
274,961 

28,807 
5,081 
241,072 

45 
88 
1,083 
1,268,298 

28,008 
87,635 
1,152,655 
333,698 

35,036 
6,298 
292,364 

PM9a  will  provide  benefits  in  terms  of  legal  certainty  and  harmonization  of  the  current  practices  among 
Member States. 

 PM9b: Frame when non-statutory staff can be used and for what inspections 

PM9b aims at formalising the status quo by framing, for example, what type of inspections such non-statutory 
staff can perform e.g. cannot perform Statutory surveys but can perform some types of flag State inspections 
in  a  given  circumstance.  This  is  not  expected  to  increase  costs  relative  to  the  baseline  for  flag  States 
administrations. However, PM9b will provide benefits in terms of legal certainty, clarity and harmonization 
of the current practices among Member States. 

PM10: Introduce specific requirement regarding inspections, commensurate with the size and type of fleet  

Adjustment costs for flag State administrations 

PM10  aims  at  introducing  specific  requirements  for  the  number  of  inspections  to  be  performed, 
commensurate with the size and type of fleet. This should also provide incentives to flag State administrations 
to allocate “appropriate resources” to inspections. The definition of “appropriate resources” will be decided at 
the later stage, through a delegated act, but may include indicators such as: size of the fleet, age of the fleet, 
share of the fleet to be inspected per  year and number of flag State  inspectors.  In PM10, the share of  EU 
flagged vessels to be inspected is set at 25% per year, which means that over a four year151 period all EU 
Member State  flagged  fleet would  be inspected.    In the baseline scenario,  around  24% of  the  EU  flagged 
vessels  were  inspected  in  2021152  and  this  share  is  assumed  to  remain  constant  over  time.  13  flag  State 
administrations inspected less than 25% of their flagged fleet in 2021 (BE, DK, DE, EE, EL, FR, HR, IT, NL, 

151 This approach builds on the fact that any convention vessel has to undergo a special survey every five years (normally 
including dry-docking), which is a major check (and possible demands repairs and upgrades) normally involving the flag 
State.  

152 26% on average per year during 2016-2021. 

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PT, RO, FI, SE), although for DK and BE the share was only marginally lower than 25% (by 1 percentage 
point and 2 percentage points, respectively).  

The increase in the number of inspections relative to the baseline due to PM10 is provided in Table 29. To 
calculate  the  additional  costs  for  inspections  the  hours  per  inspection  and  the  tariff  per  hour  of  inspection 
(EUR 148 per hour on average at EU level) have been used. The additional costs for inspections relative to 
the baseline are estimated at EUR 1.3 million in 2030 and EUR 1.8 million in 2050. 

Table  29:  Adjustment  costs  for  flag  State  administrations  relative  to  the  baseline  due  to  the  implementation  of 
PM10, in 2021 prices 

2025 

2030 

2040 

2050 

Number of FS inspections in the baseline 
Additional number of inspections relative to 
the baseline 
Additional costs for inspections relative to the 
baseline (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

2,132 

734 

1,268,682 

2,238 

769 

2,494 

859 

3,030 

1,042 

1,327,959 

1,483,278 

1,800,116 

Table 30 provides the number of additional inspections and the costs for additional inspections relative to the 
baseline, by flag State administration.  

Table 30: Adjustment costs by flag State administration relative to the baseline due to the implementation of PM10, 
in 2021 prices 

BE 
DK 
DE 
EE 
EL 
FR 
HR 
IT 
NL 
PT 
RO 
FI 
SE 
Total 
Source: VVA et al. (2023), Impact assessment support study 

Additional number of 
inspections 
2030 
3 
6 
76 
8 
81 
13 
70 
146 
109 
207 
2 
34 
14 
769 

2050 
4 
9 
101 
11 
109 
18 
96 
198 
148 
281 
2 
46 
19 
1042 

Additional costs for inspections 
(EUR) 

2030 
7,561 
6,671 
112,672 
11,524 
96,068 
9,636 
166,043 
432,898 
177,755 
245,506 
2,965 
40,325 
18,334 
1,327,959 

2050 
10,081 
10,007 
149,735 
15,846 
129,276 
13,343 
227,716 
587,081 
241,355 
333,272 
2,965 
54,557 
24,882 
1,800,116 

Total adjustments costs for flag State administrations (recurrent costs) for implementing PM10, relative to the 
baseline, are estimated at EUR 26.5 million expressed as present value over 2025-2050 (in 2021 prices). 

Adjustment costs for ship operators 

The increase in the number of inspections relative to the baseline has an impact on the waiting time for the 
vessels being inspected (i.e. the cooperation time foreseen for FS inspections) and thus is expected to result in 

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adjustment costs for ship operators. Waiting time is estimated at 2 hours per vessel inspected in the baseline. 
The  cost  of waiting per  hour  for vessels is  estimated  at 103.8 EUR (in 2021 prices)153 and is  assumed to 
remain constant over time in real prices.  The adjustment costs for ship operators in 2025, 2030, 2040 and 
2050 relative to the baseline are provided in Table 31.  

Table 31: Adjustment costs for ship operators relative to the baseline due to the implementation of PM10, in 2021 
prices 

Additional number of ships inspected relative to the baseline 
Adjustment costs for ship operators (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

2025 

2030 

2040 

2050 

734 
152,390 

769 
159,657 

859 
178,342 

1,042 
216,336 

Total adjustments costs for ship operators (recurrent costs) for implementing PM10, relative to the baseline, 
are estimated at EUR 3.2 million expressed as present value over 2025-2050 (in 2021 prices). 

PM11a: Require FS to do the International Safety Management (ISM) audit and issue ISM Certificates 
(Statutory), combined with a number of FS inspections to be performed 

Adjustment costs for flag State administrations 

PM11 (PM11a and PM11b) requires flag State administrations to maintain and perform activities that they 
may  have  delegated  to  ROs.  More  specifically,  PM11a  requires  FS  to  perform  the  International  Safety 
Management (ISM) audit and issue ISM Certificates. As this is statutory work leading to certification, this 
allows the FS to decide how many and to what extent they do additional flag State inspections (not leading 
the  certification).  PM11a  additionally  requires  a  number  of  FS  inspections  to  be  performed  per  year.  The 
share of EU flagged vessels to be inspected is set at 10% per year, which means that over a ten year154 period 
all EU Member State flagged fleet would be inspected. 

The ISM Code is a chapter in SOLAS and the requirements of the ISM Code apply to all commercial ships 
over 500 GT. In order to comply with the ISM Code, a company operating a vessel has first to be audited. 
This takes place after they submit their Safety Management System Manual (SMS) and it is approved by the 
flag State administration or the Recognised Organisation (RO). Once a company is audited, the Document of 
Compliance (DOC) is issued. The validity of such document is 5 years. Every company is subject to auditing 
every year (three months before and after anniversary date and before DOC expiration date). Each vessel is 
being  issued  a  SMC  (Safety  Management  Certificate)  valid  for  5  years  and  subject  to  verification  of 
Compliance  with  ISM  Code  between  second  and  third  years  of  certificate  validity.  This  translates  into  an 
effort of auditing each flagged vessel every five years by the responsible flag State authority. 

In the baseline scenario, 4 flag State administrations (BE, BG, FR and PL) have already implemented the ISM 
audit. Three  other  flag  State  administrations  (ES,  IT  and  DE)  issue the  certificates  themselves and  should 
already have trained staff to do the ISM audits. Therefore, PM11a is relevant for 15 flag State administrations 
(DK, EE, IE, EL, HR, CY, LV, LT, LU, MT, NL, PT, RO, FI, SE). Drawing on the results of the online 
stakeholders’ survey, it is assumed that it takes around 10 hours to perform the ISM Audit. The ISM audit 
costs are derived drawing on the projected number of flagged vessels, the number of hours per audit and the 

153 Based on data from the Netherlands Institute for Transport Policy Analysis, which provides a breakdown of main cost 

categories for maritime transport industry.  

154 This approach builds on the fact that any convention vessel has to undergo  a special survey every five years (normally 
including dry-docking), which is a major check (and possible demands repairs and upgrades) normally involving the flag 
State.  

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tariff rates per hour. To estimate the costs savings, the tariffs per hour from the Eurostat Structure of earnings 
survey,  Labour  Force  Survey  data  for  Non-Wage  Labour  Costs  (i.e.  ISCO  3  –  technicians  and  associate 
professionals)  have  been  used  (31.1  EUR  per  hour  on  average  at  EU  level,  in  2021  prices).  The  ISM  is 
assumed to be implemented every 5 years. Table 32 provides the adjustment costs relative to the baseline in 
2025, 2030, 2040 and 2050. 

Table 32: Adjustment costs for flag State administrations relative to the baseline due to the implementation of  the 
ISM audit, in 2021 prices 

2025 

2030 

2040 

2050 

Number of vessels in MS that have to implement 
the ISM audit 
Costs related to the ISM audit for FS 
administrations, relative to the baseline (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

7,164 

7,524 

8,409 

10,209 

2,229,754 

2,341,802 

2,617,253 

3,177,492 

Total  adjustments  costs  for  flag  State  administrations  (recurrent  costs)  for  implementing  the  ISM  audit, 
relative  to  the baseline,  are  estimated  at  EUR 14.5  million  expressed  as present  value over 2025-2050 (in 
2021 prices). 

With regard to the number of inspections, in the baseline scenario 7 flag State administrations inspected less 
than 10% of their flagged fleet in 2021 (DE, EE, HR, IT, PT, RO, FI). 

The increase in the number of inspections relative to the baseline due to PM11a is provided in Table 33. To 
calculate  the  additional  costs  for  inspections  the  hours  per  inspection  and  the  tariff  per  hour  of  inspection 
(EUR 148 per hour on average at EU level) have been used. The additional costs for inspections relative to 
the baseline are estimated at EUR 0.3 million in 2030 and EUR 0.4 million in 2050. Expressed as present 
value over 2025-2050 (in 2021 prices), relative to the baseline, the costs are estimated at EUR 5.9 million. 

Table  33:  Adjustment  costs  for  flag  State  administrations  relative  to  the  baseline  due  to  the  requirement  on  the 
number of inspections, in 2021 prices 

2025 

2030 

2040 

2050 

Number of FS inspections in the baseline 
Additional number of inspections relative to the 
baseline 
Additional costs for inspections relative to the 
baseline (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

2,132 

166 

2,238 

173 

2,494 

193 

3,030 

233 

283,333 

293,711 

327,809 

394,777 

Table 34  provides the  number  of  additional  inspections  and the  costs  for additional inspections in PM11a 
relative to the baseline in 2030 and 2050, by flag State administration.  

Table  34:  Adjustment  costs  by  flag  State  administration  relative  to  the  baseline  due  to  the  requirement  on  the 
number of inspections, in 2021 prices 

Additional number of inspections  Additional costs for inspections 

DE 
EE 
HR 
IT 
PT 
RO 

2050 
39 
4 
23 
44 
111 
1 

(EUR) 

2030 
42,993 
4,322 
40,325 
97,847 
97,254 
1,483 

2050 
57,819 
5,762 
54,557 
130,462 
131,648 
1,483 

2030 
29 
3 
17 
33 
82 
1 

94 

 
 
  
  
  
Additional number of inspections  Additional costs for inspections 

FI 
Total 
Source: VVA et al. (2023), Impact assessment support study 

2030 
8 
173 

2050 
11 
233 

(EUR) 

2030 
9,488 
293,711 

2050 
13,046 
394,777 

Total  adjustments  costs  for  flag  State  administrations  (recurrent  costs)  for  implementing  PM11a  (the  ISM 
audit  and  the  requirement  on  the  number  of  FS  inspections  to  be  performed),  relative  to  the  baseline,  are 
estimated at EUR 20.4 million expressed as present value over 2025-2050 (in 2021 prices). 

Adjustment costs for ship operators 

The increase in the number of inspections relative to the baseline has an impact on the waiting time for the 
vessels being inspected (i.e. the cooperation time foreseen for FS inspections) and thus is expected to result in 
adjustment costs for ship operators. Waiting time is estimated at 2 hours per vessel inspected in the baseline. 
The  cost  of waiting per  hour  for vessels is  estimated  at 103.8 EUR (in 2021 prices)155 and is  assumed to 
remain constant over time in real prices. The adjustment costs for ship operators in 2025, 2030, 2040 and 
2050 relative to the baseline are provided in Table 35.  

Table 35: Adjustment costs for ship operators relative to the baseline due to the implementation of PM11a, in 2021 
prices 

2025 

2030 

2040 

2050 

Additional number of ships inspected relative to the baseline 

166 

173 

193 

233 

Adjustment costs for ship operators (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

34,464 

35,918 

40,070 

48,375 

Total adjustments costs for ship operators (recurrent costs) for implementing PM11a, relative to the baseline, 
are estimated at EUR 0.7 million expressed as present value over 2025-2050 (in 2021 prices). 

PM11b: Require full statutory survey by FS when a ‘high risk’ ship wish to register under a MS flag 

Regarding  PM11b,  a  total  of  226  EU  flagged  ships  have  been  recorded  as  being  of  “high  risk”  in  2019, 
according to data from EMSA156. They represented 2.8% of the EU flagged fleet in 2019. Of those, 5 were 
transferring flag between EU Member States and 9 from non-EU to EU flags. These 14 ships represented 
0.2% of the EU flagged fleet in 2019. The share of “high risk” ships in the EU flagged fleet and of those 
transferred between EU MS and from non-EU to EU flags is assumed to remain constant over time in the 
baseline scenario. PM11b requires full statutory survey by FS when a ‘high risk’ ship wishes to register under 
an  EU  MS  flag.  PM11b  results in  an increase in the number  of  statutory  FS inspections.  Drawing  on  the 
online stakeholders’ survey, a flag State statutory survey is estimated to take 35 to 50 hours or 42.5 hours on 
average. Table 36 provides the adjustment costs relative to the baseline in 2025, 2030, 2040 and 2050. 

Total adjustments costs for flag State administrations (recurrent costs) for implementing PM11b, relative to 
the baseline, are estimated at EUR 0.4 million expressed as present value over 2025-2050 (in 2021 prices). 

155 Based on data from the Netherlands Institute for Transport Policy Analysis, which provides a breakdown of main cost 

categories for maritime transport industry.  

156 The figure reflects the individual number of EU flagged ships that have called an EU port in 2019, and which at the time 

of arrival, were calculated by the THETIS (PSC) system as being of “High Risk Ship”. 

95 

 
 
  
  
                                                           
Table  36:  Adjustment  cost  for  flag  State  administrations  relative  to  the  baseline  due  to  the  implementation  of 
PM11b, in 2021 prices 

Number of high risks ships that require full 
statutory survey  
Adjustment costs for flag State administrations 
relative to the baseline (EUR) 
Source: VVA et al. (2023), Impact assessment support study 

2025 

15 

19,842 

2030 

16 

2040 

18 

2050 

22 

21,165 

23,810 

29,101 

1.  Benefits in terms of avoided number of fatalities, injuries and tonnes of bunker fuel lost at 

sea 

As  deficiencies  identified  during  inspections  have  to  be  rectified,  inspections  are  expected  to  lead  to  a 
reduction  in  the  number  of  ship  deficiencies  over  time  and  thereby  to  improve  safety  and  environmental 
performance. To estimate the benefits, a relationship between the number of inspections and safety indicators 
has been estimated in the context of the impact assessment support study accompanying the revision of the 
port State control Directive, by establishing an autoregressive log-log model157. The effect of an inspection 
conducted in year t is estimated to have an impact on the safety level in year t+2. The hypothesis is thus that 
the  safety  impacts  take  two  years  to  materialize.  The  same  estimates  are  used  in  the  context  of  this 
assessment, to ensure consistency.  

A  relationship  between  the  (natural  logarithm)  of  inspections  conducted  in  the  period  2012-2017  on  the 
number of marine casualties in the period 2014-2019 has been estimated. It indicates that the negative effect 
of the number of inspections on the number of marine casualties two years later is statistically different from 
0. Furthermore, the error term, indicated by the R2 (at 0.69) is fairly low, which suggests that much of the 
changes in year t+2 can be explained by changes in year t. The regression analysis is to be interpreted as “a 
1% increase in inspections in year t reduces the number of marine casualties in year 2 by 1.031%”. However, 
as the number of ship deficiencies decreases over time, it is expected that the impact on marine casualties and 
thus on the number of fatalities and injuries avoided would also decrease over time. Therefore, it has been 
assumed that  the  elasticity  decreases in  a non-linear way  by  2050,  the impacts  being significantly  smaller 
post-2040 (at less than 0.2%).  

It  should  be  noted  however  that  there  is  high  uncertainty  regarding  these  estimates.  This  is  because  the 
impacts of the FS Directive on safety are indirect. For this reason, sensitivity analysis has been performed, 
assuming 10% and 15% lower value in absolute terms of the elasticity used to derive the impacts. 

The  reduction  in  the  number  of  casualties  is  subsequently  translated  into  a  reduction  in  the  number  of 
fatalities, injuries and tonnes of bunker fuel lost at sea by using the ratios between the number of fatalities, 
injuries and tonnes of bunker fuel lost at sea and the number of marine casulaties projected in the baseline 
scenario.  

157  COWI  et  al.  (2023),  Impact  assessment  support  study  concerning  possible  revision  of  Directive  2009/16/EC  on  port 
State Control 

96 

 
 
  
                                                           
This Annex provides the fleet size of EU Member States, Norway and Iceland and its evolution between 2016 and 2021.  

ANNEX 5: EU/EEA FLEET IN NUMBERS 

Flag 

Number of ships 

AT 
BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
HR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
PL 
PT 
RO 
SI 
SK 
FI 

2016 
- 
75 
22 
- 
432 
324 
33 
50 

2017 
- 
83 
19 
- 
447 
330 
28 
55 

2018 
- 
88 
23 
- 
470 
290 
26 
61 

2020 
- 
104 
18 
- 
514 
284 
29 
68 
972 
215 
232 
292 
676 
853 
32 
37 
43 
- 

2019 
- 
99 
20 
- 
475 
290 
24 
65 
1,032  1,010  1,011  1,022 
192 
230 
280 
691 
852 
30 
34 
39 
- 

2021 
- 
98 
17 
- 
530 
271 
29 
63 
930 
222 
234 
309 
658 
839 
42 
34 
45 
- 
1,999  2,015  1,987  2,046  1,962  1,876 
740 
36 
728 
9 
- 
- 
150 

190 
213 
262 
715 
830 
25 
32 
33 
- 

162 
210 
241 
777 
808 
30 
37 
38 
- 

161 
213 
239 
795 
807 
28 
33 
45 
- 

754 
36 
619 
9 
- 
- 
151 

767 
40 
523 
10 
- 
- 
157 

773 
41 
482 
9 
- 
- 
152 

761 
37 
569 
9 
- 
- 
158 

784 
42 
383 
9 
- 
- 
156 

Share of ships in the world fleet 
2017 
- 
0.15% 
0.03% 
- 
0.81% 
0.60% 
0.05% 
0.10% 
1.83% 
0.29% 
0.38% 
0.44% 
1.41% 
1.47% 
0.05% 
0.07% 
0.07% 
- 
3.66% 
1.40% 
0.07% 
0.88% 
0.02% 
- 
- 
0.28% 

2018 
- 
0.16% 
0.04% 
- 
0.84% 
0.52% 
0.05% 
0.11% 
1.80% 
0.34% 
0.38% 
0.47% 
1.28% 
1.48% 
0.04% 
0.06% 
0.06% 
- 
3.54% 
1.37% 
0.07% 
0.93% 
0.02% 
- 
- 
0.28% 

2019 
- 
0.17% 
0.03% 
- 
0.83% 
0.51% 
0.04% 
0.11% 
1.78% 
0.33% 
0.40% 
0.49% 
1.21% 
1.49% 
0.05% 
0.06% 
0.07% 
- 
3.57% 
1.33% 
0.06% 
0.99% 
0.02% 
- 
- 
0.28% 

2020 
- 
0.18% 
0.03% 
- 
0.89% 
0.49% 
0.05% 
0.12% 
1.68% 
0.37% 
0.40% 
0.50% 
1.17% 
1.47% 
0.06% 
0.06% 
0.07% 
- 
3.39% 
1.30% 
0.06% 
1.07% 
0.02% 
- 
- 
0.26% 

2016 
- 
0.14% 
0.04% 
- 
0.79% 
0.59% 
0.06% 
0.09% 
1.88% 
0.29% 
0.39% 
0.44% 
1.45% 
1.47% 
0.05% 
0.06% 
0.08% 
- 
3.64% 
1.43% 
0.08% 
0.70% 
0.02% 
- 
- 
0.28% 

97 

- 

- 

- 

- 

- 

- 

2020 
- 

2018 
- 

2021 
- 

2019 
- 

2016 
- 

Share of ships in the EU fleet 
2017 
- 

2021 
- 
0.17%  0.95%  1.04%  1.10%  1.21%  1.28%  1.21% 
0.03%  0.28%  0.24%  0.29%  0.24%  0.22%  0.21% 
- 
0.91%  5.48%  5.61%  5.88%  5.82%  6.31%  6.54% 
0.46%  4.11%  4.14%  3.63%  3.55%  3.48%  3.34% 
0.05%  0.42%  0.35%  0.33%  0.29%  0.36%  0.36% 
0.11%  0.63%  0.69%  0.76%  0.80%  0.83%  0.78% 
1.59%  13.08%  12.66%  12.66%  12.51%  11.93%  11.47% 
0.38%  2.04%  2.03%  2.38%  2.35%  2.64%  2.74% 
0.40%  2.70%  2.63%  2.67%  2.82%  2.85%  2.89% 
0.53%  3.03%  3.02%  3.28%  3.43%  3.58%  3.81% 
1.13%  10.08%  9.74%  8.95%  8.46%  8.29%  8.12% 
1.44%  10.23%  10.13%  10.39%  10.43%  10.47%  10.35% 
0.07%  0.35%  0.38%  0.31%  0.37%  0.39%  0.52% 
0.06%  0.42%  0.46%  0.40%  0.42%  0.45%  0.42% 
0.08%  0.57%  0.48%  0.41%  0.48%  0.53%  0.56% 
- 
3.21%  25.34%  25.27%  24.88%  25.05%  24.07%  23.14% 
1.27%  9.94%  9.69%  9.60%  9.32%  9.25%  9.13% 
0.06%  0.53%  0.51%  0.50%  0.45%  0.44%  0.44% 
1.25%  4.86%  6.04%  6.55%  6.97%  7.60%  8.98% 
0.02%  0.11%  0.11%  0.13%  0.11%  0.11%  0.11% 
- 
- 
0.26%  1.98%  1.91%  1.97%  1.93%  1.85%  1.85% 

- 
- 

- 
- 

- 
- 

- 
- 

- 
- 

- 
- 

- 

- 

- 

- 

- 

- 

 
 
Flag 

Number of ships 

2019 
244 
23 

2020 
250 
22 

2018 
234 
22 

2016 
226 
22 
952 

2017 
228 
23 
966 

2021 
248 
22 
984  1,021  1,084  1,121 

2016 
0.41% 
0.04% 
1.73% 
7,888  7,975  7,987  8,167  8,150  8,108  14.38%  14.47%  14.26%  14.25%  14.07%  13.88% 

SE 
IS 
NO 
EU totals 
EEA totals  8,862  8,964  8,993  9,211  9,256  9,251  16.15%  16.26%  16.06%  16.07%  15.98%  15.84%    
Source:  EMSA  (MARINFO);  Notes:  The  figures  cover  seagoing  propelled  merchant  ships,  excluding  dredgers,  mooring  vessels,  pilot  vessels,  salvage  ships,  standby  safety 
vessels, accommodation ships, patrol vessels,  ice-breakers, effluent carriers,  floating production storage and offloading installations (FPSO), production testing vessels,  tank 
cleaning vessels, offshore construction vessels, fish carriers, firefighting vessels, fishing vessels, fishing patrol vessels, trawlers, barges. ‘-’ stands for not applicable – no register 
or no convention ship registered.  

2021 
2018 
0.42%  2.87%  2.86%  2.93%  2.99%  3.07%  3.06% 
0.04%    
1.92%    

2020 
0.43% 
0.04% 
1.87% 

100% 

100% 

100% 

100% 

100% 

100% 

2016 

2021 

2020 

Share of ships in the world fleet 
2017 
0.41% 
0.04% 
1.75% 

2018 
0.42% 
0.04% 
1.76% 

2019 
0.43% 
0.04% 
1.78% 

Share of ships in the EU fleet 
2017 

2019 

98 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
ANNEX 6:  REQUIREMENTS OF THE FLAG STATE DIRECTIVE AND 
OF THE IMO III-CODE 

The  Council  Decision  2013/268/EU  made  the  III-Code  part  of  the  EU  legal  order.  The 
incorporation is however fragmented. Some sections are already covered in full or in part by EU 
legislation and others need to be introduced and further detailed, as they leave too much room for 
interpretation to the individual EU Member States. 

Table  37  below  provides  an  overview  of  how  the  III-Code  is  reflected  in  the  EU  legislation, 
while table 38 provides more details on the part 2. To be noted that Parts 3 and 4 of the III-Code 
are already covered in EU legislation via the VTMIS Directive (Directive 2002/59/EC) and the 
port State control Directive (Directive 2009/16/EC).  

Table 37: III-Code and its reflection in EU legislation 
Resolution A.1070(28) 
(adopted on 4 December 
2013) - IMO Instruments 
Implementation Code (III 
Code) 

EU legislation  

Assessment 

PART 1-COMMON 
AREAS 
Objective  

Strategy 

General 
Scope 

Initial actions 

Communication of 
information 
Records 

Improvement 

PART 2 - FLAG STATES 

Implementation 

Delegation of authority 

Reflected in the FSD Art 1. The 2013 
Council Decision is also pertinent here. 
This is reflected in the EU maritime transport 
safety policy and included, in part, in the 
Sustainable and Smart Mobility Strategy. 
Member States have maritime strategies at 
national level. 
Reflected in recital (3) and Art 1 in the FSD 
Same as in Art 1 (a) and (b), and further in 
the Accident Investigation Directive and the 
STCW Directive.  
This is partly covered by FSD Art 8.1 
(Quality Management System). 
Partly covered in FSD Art 4.2 

FSD Art 8.1 – Quality Management System 
FSD Art 8.2 – flag State performance criteria 
via the Paris MoU White/Grey/Black list 
publication. 
Commission Regulation (EU) No 801/2010 
implementing Art. 10(3) of Directive 
2009/16/EC on port State control as regards 
the flag State criteria. 

Partly incorporated 

Partly incorporated 

Partly incorporated 
Partly incorporated 

Partly incorporated 

Partly incorporated 

Incorporated 
Partly incorporated 

Incorporated 

Council Decision 2013/268/EC 
Implementing Regulation (EU) No 
1355/2014 
Implementing Directive 2014/111/EU 
Regulation (EC) No 391/2009 on common 
rules and standards for ship inspection and 
survey organisations 
Directive 2009/15/EC on common rules and 

Partly incorporated 
Partly incorporated 

Partly incorporated 
Incorporated 

Incorporated 

99 

 
 
 
 
 
 
 
Resolution A.1070(28) 
(adopted on 4 December 
2013) - IMO Instruments 
Implementation Code (III 
Code) 

Enforcement 

Flag State surveyors 

Flag State investigations 

Evaluation and review 
PART 3-COASTAL 
STATES 
Implementation 

Enforcement 
Evaluation and review 

PART 4-PORT STATES 
Implementation 
Enforcement 

Evaluation and review 

EU legislation  

Assessment 

standards for ship inspection and survey 
organisations and for the relevant activities of 
maritime administrations 

Directive 2009/18/EC on accident 
investigation 
FSD Art 8.2 

To be incorporated 

To be incorporated 

Incorporated 

Partly incorporated 

Directive 2002/59/EC on Vessel Traffic 
Monitoring and information system (VTMIS) 
Directive 2002/59/EC on VTMIS 
High Level Steering Group on governance of 
the digital maritime system and services 
(Commission Decision (EU) 2016/566) 

Incorporated 

Incorporated 
Incorporated 

Directive 2009/16/EC on port State control 
Directive 2009/16/EC on port State control 
Directive (EU) 2019/883 on port reception 
facilities for the delivery of waste from ships 
Directive 2009/16/EC on port State control 
and in the context of Paris MoU 

Incorporated 
Incorporated 

Incorporated 

Assessment 
FSD Art 1 and Art 2.  

Table 38: More detailed assessment of III-Code part 2 and its reflection in EU legislation 
PART 2 – FLAG STATES 
Implementation 
15 158In order to effectively discharge their 
responsibilities and obligations, flag States should: 
.1 implement policies through issuing national 
legislation and guidance, which will assist in the 
implementation and enforcement of the requirements of 
all safety and pollution prevention conventions and 
protocols to which they are parties; and 
.2 assign responsibilities within their Administrations to 
update and revise any relevant policies adopted, as 
necessary. 

16 A flag State should establish resources and processes 
capable of administering a safety and environmental 
protection programme, which, as a minimum, should 
consist of the following: 
.1 administrative instructions to implement applicable 

To be aligned and introduced, giving 
the basis for an EMSA role in providing 
support. 

.1 partly in Article 4 of FSD and in EU 

158 Numbering in the III-Code 

100 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
legislation on ROs. 

NOTE: text in […] has been explicitly 
excluded from the scope of the 
legislation on ROs; Commission 
Implementing Directive 2014/111/EU 
and Commission Implementing 
Regulation No 1355/2014. 

.2 Maintain and align with IMSAS (Art 
7.2). In part this is also done by the 
independent visits and inspections 
programme carried out by EMSA on 
behalf of the Commission. Can be 
complemented by the quality 
management system (QMS) ISO audits 
and possible ‘internal’ audits by the 
MS. Also relates to the audit mechanism 
for EU ROs. 

.3 Covered in the Directive (EU) 
2019/1159 on training of seafarers 
(implementing the STCW convention)  

international rules and regulations as well as developing 
and disseminating any interpretative national regulations 
that may be needed [including certificates issued by a 
classification society, which is recognized by the flag 
State in accordance with the provisions of SOLAS 
regulation XI-1/1, and which certificate is required by 
the flag State to demonstrate compliance with structural, 
mechanical, electrical, and/or other requirements of an 
international convention to which the flag State is a 
party or compliance with a requirement of the flag 
State's national regulations]; 

.2 compliance with the requirements of the applicable 
international instruments, using an audit and inspection 
programme, independent of any administrative bodies 
issuing the required certificates and relevant 
documentation and/or of any entity which has been 
delegated authority by the State to issue the required 
certificates and relevant documentation; 

.3 compliance with the requirements related to 
international standards of training, certification and 
watchkeeping of seafarers. This includes, inter alia: 
.1 training, assessment of competence and 
certification of seafarers; 
.2 certificates and endorsements that accurately 
reflect the competencies of the seafarers, using 
the appropriate terminology as well as terms 
that are identical to those used in any safe 
manning document issued to the ship; 
.3 impartial investigation to be held of any 
reported failure, whether by act or omission that 
may pose a direct threat to safety of life or 
property at sea or to the marine environment, by 
the holders of certificates or endorsements 
issued by the State; 
.4 arrangements for the withdrawal, suspension 
or cancellation of certificates or endorsements 
issued by the State when warranted and when 
necessary to prevent fraud; and 
.5 administrative arrangements, including those 
involving training, assessment and certification 
activities conducted under the purview of 
another State, which are such that the flag State 
accepts its responsibility for ensuring the 
competence of masters, officers and other 
seafarers serving on ships entitled to fly its flag; 

.4 the conduct of investigations into casualties and 
adequate and timely handling of cases involving ships 
with identified deficiencies; and 

.4 Covered in the Accident Investigation 
Directive  

.5 the development, documentation and provision of 

.5 Covered in part by Regulation (EU) 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
guidance concerning those requirements found in the 
relevant international instruments that are to the 
satisfaction of the Administration. 

No 789/2004 on the transfer of cargo 
and passenger ships between registers 

_____________________________________________
____________________________________ 
Delegation of authority 
18 With regard only to ships entitled to fly its flag a flag 
State authorizing a recognized organization to act on its 
behalf, in conducting the surveys, inspections and 
audits, issuing of certificates and documents, marking of 
ships and other statutory work required under the 
conventions of the Organization or under its national 
legislation, should regulate such authorization(s) in 
accordance with the applicable requirements of the 
international mandatory instruments to: 
[.1 determine that the recognized organization has 
adequate resources in terms of technical, managerial and 
research capabilities to accomplish the tasks being 
assigned, in accordance with the required standards for 
recognized organizations acting on behalf of the 
Administration set out in the relevant instruments of the 
Organization;] 
.2 have as its basis a formal written agreement between 
the Administration and the recognized organization 
which, as a minimum, includes the elements set out in 
the relevant instruments of the Organization, or 
equivalent legal arrangements, and which may be based 
on the model agreement for the authorization of 
recognized organizations acting on behalf of the 
Administration; 
.3 issue specific instructions detailing actions to be 
followed in the event that a ship is found unfit to 
proceed to sea without danger to the ship or persons on 
board, or is found to present an unreasonable threat of 
harm to the marine environment; 
.4 provide the recognized organization with all 
appropriate instruments of national law and 
interpretations thereof giving effect to the provisions of 
the conventions and specify, only for application to 
ships entitled to fly its flag, whether any additional 
standards of the Administration go beyond convention 
requirements in any respect; and 
.5 require that the recognized organization maintain 
records, which will provide the Administration with 
data to assist in interpretation of requirements contained 
in the applicable international instruments. 

19 [No flag State should mandate its recognized 
organizations to apply to ships, other than those entitled 
to fly its flag, any requirement pertaining to their 
classification rules, requirements, procedures or 
performance of other statutory certification processes, 
beyond convention requirements and the mandatory 
instruments of the Organization.] 

102 

________________________________
___              

In the EU legislation on ROs. 

Text in […] has been explicitly excluded 
from the scope of the RO legislation 
Commission Implementing Directive 
2014/111/EU 

[text in […] has been explicitly 
excluded from the scope of the 
legislation on ROs Commission 
Implementing Directive 2014/111/EU 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
____________________________________________ 

________________________________ 

20 The flag State should establish or participate in an 
oversight programme with adequate resources for 
monitoring of, and communication with, its recognized 
organization(s) in order to ensure that its international 
obligations are fully met, by: 

To be introduced and specified. This is 
a core matter. 

.1 exercising its authority to conduct supplementary 
surveys to ensure that ships entitled to fly its flag 
effectively comply with the requirements of the 
applicable international instruments; 

.1 To be introduced and specified. In 
part covered for RO-PAX ships, 
Directive (EU) 2017/2110. 

.2 conducting supplementary surveys as it deems 
necessary to ensure that ships entitled to fly its flag 
comply with national requirements, which supplement 
the international mandatory requirements; and 

.2 To be introduced and specified.  

.3 providing staff who have a good knowledge of the 
rules and regulations of the flag State and those of the 
recognized organizations and who are available to carry 
out effective oversight of the recognized organizations. 
____________________________________________ 

.3 To be introduced and specified, to 
ensure not only adequate resources but 
also technical training in relation to the 
size and type of fleet. 
________________________________ 

21 A flag State nominating surveyor(s) for the purpose 
of carrying out surveys, audits and inspections on its 
behalf should regulate such nominations, as appropriate, 
in accordance with the guidance provided in paragraph 
18, in particular subparagraphs .3 and .4. 
_____________________________________________ 

To be introduced and specified whether 
or not to allow non-exclusive surveyors 
and if so, for what type of 
inspections/surveys. 

________________________________ 

Enforcement 
22 A flag State should take all necessary measures to 
secure observance of international rules and standards 
by ships entitled to fly its flag and by entities and 
persons under its jurisdiction so as to ensure compliance 
with its international obligations. Such measures should 
include, inter alia: 

Partly in FSD Art 4 and Art. 5  

.1 prohibiting ships entitled to fly its flag from sailing 
until such ships can proceed to sea in compliance with 
the requirements of international rules and standards; 

.1 Art 5 in the current FSD. 

.2 the periodic inspection of ships entitled to fly its flag 
to verify that the actual condition of the ship and its 
crew is in conformity with the certificates it carries; 

.2 This is linked to the oversight 
programme above  

.3-.4 covered by Directive 2013/54/EU 
Directive (EU) MLC and, 2019/1159 on 
training of seafarers  

.3 the surveyor to ensure, during the periodic inspection 
referred to in subparagraph .2, that seafarers assigned to 
the ships are familiar with: 
.1 their specific duties; and 
.2 ship arrangements, installations, equipment and 
procedures; 

.4 ensuring that the ship's complement, as a whole, can 
effectively coordinate activities in an emergency 

103 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
situation and in the performance of functions vital to 
safety or to the prevention or mitigation of pollution; 

.5 providing, in national laws and regulations, for 
penalties of adequate severity to discourage violation of 
international rules and standards by ships entitled to fly 
its flag; 

.6 instituting proceedings, after an investigation has 
been conducted, against ships entitled to fly its flag, 
which have violated international rules and standards, 
irrespective of where the violation has occurred; 

.7 providing, in national laws and regulations, for 
penalties of adequate severity to discourage violations 
of international rules and standards by individuals 
issued with certificates or endorsements under its 
authority; and 

.8 instituting proceedings, after an investigation has 
been conducted, against individuals holding certificates 
or endorsements who have violated international rules 
and standards, irrespective of where the violation has 
occurred. 

_____________________________________________ 
23 A flag State should develop and implement a control 
and monitoring programme, as appropriate, in order to: 

.1 provide for prompt and thorough casualty 
investigations, with reporting to the Organization as 
appropriate; 

.2 provide for the collection of statistical data, so that 
trend analyses can be conducted to identify problem 
areas; and 

.3 provide for a timely response to deficiencies and 
alleged pollution incidents reported by port or coastal 
States. 
___________________________________________ 

24 Furthermore, the flag State should: 
.1 ensure compliance with the applicable international 
instruments through national legislation; 

.2 provide an appropriate number of qualified personnel 
to implement and enforce the national legislation 
referred to in subparagraph 15.1, including personnel for 
performing investigations and surveys; 

.5-.8 Covered in the Ship Source 
Pollution Directive, Directive 2005/35 

________________________________ 

.1 Covered in the AID 

.2 To be introduced and specified as 
part of a modernized FS performance 
measurement system. EMSA’s DONA 
system in the making as well as EMCIP 
will be able to produce some statistics. 

3. Covered in FSD Art 5 

________________________________ 

.2 To be introduced and specified 

.3 provide a sufficient number of qualified flag State 
personnel to investigate incidents where ships entitled to 
fly its flag have been detained by port States; 

.3 Covered in FSD Art 5  

104 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
.4 provide a sufficient number of qualified flag State 
personnel to investigate incidents where the validity of a 
certificate or endorsement or of the competence of 
individuals holding certificates or endorsements issued 
under its authority are questioned by port States; and 

.4 covered by Directive 2013/54/EU 
Directive (EU) MLC and, 2019/1159 on 
training of seafarers 

.5 ensure the training and oversight of the activities of 
flag State surveyors and investigators. 
_____________________________________________ 

.5 To be introduced and specified. 
EMSA capacity building. 
________________________________ 

25, 26, 27 - Art 5 in FSD 

________________________________ 

Art 8.1 – to be clarified in the QMS 

29-32 Non-mandatory in the III-code 
(IMO Resolution A.1070(28)) 

25 When a flag State is informed that a ship entitled to 
fly its flag has been detained by a port State, the flag 
State should oversee that appropriate corrective 
measures are taken to bring the ship in question into 
immediate compliance with the applicable international 
instruments. 

26 A flag State, or a recognized organization acting on 
its behalf, should only issue or endorse an international 
certificate to a ship after it has determined that the ship 
meets all applicable requirements. 

27 A flag State should only issue an international 
certificate of competency or endorsement to a person 
after it has determined that the person meets all 
applicable requirements. 
____________________________________________ 

Flag State surveyors 
28 The flag State should define and document the 
responsibilities, authority and interrelation of all 
personnel who manage, perform and verify work 
relating to and affecting safety and pollution prevention. 
____________________________________________ 
29 Personnel responsible for, or performing surveys, 
inspections and audits on ships and companies covered 
by the relevant international mandatory instruments 
should have as a minimum the following: 
.1 appropriate qualifications from a marine or nautical 
institution and relevant seagoing experience as a 
certificated ship’s officer holding or having held a valid 
management level certificate of competency and having 
maintained their technical knowledge of ships and their 
operation since gaining their certificate of competency; 
or 
.2 a degree or equivalent from a tertiary institution 
within a relevant field of engineering or science 
recognized by the flag State; or 
.3 accreditation as a surveyor through a formalized 
training programme that leads to the same standard of 
surveyor's experience and competency as that required 
in paragraphs 29.1, 29.2 and 32. 

30 Personnel qualified under paragraph 29.1 should 

105 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
have served for a period of not less than three years at 
sea as an officer in the deck or engine department. 

31 Personnel qualified under paragraph 29.2 should 
have worked in a relevant capacity for at least three 
years. 

32 In addition, such personnel should have appropriate 
practical and theoretical knowledge of ships, their 
operation and the provisions of the relevant national and 
international instruments necessary to perform their 
duties as flag State surveyors obtained through 
documented training programmes. 
_____________________________________________ 

________________________________ 

33 Other personnel assisting in the performance of such 
work should have education, training and supervision 
commensurate with the tasks they are authorized to 
perform. 
____________________________________________ 

33 & 34. To be introduced and specified 
as part of capacity building and 
training 

________________________________ 

34 Previous relevant experience in the field of expertise 
is recommended to be considered an advantage; in case 
of no previous experience, the Administration should 
provide appropriate field training. 
_____________________________________________ 

35 The flag State should implement a documented 
system for qualification of personnel and continuous 
updating of their knowledge as appropriate to the tasks 
they are authorized to undertake. 
_____________________________________________ 

36 Depending on the function(s) to be performed, the 
qualifications should encompass: 
.1 knowledge of applicable, international and national, 
rules and regulations for ships, their companies, their 
crew, their cargo and their operation; 
.2 knowledge of the procedures to be applied in survey, 
certification, control, investigative and oversight 
functions; 
.3 understanding of the goals and objectives of the 
international and national instruments dealing with 
maritime safety and protection of the marine 
environment, and of related programmes; 
.4 understanding of the processes both on board and 
ashore, internal as well as external; 
.5 possession of professional competency necessary to 
perform the given tasks effectively and efficiently; 
.6 full safety awareness in all circumstances, also for 
one's own safety; and 
.7 training or experience in the various tasks to be 
performed and preferably also in the functions to be 
assessed. 
___________________________________________ 
37 The flag State should issue an identification 

106 

________________________________ 

35. Art 8.1 – to be clarified in the QMS 

________________________________ 

36. to be introduced and to be covered 
and supported by EMSA capacity 
building and training. 

________________________________ 
Not necessary for EU FS. May be done 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
document for the surveyor to carry when performing 
his/her tasks. 
_____________________________________________ 

at national level depending on national 
requirements. 
________________________________ 

Flag State investigations 
38 Marine safety investigations should be conducted by 
impartial and objective investigators, who are suitably 
qualified and knowledgeable in matters relating to the 
casualty. Subject to any agreement on which State or 
States will be the marine safety investigating State(s), 
the flag State should provide qualified investigators for 
this purpose, irrespective of the location of the casualty 
or incident. 

39 The flag State is recommended to ensure that 
individual investigators have working knowledge and 
practical experience in those subject areas pertaining to 
their normal duties. 
Additionally, in order to assist individual investigators 
in performing duties outside their normal assignments, 
the flag State is recommended to ensure ready access to 
expertise in the following areas, as necessary: 
.1 navigation and the Collision Regulations; 
.2 flag State regulations on certificates of competency; 
.3 causes of marine pollution; 
.4 interviewing techniques; 
.5 evidence gathering; and 
.6 evaluation of the effects of the human element. 

40 It is recommended that any accident involving 
personal injury necessitating absence from duty of three 
days or more and any deaths resulting from 
occupational accidents and casualties to ships of the flag 
State should be investigated, and the results of such 
investigations made public. 

41 Ship casualties should be investigated and reported 
in accordance with the relevant international 
instruments, taking into account the Casualty 
Investigation Code, as may be amended, and guidelines 
developed by the Organization. The report on the 
investigation should be forwarded to the Organization 
together with the flag State's observations, in 
accordance with the guidelines referred to above. 
_____________________________________________ 
Evaluation and review 
42 A flag State should, on a periodic basis, evaluate its 
performance with respect to the implementation of 
administrative processes, procedures and resources 
necessary to meet its obligations as required by the 
international instruments to which it is a party. 

43 Measures to evaluate the performance of flag States 
should include, inter alia, port State control detention 
rates, flag State inspection results, casualty statistics, 
communication and information processes, annual loss 

107 

Flag State Investigations are covered in 
the EU through the Accident 
Investigation Directive. 

________________________________ 

42, 43 and 44 - Partly covered in article 
8.2 FSD – To be introduced and 
specified via comitology: introduce a 
new performance scheme; link to 
performance scheme for EU RO’s. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
statistics (excluding constructive total losses (CTLs)) 
and other performance indicators as may be appropriate, 
in order to determine whether staffing, resources and 
administrative procedures are adequate to meet its flag 
State obligations. 

44 Areas recommended for regular review may include, 
inter alia: 
.1 fleet loss and accident ratios to identify trends over 
selected time periods; 
.2 the number of verified cases of detained ships in 
relation to the size of the fleet; 
.3 the number of verified cases of incompetence or 
wrongdoing by individuals holding certificates or 
endorsements issued under the flag State’s authority; 
.4 responses to port State deficiency reports or 
interventions; 
.5 investigations into very serious and serious casualties 
and lessons learned from them; 
.6 technical and other resources committed; 
.7 results of inspections, surveys and controls of the 
ships in the fleet; 
.8 investigation of occupational accidents; 
.9 the number of incidents and violations that occur 
under the applicable international maritime pollution 
prevention regulations; and 
.10 the number of suspensions or withdrawals of 
certificates, endorsements, approvals, or similar. 

108 

 
 
 
 
ANNEX  7:  LINKS  BETWEEN  THE  EX-POST  EVALUATION  AND  THE  IMPACT 
ASSESSMENT 

The links between the 2018 ex-post evaluation159 and this impact assessment are presented in the table below. 
This annex also presents the conclusions of the 2018 Maritime Fitness Check160. 

Table 39: Links between the 2018 ex-post evaluation and this impact assessment 

Main ex post evaluation conclusions  
Conclusions on relevance 
The issues identified at the time of the adoption as well 
as  the  general  and  specific  objectives  of  the  FSD  are 
still applicable. 
Conclusions on effectiveness 
The  FSD  ensured  all  Member  States  undergo  the  then 
voluntary  IMO  audit,  but  stopped  being  applicable  on 
17 June 2017.  
The  impact  of  the  FSD  on  flag  transfers  has  been 
minimal  because  it  does  not  directly  target  the  drivers 
that inform shipowners to transfer to a different EU MS 
or  third  country  flag.  These  drivers  are  today  more 
related to the quality of service and other factors, than 
to the aim of avoiding a strictly applied safety regime. 

Since  the  adoption  of  the  FSD  a  speeding  up  of  the 
number of ratifications of international conventions has 
been  observed,  in  line  with  the  main  objectives  of  the 
FSD:  to  enhance  safety  and  prevent  pollution  from 
ships flying the flag of a Member State. 
In  relation  to  measurement  of  flag  State  performance, 
EU  Member  States  performance  had 
slightly 
deteriorated  in  terms  of  Paris  MoU  port  State  control 
detentions, both in absolute and relative terms. This has 
led  to  an  increase  in  grey  listings  from  one  Member 
State in 2011 to three in 2015.  
Flag  State 
resource 
administrations 
constraints  in  terms  of  staff  and  financial  means. 
Whether  this  has  an  impact  on  the  monitoring  of  the 
work on flagged ships by Recognised Organisations on 
behalf of the flag State could not be conclusively stated 
due to the limited availability of data. This would be a 
reasonable assumption given that the responsibility as a 
FS cannot be delegated away. 
Conclusions on efficiency 
The  FSD  is  perceived  as  relatively  simple  and  not 
imposing  a  substantial  administrative  burden  on 
maritime  administrations.  No  conclusions  could  be 
drawn however on the efficient use of Member States’ 
budgets.  
Conclusions on coherence 

experience 

159 SWD (2018) 232 final 
160 SWD (2018) 228 final    

Impact Assessment 

The impact assessment further develops the general and specific 
objectives of the Directive. 

The  impact  assessment  maintains  the  requirement  for  Member 
States as flag States to undergo the now mandatory IMO Audit, 
and the provision of transparency is strengthened. 
The current FSD does not specify the technical protocol standard 
to  be  used.  This  does  not  meet  modern  (service  and 
technological)  digitalisation  demands  given 
IT  solutions 
available,  enabling  e-Certificates/e-certification  Registers  /e-FS 
inspection 
the 
digitalisation dimension in order to improve information sharing, 
efficiency and thereby the attractiveness of EU MS flags. 
The  impact  assessment  explores  aligning  to  the  changes  in  the 
IMO  rules  and  regulations  via  the  FS  relevant  parts  of  the  III-
Code.  

impact  assessment  explores 

report.  The 

The current practice of measuring flag State performance mostly 
relates  to  non-compliance  post  events,  rather  than  being  pro-
active  and  based  on  risk-assessment/profiling.  The  impact 
assessment  further  develops  the  performance  measurement  (the 
paradigm  shift)  from  measuring  “fleet”  only  to  also  measure 
performance of “administration”.  
The  impact  assessment  explores  measures  to  ensure  proper  and 
purposeful  monitoring  of  Recognised  Organisation  by  Member 
States maritime administrations.  

impact  assessment  explores 

The 
the  synergies/cost-saving 
solutions  using  digitalisation,  which  could  be  provided  at  EU-
level.  

109 

 
 
 
                                                           
Main ex post evaluation conclusions  
The  FSD  is  no  longer  fully  in  line  with  the  IMO  III-
Code 

Impact Assessment 
The  impact  assessment  identifies  the  need  for  full  alignment  to 
IMO  III-Code  to  avoid  the  current  fragmented  implementation 
and to thereby provide legal certainly as regards  new regulatory 
developments.  

Conclusions on EU added Value 
The  FSD  brings  consistency  between  the  approaches 
used  by  all  EU  Member  States,  by  limiting  the  high 
degree  of  discretion  that  national  maritime  authorities 
may apply when implementing IMO conventions.  

EU  action  continues  to  be  needed  in  order  to  ensure  continued 
uniformity  and  enforcement,  contributing  to  a  higher  level  of 
maritime  safety  and  maritime  transport  efficiency  as  well  as 
guaranteeing a level playing field between Member States.  

The 2018 Maritime Fitness Check drew the following conclusions: 

  The EU layer of legislation appears fully relevant to ensure enforcement and uniformity. While the EU is 
sometimes  accused  of  going  beyond  the  IMO  standards  and  undermining  the  credibility  of  the 
international regulation process when in the past the EU has acted this has prompted progress at IMO level 
and the subsequent adoption of global initiatives.  

  The EU is today widely  perceived as one of the regions in the world where rules are most strictly and 
properly  monitored  and  enforced  with  effective  systems  and  procedures  in  place.  Considerable  added 
value is associated with EMSA. The Agency's systems and databases, its training and capacity-building 
activities have been a key enabler of the success of the overall maritime transport policy, ensuring real 
operational application. 

  The capacity of Member States to fulfil their international obligations as a flag, port or coastal State in 

relation to the various Directives appears to be under strain.  

  The fitness check concluded that there is no major scope for legislative simplification in the overall set up. 
The  legislation  was  complementary  and  no  overlap  was  identified.  The  legislation  mirrors  the  various 
responsibilities defined at international level which would have to be followed in any case by the Member 
States  at national level.  On  the other hand, the  fitness  check  concluded that  there  is margin to  achieve 
further simplification and burden reduction in relation to the individual Directives. The potential as well as 
the challenges of digitalisation are horizontal issues. Digitalisation through EMSA systems has been a key 
enabler for the achievement of the objectives. 

110 

 
 
 
 
 
ANNEX 8: CONCLUSIONS OF AUDITS CONDUCTED UNDER THE IMO 

MEMBER STATE AUDIT SCHEME  

According  to  the  IMO  III-Code  part  2,  flag  States’  responsibilities  are  classified  in  six  groups,  namely  – 
implementation,  delegation  of  authority,  enforcement,  flag  State  surveyors,  flag  State  investigations  and 
evaluation and review. 

The figure below depicts the distribution of 546 findings according to these six groups, following from audits 
conducted under both the voluntary (VIMSAS 2007 until 2016) and mandatory  IMO Member State Audit 
Scheme (IMSAS 2017 - )161.  

Figure 16: Number of findings and observations under part 2 of the III Code – Flag States 

 Source: submission III7/7 and III7/INF 27 

Most recurrent findings correspond to implementation (181 findings, 33.1%), followed by enforcement (94 
findings, 17.2%), flag State surveyors (79 findings, 14.5%), flag State investigations (78 findings, 14.3%), 
delegation of authority (69 findings, 12.6%), and evaluation and review (45 findings, 8.2%). 

In the area of implementation, the main findings are related to the lack of implementation of policies through 
issuing  national  legislation  and  guidelines  and  the  assignment  of  responsibilities  to  update  and  revise  any 
relevant  policy  adopted,  as  well  as  documentation  and  provision  of  guidance  concerning  those  mandatory 
requirements, that are left to the satisfaction of the Administration and type approval processes. Furthermore, 
there are some findings related to resources to ensure compliance with the requirements of the mandatory 
IMO instruments. 

In  the  area  of  enforcement,  the  main  findings  are  related  to  the  absence  of  appropriate  national  legal 
provisions,  internal  directives,  and  human  resources  to  ensure  effective  enforcement  and  compliance  with 
international obligations.  

161 Sub-Committee on Implementation of IMO Instruments (III) - 5th, 6th and 7th sessions  

111 

 
 
 
 
                                                           
Concerning flag State surveyors, recurrent findings refer to training programmes, qualification, authority, and 
interrelation  among  surveyors,  as  well  as  a  documented  system  for  the  qualification  of  personnel  and 
continuous updating of their knowledge. 

With  respect  to  the  delegation  of  authority,  most  recurrent  findings  are  related  to  the  Administration’s 
oversight programme of recognized organizations (ROs), agreement between the Administration and the RO, 
as well as compliance with other relevant provisions of both the RO Code and the III-Code. 

With  respect  to  evaluation  and  review,  most  recurrent  findings  are  related  to  the  absence  of  a  system  to 
evaluate, on a periodic basis, the performance of the State in the conduct of flag State activities, regarding the 
implementation of administrative processes, procedures, and resources necessary to meet its obligations as 
required by mandatory IMO instruments to which the State is a Party. 

This is correlated with some findings and actions taken by some Member States following root-cause analysis 
as required by the FSD (Article 8.2). As an example, for one MS that was on the grey list of the Paris MoU 
for two consecutive years – the IMO audit findings indicated the following: 

The main reasons for the lack of compliance that led to the detentions and the deficiencies resulting in the 
grey  list  status  identified  included:  1.  insufficient  functioning  of  the  system  of  supervision  over  the  ships’ 
owner and safety management system; 2. insufficient functioning of the system of flag State oversight over 
ships and ships’ owners (both procedures and staff qualifications need to be improved); 3. insufficient RO 
performance  during  surveys  and  inspections;  4.  need  for  improvement  in  the  field  of  cooperation  and 
communication  between  flag  State  administration  and  ROs;  5.  insufficient  effectiveness  of  the  electronic 
database of flagged vessels, which needs to be upgraded with new functionalities, especially in the field of 
communication and data exchange with RO. 

112 

 
 
 
 
 
 
 
 
ANNEX 9: EXPLANATION ON THE TYPE OF SHIP REGISTRIES 

UNCLOS (The United Nations Convention on the Law of the Sea) requires that ships sail under the flag of 
one State  only  (normally  indicated  by  the home port  under  the name  of the  ship). Ship  registration is  the 
process by which a ship is documented and given the nationality of the country in which the ship has been 
registered and therefore fly that nation’s flag at the stern. The flag sets the jurisdiction on-board that vessel, 
which  is  normally  that  of  the  national  (or  first)  register.  Flag  States  can  establish  so  called  second  ship 
registers,  which  can  be  divided  into  ‘territorial  registers’  –  including  overseas  territories  or  autonomous 
islands like Madeira – or international registers for international carriage vessels162. Each register has its own 
rules as to the types of vessels that it will accept for registration. Traditionally, in the literature the registries 
are classified in two forms - “national” and “open”: 

  National Register:  a register that is open only to ships of its own nationality is known as a traditional or 
national register. In other words, they allow only vessels that are owned by companies or persons that are 
residents of that country. Traditionally, closed registries have a two-fold requirement: firstly, incorporation 
in country of registration and secondly, principal place of business in country of registration. In the EU, 
Italy and Greece are flag states with National Registers.  

  Open Register: a register allowing ships to be registered under a flag and fly the country’s flag without the 
real owner having a strong connection with the country. An Open Register allows shipowners to register 
their ships even though they may have a different nationality to the countries of registration. In the EU, 
Malta and Cyprus are flag states with Open Registers.  

Along these two forms, other type of registries also exist, namely:  

  Second Register:  flag  States  with  a  primary  national  register, may  offer  an  alternative  registration  with 
different crewing, regulatory, or tax requirements associated with it. The motivation163 behind the creation 
of the second registers was to stem the flow of ships moving from the national register to flags that had 
more flexible, and therefore less costly, crewing and fiscal arrangements. For instance, France and Norway 
structured their secondary registers to allow a greater percentage of seafarers to be foreign citizens than 
was  permitted  on  their  respective  national  registers.  France  (French  Austral  and  Antarctic  Territories), 
Portugal (International Ship Register of Madeira), Spain (the Canary Islands Special Register of Ships) 
and the Netherlands (Netherlands Antilles Register) are examples of territorial Secondary Registers. There 
are various types of second registers and some offer attractive combinations of national and open registry 
features. These are easier to access and have fewer entry requirements than most national registers, but 
they tend to maintain a nationality link between beneficial owner or management of the vessel and the flag 
State164.  Some  allow  foreign  shipowners  access  to  the  register  only  once  certain  technical  and  safety 

162 EPRS | European Parliamentary Research Service (2015) Ex-Post Impact Assessment on the Implementation and Effects 
of the Third Maritime Safety Package 
163  Jessica  S.  Bemfeld  (2007),  “States,  Ships,  and  Secondary  Registers:  Examining  Sovereignty  and  Standards  in  a 
Globalized World”. Available at: https://orca.cardiff.ac.uk/55744/1/U584266.pdf 
164  Jessica  S.  Bemfeld  (2007),  “States,  Ships,  and  Secondary  Registers:  Examining  Sovereignty  and  Standards  in  a 
Globalized World”. Available at: https://orca.cardiff.ac.uk/55744/1/U584266.pdf 

113 

 
 
 
                                                           
standards are met165 e.g. Denmark (the Danish International Ship Registers) and Germany (the German 
International Shipping Register). 

Second and Open registers do not necessarily have lower safety standards than the national (or first) registers, 
but they do leave a margin when it comes to taxation and nationality of manning, as ships registered there are 
normally not involved in trade to/from its own ports (domestic trade). Many second registers are maintained 
for use only by national shipowners as an alternative to flagging out and as a way to compete with the open 
register system. 

165  Jessica  S.  Bemfeld  (2007),  “States,  Ships,  and  Secondary  Registers:  Examining  Sovereignty  and  Standards  in  a 
Globalized World”. Available at: https://orca.cardiff.ac.uk/55744/1/U584266.pdf 

114 

 
 
 
                                                           
ANNEX 10: FLAG STATE DELEGATION TO RECOGNISED ORGANISATIONS 

The table below presents the functions delegated by Member States to Recognised Organisations, according to the IMO Global  Integrated 
Shipping Information.  

Member States 

Performance items 

AT  BE  BG  HR  CY  CZ  DK  EE  FI  FR  DE  EL  HU 

IE 

IT  LV  LT  LU  MT  NL  PL  PT  RO  SK  SI  ES  SE 

Yes 
The function is fully 
delegated to the RO 

Partial/Limited 
Shared responsibility between the RO and MS or RO is authorised but only during predefined 
periods of time and upon approval of the maritime administration. 

No 
The function is not delegated to the RO 

Empty 
Left blank in GISIS 

Passenger ship safety 

Cargo ship safety construction 

Cargo ship safety equipment 

Radio 

ISM Code 

ISM Code - DOC 

ISM Code - SMC 

Load line 

MARPOL Annex I 

MARPOL Annex II 

MARPOL Annex III 

MARPOL Annex IV 

MARPOL Annex V 

MARPOL Annex VI 

Tonnage measurement 

AFS Convention 

BWM Convention 

n
o
i
t
a
g
e
l
e
d
f
o
s
u
t
a
t
S

Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 
Survey 
Cert 

Note: ‘Cert’ stands for certification.  

115 

 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
ANNEX 11: NUMBER OF EXCLUSIVE FS INSPECTORS AND FS INSPECTIONS 

BY MEMBER STATE  

This annex provides the number of exclusive flag State inspectors and the number of flag State inspections, 
together with the number of ships, per Member State. The data was gathered through direct requests to flag 
States administrations, questionnaires and interviews. 

Table 40: Number of exclusive flag State inspectors, inspections and number of ships in 2021 
Member State 

Number of inspections 

Number of ships 

Number of exclusive inspectors 

98 
17 

22 
9 

127 
2 
0 
36 
162 
88 
47 
16 
37 
214 
14 
48 
50 

530 
271 
29 
63 
930 
222 
234 
309 
658 
839 
42 
34 
45 

AT 
BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
HR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
PL 
PT 
RO 
SI 
SK 
FI 
SE 
Total 
Source: VVA, WMU and Admaris (2023), Impact assessment support study; Note: For DE the average number of 
FS inspections for 2014-2020 is reported.  

1876 
740 
36 
728 
9 

896 
90 
39 
1 
0 

150 
248 
8,108 

8 
50 
1,956 

8 
9 

38 
27 
0 
25 
16 
265 
155 
17 
20 
39 
11 
4 
0 

22 
27 
22 
23 
16 

24 
21 
789 

116 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNEX 12: DISCARDED POLICY MEASURES AND OPTIONS 

This Annex presents the discarded policy measures and options and the reasons for discarding them. 

A) Discarded policy measures 

Policy measure 

Short description 

Reason for discarding 

Aligning the 
requirement of 
high competence 
standards of 
seafarers under 
the STCW 

The Standards for Training 
Certification and Watchkeeping 
Convention (STCW) establishes 
basic requirements for seafarers on 
an international level, which 
signatory countries are obliged to 
meet or exceed. 

Training under this Convention is 
different from the training referred 
to for carrying out flag State 
inspections. 

Clarifying the 
definition of 
seafarer 

This definition stems from the 
STCW Convention. 

training  of  seafarers 

While 
is  covered  under 
obligations incumbent on a flag State in the III-Code, 
the  EU  has  made  this  more  specific  already  via  a 
separate legal act  (Directive  (EU)  2019/1159  on the 
minimum  level  of  training  of  seafarers),  as  a  key 
feature  of 
the  EU  maritime  safety  policy.  It 
incorporates  into  EU  law  minimum  standards  of 
training, certification and watchkeeping for seafarers 
serving on board EU vessels which are fixed by the 
STCW Convention adopted by IMO in 1978.  

Introducing an alignment in the FSD would not yield 
any added value or additional results. 
Such  a  clarification  would  have  to  be  done  in 
Directive  2008/106/EC,  based  on  a  change  in  the 
STCW Convention, once agreed. 

This is also not covered in the III-Code. 
Introducing an alignment in the FSD would not yield 
any added value or additional results; instead it could 
cause confusion/legal conflict. 
Given  its  importance  MLC  was  reflected  into  EU 
law 
legal  act  -  Directive 
2013/54/EU    concerning    certain    flag    State  
responsibilities 
  and  
enforcement  of  the  Maritime  Labour  Convention. 

through  a  separate 

  compliance 

  with 

  for 

Introducing  clarifications  in  the  FSD  will  not  yield 
any added value or additional results. 
For  the  same  reason  as  above  regarding  MLC  -  not 
covered  by  the  III-Code  -  it  was  recognised  that 
designing  a  purposeful  such  criteria  based  on 
publicly  available  objective  data  will  be  very 
difficult.  

In  the  consultations,  this  measure  did  not  receive 
support from a majority of maritime administrations.  
They  did  not  see  any  issue  in  keeping  the  FSD  and 
Regulation  No  789/2004  without  cross  references. 
Furthermore  the  latter  has  a  more  limited  scope 
(cargo and passenger ships only).  
No  benefits  of  an  additional  EU  measure  in  this 
regard were identified either. 

Clarifying flag 
State 
responsibilities 
relating to social 
matters (MLC 
2006) 

Introducing 
indicators 
focusing on the 
labour supplying 
aspects 

Cross 
referencing the 
FSD with 
Regulation No 
789/2004 on 
transfer of ships 
between registers 

The Maritime Labour Convention 
adopted by ILO relates to important 
social rights for seafarers.  

It is not one of the Conventions 
adopted by IMO and does not fall 
under the III-Code or IMO Audit. 

This policy measure was considered 
in the context of introducing a more 
refined scheme for measuring the 
performance of flag States.   

Regulation No 789/2004 has as 
objective the establishment and 
functioning of the internal market 
and involves the elimination of 
technical barriers to the transfer of 
cargo and passenger ships between 
the registers of Member States.  
While respecting maritime safety, 
its objective and application are 
different addressing cargo and 

117 

 
 
 
 
 
 
 
 
Further 
clarifying 
applicability of 
Quality 
Management 
System to all 
registers under a 
flag 

Introduce 
guidance on 
remote survey, 
online approval 
of measures, 
equivalents and 
exemptions 

Introducing 
environmental 
indicators for the 
risk profile of 
ships 

Introducing a 
reference in the 
Directive to the 
policy objectives 
of the European 
Green Deal 

passengers ships as ‘goods’ in free 
circulation on the internal market. 
The Regulation requirements may 
indirectly benefit from the 
digitalisation measure in the FSD as 
regards sharing of ship related 
information digitally. 
It was misinterpreted in one case but 
corrected. 
The scope is clear and the QMS 
covers all operational parts of the 
flag related activities of its 
administration under that flag, 
irrespective of if the flag has a 1st, 
2nd or other type of register.  
This is the same in scope as the 
IMO audit also covers 1st and 2nd 
Registers. 
This measure was looked into at the 
height of the COVID-19 pandemic 
when lockdowns affected the ability 
of flags or port States to do physical 
inspections of ships. Today the 
situation has normalised again. 

This policy measure was initially 
contemplated for flag State 
inspections, and while nothing is 
preventing any such inspection to 
have such a focus, in the discussions 
with MS it has become clear that 
such a measure fits better in the port 
State control revision (where the 
safety risk profile already exists).  

This policy measure was included to 
reflect the key priorities of the 
Commission. While there is no 
specific mention to decarbonisation, 
the Directive already covers 
pollution prevention from ships. 
This is done via MS as flag States 
having to respect MARPOL which 
covers all types of pollution in water 
MARPOL Annex I-V) and in the air 
(MARPOL Annex VI).  

118 

This  is  a  matter  of  implementation  and  starting 
infringement procedures by the Commission, should 
such a situation be identified.  
It  has  so  far  not  led  to  any  infringement  on  those 
specific  grounds;  the  only  infringement  case  related 
to a MS not having any certified QMS at all.  
No  benefit  of  an  additional  EU  measure  in  this 
regard was identified. 

The  measure  will  be  covered  indirectly  through  the 
digitalisation measures foreseen for the FSD. 
The  IMO  is  also  looking  at  developing  some 
guidance on remote surveys and MS are keen on first 
pursuing such developments internationally, together 
with all EU MS, via Union submissions to IMO. 

No  benefits  of  an  additional  more  specific  EU 
measure in this regard were identified. What may be 
agreed at IMO level will be directed to States in their 
capacity as flag (and possibly port) States 
This policy measure did not receive much support in 
the  consultations  and  it  was  generally  considered 
better  suited  for  the  revision  of  the  PSC  Directive 
where this will be included. 
to 
Environmental 
decarbonisation, but is an all embracing concept and 
in particular related to dangerous and polluting goods 
(e.g.  Heavy  Fuel  Oil)  that  can  cause  pollution  in 
water.  As  such  this  is  already  covered  in  flag  State 
inspections  as  well  as  statutory  surveys  (MARPOL 
related  rules).  Introducing  it  in  legal  terms  in  the 
FSD would not provide any EU added value.  

refers 

only 

risk 

not 

In  the  consultations  this  measure  did  not  get  much 
support  on  the  grounds  that  it  was  not  clear  what  it 
would add in relation to what is already covered. The 
European  Green Deal covers prevention of all types 
of  pollution,  including  pollution  into  water,  even  if 
decarbonisation is the most urgent. 

regarding  de-
Should  new  or  stronger 
carbonisation  at 
(e.g. 
MARPOL  convention)  get  agreed  and  enter  into 
force, these will fall on the flag States to implement 

rules 
international 

level 

the 

 
 
 
 
 
 
 
This measure aimed to make these 
non-mandatory elements in the III-
Code mandatory for EU MS. 

Introduce 
mandatory 
minimum 
education 
requirements for 
FS inspectors 

This measure would define and 
stipulate exact technical 
requirements for setting up e-
registers at national level. 

Stipulate uniform 
technical 
standards for 
establishing e-
registers at 
national level 
(Full technical 
harmonisation) 

Require MS to 
do all first 
Statutory surveys 

This measure would strengthen the 
current requirement (Article 4) 
where a ship wants to change flag 

improved  safety 

and ensure in the same way as the current pollution 
prevention rules166. 
This measure was included with a view to make the 
part of the III-Code (part 2 paragraphs 29-32) which 
is  non-mandatory,  mandatory  for  EU  MS.    Such  a 
measure  would  fall  under  a  different  legal  basis  of 
the Treaty and where MS have stronger powers and 
competence.  Furthermore, it is a fact that the set-up 
and  structure  of  a  maritime  administration  varies  a 
lot  between  the  EU  MS.  In  particular  for  those  that 
are  part  of  the  Coast  Guard  structure  and/or  the 
Navy,  such  requirements  are  different  and  the 
training to get qualifications different (without in any 
way being inferior). Such a mandatory requirements 
would have a likely high impact on some MS. As the 
objective  of  such  a  measure  is  to  try  to  come  to  a 
better  and  more  harmonised  understanding  of  how 
flag  State  inspections  could  be  carried  out,  the 
qualification  to  become  inspector  is  best  left  to  the 
national  system  and  level  (respecting  Article 166  of 
the  Treaty).  There  would  otherwise  be  a  risk  to 
introduce a change that would not necessarily lead to 
any 
inspections  or  even  be 
counterproductive  in  attracting  technical  staff  to 
become flag State inspectors. 
This  measure  was  also  not  favoured 
consultations. 
The objective  with such a policy  measure  would  be 
to  ensure  that  all  such  e-registers  can  communicate 
and  thereby  achieve  an  EU-wide  harmonisation 
enabling  exchange  of  relevant  information  e.g.  e-
certificates.  In  the  assessment  of  this  measure  it 
became  clear  that  there  is  an  inherent  risk  in  how 
defining  such  a  ‘standard’  which  may  be  outdated 
already at the time the revised Directive would enter 
into 
technological 
developments.   
In the consultations with both MS and industry it was 
also  pointed  out  that  such  a  measure  would  not  be 
technically neutral and may actually stifle innovative 
solutions.   
As  the  objective  is  to  have  interoperability  that 
ensures sharing of information in a flexible way, this 
measure was not considered the best way to achieve 
the objective and therefore discarded. 
While it is not too long ago that this was the standard 
practice  among  most  EU  flag  administrations,  the 
past 15 years have seen an increasing use of RO’s to 

force,  given 

rapid 

the 

the 

in 

166  It  was  noted  that  nothing  in  this  initiative  prevents  FS  responsibilities  generally  in  relation  to  e.g.  the  Zero  pollution 
action  plan  or  in  relation  to  relevant  aspects  stemming  from  the  European  Green  Deal  such  as  the  FuelEUMaritime 
initiative on the use of renewable and low carbon fuels as well as potential links with other EU environmental legislation. 

119 

 
 
 
 
                                                           
and issue first 
certificates 
(using own 
technical staff 
and not RO’s) 

and would require that such first 
statutory surveys should be done by 
exclusive staff of the flag 
administration. 

perform  such  statutory  work  and  issue  the  related 
statutory  certificates  on  behalf  of  the  flag  States. 
Today  almost  all  EU  MS  use  RO’s  to  a  very  large 
extent.  This  measure  would  require  the  MS  to 
actually have the staff with the technical capability to 
do  all  such  statutory  surveys  and  to  keep  that 
knowledge constantly updated. The objective was to 
ensure  resources  within  the  flag  States  both  for 
survey and inspection as well as for RO monitoring. 
However,  it  has  been  pointed  out  both  by  MS  and 
industry that even if such resources (posts) would be 
made available there is no guarantee that a flag State 
would  be  able  to  attract  and  finally  employ  such 
staff.  That  in  turn  could  then  be  counterproductive 
and  either  the  work  would  end  up  not  being 
performed to the same quality level as by a RO today 
or  not  being  performed  at  all.  In  both  cases  no 
improvement  in  safety  of  the  flagged  fleet  is 
expected.  

B) Discarded Policy Options 

Repeal of the flag State Directive: As explained in section 1, the 2018 Maritime Fitness Check showed the 
added  value  of  incorporating  international  rules  in  the  EU  legal  order,  making  them  enforceable.  During 
stakeholders’ consultations, no Member State opposed the incorporation of the III-Code or the IMO audit into 
EU  law,  confirming  the  Maritime  Fitness  Check  outcome  and  recommendations,  and  there  were  no 
requirements to repeal the Directive. 

Turn all the flag State relevant requirements of the III-Code into articles in the Directive: This is one 
possible legislative  technique,  however  it is very  cumbersome  and  places  an extra  burden  on  the Member 
States  in  terms  of  implementation,  i.e.  the  opposite  to  simplification  and  improvement  in  regulatory 
efficiency. Moreover, as the III-Code is already mandatory, the wording in a revised Directive would need to 
be exactly the same. Consequently, there is a risk of creating further legal uncertainty and confusion in case of 
future updates of the III-Code.  

Instead, reproducing the relevant flag State parts of the III-Code in an Annex to the Directive allows a certain 
flexibility when such changes occur. This is a legal technique used for many167 if not most of the legal acts 
incorporating IMO rules under the EU legal order. 

Turn the Directive into a Regulation (including turning all the flag State relevant requirements of the 
III-Code 
the  burden  on  Member  States  as  regards 
transposing/implementing a Directive, it is to be recalled that the FSD is only relevant for the Member States 
as flag States that have ships flying their flag. The flag sets the jurisdiction on board and vest those powers in 

into  articles):  While 

this  may  solve 

167  Directive  (EU)  2022/993  on  the  minimum  level  of  training  of  seafarers,  incorporating  the  IMO  STCW  convention; 
Regulation (EC) No 336/2006 on the implementation of the International Safety Management Code; Regulation (EC) No 
725/2004 on enhancing ship and port facility security, incorporating the International Ship and Port Facility Security Code 
(ISPS  Code);  Directive  2001/96/EC  establishing  harmonised  requirements  and  procedures  for  the  safe  loading  and 
unloading of bulk Carriers, incorporating the IMO Code of Practice for the Safe Loading and Unloading of Bulk Carriers 
(BLUCode).   

120 

 
 
 
 
                                                           
the master of the ship. It is for these reasons more appropriate to leave to the Member States “the choice of 
form and methods” for reaching the objectives of the Directive, or in other words, to leave them room for 
adapting/embedding the Union acquis into the respective national context, given that there is no homogeneity 
between Member States and their flagged fleets in terms of type, size and operations and a wide variety as to 
their administrative set up as flag administrations. 

Merge Directive 2013/54/EU168 on enforcement of the Maritime Labour Convention (MLC) as well as 
Regulation (EC) No 789/2004169 on transfers of ships between registers, into the FSD:  This has been 
identified in the Maritime Fitness Check as a possibility to explore - all relevant rules would be consolidated 
into one piece of legislation. The approach would be not to change anything in the legal text, but simply insert 
the articles of the Regulation and the Directive into the FSD. In the stakeholders’ consultations carried out, 
none of these two possible mergers were favoured. Additionally, the current focus of the revision of the FSD 
is to incorporate the III-Code and audit. This relates to international conventions adopted by IMO to which 
the  EU  Member  States  as  flag  States  are  contracting  parties.  The  IMO  audit  then  looks  if  the  IMO 
conventions concerned are duly respected. ILO conventions, like the MLC are not among IMO conventions 
and  not  under  the  scope  of  IMO  audit.  This  is  also  one  of  the  main  reasons  for  having  in  the  EU  legal 
framework a stand-alone Directive170. Another main reason why the approach to merge Regulation (EC) No 
789/2004 with the FSD was discarded is that the purpose of that Regulation is to avoid technical barriers to 
trade on the internal market – free movement of a ship as a ‘good’. And while it has to respect safety r ules, a 
Member  State  cannot  refuse  registration  on  grounds  that  the  incoming  ship  is  not  meeting  national 
requirements or certain other requirements imposed on top of international requirements, by national law. 

168  Directive  2013/54/EU  of  the  European  Parliament  and  of  the  Council  of  20  November  2013  concerning  certain  flag 
State responsibilities for compliance with and enforcement of the  Maritime Labour Convention, OJ L 329, 10.12.2013, p. 
1–4 
169 Regulation (EC) No 789/2004 of the European Parliament and of the Council of 21 April 2004 on the transfer of cargo 
and  passenger  ships  between  registers  within  the  Community  and  repealing  Council  Regulation  (EEC)  No  613/91,  OJ  L 
138, 30.4.2004, p. 19–23 
170  [Recital  10]  Although  Directive  2009/21/EC  of  the  European  Parliament  and  of  the  Council  governs  flag  State 
responsibilities,  incorporating  the  voluntary  IMO  Member  States  audit  scheme  into  Union  law,  and  introducing  the 
certification of quality of national maritime authorities, a separate Directive covering the maritime labour standards would 
be  more  appropriate  and  would  more  clearly  reflect  the  different  purposes  and  procedures,  without  affecting  Directive 
2009/21/EC 

121 

 
 
                                                           
ANNEX 13: RETAINED POLICY MEASURES 

This annex provides a more detailed description of the retained policy measures and their links to the specific 
objectives. 

Policy measure 

Short description 

Policy measures common across options 

PM1: Incorporate the 
relevant flag State parts 
of the III-Code and 
maintain IMO Audit 
mandatory 

PM2: Nominate 
European 
Commission/EMSA as 
observes at IMO Audits 

This measure provides for full incorporation and alignment 
with the more recent flag State relevant parts of the III-
Code, already mandatory for MS, and maintains and aligns 
the requirement for MS to undergo the IMO Audit, making 
them both enforceable under the Directive. It would reflect 
the relevant IMO Resolution in its most up to date version 
into Union law and make it enforceable, by fully reflecting 
all the relevant parts (1 and 2) of the III-Code in an annex 
of the Directive, with some adaptions for aspects that are 
already covered by EU-law specifically.  
This measure will in practice not change the current 
situation for Member States. It will however ensure full 
alignment and a consolidated incorporation of the 
international rules, and avoid the current fragmented 
implementation. This provides legal certainty and more 
harmonised implementation across the EU. 

The measure would be supported by PM2, by allowing 
EMSA to start a visits programme, checking 
implementation in MS on behalf of the Commission. 
Through the possibility to enforce the relevant flag State 
rules of the III-Code at EU level the possibilities to 
exercise influence resulting in particular in a better control 
of the fleet and ROs would increase, which should mean 
enhanced safety level and control. 

This measure entails the requirement for the European 
Commission and/or EMSA to be included by the Member 
State as flag State audited, as observers during IMO 
Audits. This would enhance the synergies between the 
EMSA visits and inspection programme and the IMO 
Audits. It will ensure a certain level of transparency and 
peer control on the one hand, and, on the other hand, 
provide enhanced support to Member States by way of 
exchanging experience between them in preparation of 
undergoing future IMO Audits, with support from EMSA. 

122 

Link to a specific 
objective 

SO1: Align the Flag 
State Directive with 
new international 
rules 

SO1: Align the Flag 
State Directive with 
new international 
rules 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy measure 

Short description 

Link to a specific 
objective 

PM3: Establish a flag 
State expert group to 
promote cooperation 
between the Member 
States and the European 
Commission 

That may improve the overall quality of all EU MS flags 
and capacity to control their fleet. PM2 will in practice not 
change the situation for Member States or impose any 
additional burden, since such assistance from EMSA has 
already taken place for a number of Member States, on 
their initiative. It will only require planning to ensure that 
such visits are back-to-back with the IMO Audits, bearing 
in mind that about 3 MS will undergo the IMO Audit per 
year in a 7 year cycle.  

This measure foresees improved cooperation between the 
Commission and Member States through the creation of a 
dedicated flag State expert group (in a similar way as the 
already existing ones for discussing port and coastal State 
issues).  

It would draw together flag State experts and inspectors, 
with EMSA and Commission experts, to discuss a range of 
issues, such as: 

 

 

 

common approach to FS inspections; procedures 
and guidelines for the control of ships; 
common reporting format for FS inspections/RO 
monitoring; 
technical development of the performance criteria 
related to PM4 as well as the technical method for 
use in PM10 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

SO4: Ensure a 
harmonised approach 
in the understanding, 
reporting and 
measuring 
performance of flag 
State fleets and duties 

 

  how to use the information related to PM4, PM5 
and PM6 for preparation of FS inspections/RO 
monitoring; 
the mechanics of the EU RO oversight and 
monitoring scheme foreseen in PM7; 
comparing findings and propose follow-up action; 

 
  maximise use/pooling of resources for ROs 

PM4: Modernise the way 
Flag State performance is 
measured 

monitoring e.g. by focus areas. 

This measure would contain an element of ‘peer review’ 
allowing a gradual development of a common 
understanding and approach to operational issues. 
This measure builds on the exploratory work already 
undertaken for a refinement of the current scheme (Art 
8.2) for measuring flag State performance. It will be done 
via a delegated act (comitology) which will define a set of 
key performance indicators. Considering the changes 
brought by the Paris MoU to the method used to calculate 

123 

SO4: Ensure a 
harmonised approach 
in the understanding, 
reporting and 
measuring 
performance of flag 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Link to a specific 
objective 

State fleets and duties 

Policy measure 

Short description 

the White-Grey-Black list (WGB) which will be included 
in the revised PSC Directive, as well as the ongoing work 
for measuring performance of ROs, this cannot be 
specified in the FSD at this moment. The Paris MoU list 
ranks flag States in accordance with the PSC performance 
of the vessels flying their flag. The method previously 
used was shown to be unfair to fleets with small numbers 
of ships, which was recognised and the Paris MoU adopted 
a more deterministic formula. Hence the current single 
criterion for measuring flag State performance based on 
PSC detention records is outdated.  

PM4 will therefore consider a more refined way to 
measure flag State performance with the aim to also 
support the flag State administrations in identifying any 
weaknesses and therefore lead to continuous improvement. 
This would be done in full consultation with MS and 
industry, via comitology.  

PM5:  Introduce a 
technical solution for use 
by the Member States 
requiring: (i) e-certificate 
registry, reporting of (ii) 
e-certificates, (iii) e-FS 
inspection reports, 
enabling  exchange and 
sharing of information 
between the Member 
States and with EU-wide 
systems (hosted in 
EMSA) 

With regard to digitalisation, this measure is in essence 
mirroring what is the case for PSC reporting but on the 
side of flag States. This measure would require the 
development (building on the existing technical work in 
EMSA) and operational use of an interoperable technical 
solution to connect the existing systems of the Member 
States to: 
(i) have digitalised e-certificate registers (but leave it to 
MS to decide how, as long as they are interoperable with 
central systems, hosted in EMSA); 
(ii) use and share e-certificates; 
(iii) report Flag State inspections in e-format. 

SO3: Ensure higher 
uptake of digital 
solutions 

SO4: Ensure a 
harmonised approach 
in the understanding, 
reporting and 
measuring 
performance of flag 
State fleets and duties 

This measure will affect MS that do not allow ROs to issue 
e-certificates on their behalf. 

All information must be exchanged between MS and with 
EU-wide systems hosted in EMSA, as an enabler for 
efficient capacity building (PM8) and performance 
measurements (PM4) as well as for an efficient monitoring 
and oversight scheme (PM7).  

PM5 and PM6 will ensure consistency between the FSD 
and the PSC Directive as regards the use and acceptance of 
e-certificates. As such they will support more efficient 
handling and inspection of ships by both flag States and 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy measure 

Short description 

Link to a specific 
objective 

port States in the EU and enhance efficiency for the 
industry (ship owners). 

PM6: Develop a 
mechanism and template 
for reporting information 
and statistics 

This measure codifies an already ongoing development, 
requested by MS and undertaken by EMSA, for collecting 
on a regular and transparent basis and in a harmonised 
format statistics and data on the MS administrations and 
flagged fleet. 

SO3 and SO4 

PM7: Specify EU 
Oversight programme of 
flagged fleet and RO’s 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

SO4: Ensure a 
harmonised approach 
in the understanding, 
reporting and 
measuring 
performance of flag 
State fleets and duties 

As concerns harmonised inspection/monitoring, this 
measure further specifies and requires what MS should do 
in terms of supplementary inspection of their vessels and 
in monitoring Recognised Organisations (ROs) working 
on their behalf, both individually and as part of an EU 
oversight programme. These requirements are already 
included in the III-Code and mandatory but they are not 
precise enough and leave too much room of interpretation 
for MS, thus not ensuring a harmonised approach for 
supplementary inspections and monitoring.  

This is the key operational aspect of a flag State in 
monitoring and maintaining control of the ships under its 
flag and responsibility. Demands to the flag State for 
issuing or maintaining certificates is the tool for 
enforcement that shipowners/operators continue to adhere 
to under the international (and possible national) rules.  

Two elements will be specified to harmonise the way in 
which such required oversight should be done in an EU-
oversight programme: 
(1) Flag State inspections (supplementary i.e. not those 
leading to statutory certification) for verification that the 
ship continues to meet the requirements for the certificates 
as issued by or on behalf of the flag States and;  
(2) oversight of the statutory survey work performed by 
the RO on behalf of the flag States on its flagged ships.  

MS would be required to participate in an EU-oversight 
programme based on technical specifications developed by 
the expert group set up in PM3 and supported by EMSA. 
This will on the one hand, have an impact on MS as there 
would be a possible need for additional resources, 
especially for MS with a large fleet. On the other hand 
such an oversight programme would allow MS to share 
findings. It would allow better planning of flag State 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy measure 

Short description 

Link to a specific 
objective 

PM8: Introduce common 
capacity building and 
harmonised training 
(post-qualification) for 
Flag State inspectors / 
surveyors / auditors 

inspections and monitoring of ROs, avoiding duplication 
of such activities among MS and being more focussed. 
This would benefit enforcement and lead to transparency. 

The oversight programme would be linked with the EMSA 
quality inspections of RO’s performed on behalf of the 
Commission as well as the Commission’s assessment 
thereof and PSC reports, with a view to create synergies 
for all MS and possibilities for pooling of expertise for 
improved control and enforcement of safety of the EU MS 
flagged fleet, which can eventually increase its 
attractiveness. 

This measure introduces a common harmonised training 
(post-qualification) for flag State 
inspectors/surveyors/auditors, without specifying any 
national educational requirements leading to qualification. 
The measure can build on the experience with the port 
State control and include continuous updating and 
refreshing of knowledge of inspectors (as international 
rules evolve and new elements e.g. in the field of 
environmental protection will be introduced and become 
applicable e.g. via MARPOL).  

Training and capacity building are fundamental elements 
for ensuring the right technical expertise. The aim would 
be a common core curricula agreed with MS as that would 
ensure a higher level of harmonisation. Such capacity 
building and harmonised training will be provided by 
EMSA. 

Policy measures different across options 

PM9a: Define flag State 
inspector to prevent the 
use of non-exclusive 
technical staff 

This measure consists in a requirement clarifying that only 
exclusive technical staff directly employed by the 
administration can be used for flag State inspections and 
ROs monitoring (like it is the case if a flag State does 
statutory work). Some MS use ‘free-lancers’ (non-
exclusive personnel), mainly to save on costs, the control 
of which is not ensured (in terms of for example 
appropriate qualifications and/or conflict of interest) nor 
included under any national training or quality 
management system. This results in no clear lines of 
responsibilities in performance of tasks under controlled 
conditions. PM9a introduces a definition of flag State 

126 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

SO4: Ensure a 
harmonised approach 
in the understanding, 
reporting and 
measuring 
performance of flag 
State fleets and duties 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy measure 

Short description 

Link to a specific 
objective 

inspector, not allowing the use of such non-exclusives, 
which is a measure over and above the requirement of the 
III-Code. 

This measure will have an impact on those MS that use 
non-exclusive surveyors, meaning that they are legally 
required to increase the number of their exclusive 
surveyors. It would also have the effect of a more level 
playing field. 

The drawback is that even if a FS administration would get 
the resources there is no guarantee they will be able to 
attract the technical expertise needed. For some of the big 
flag States using such non-exclusive staff, the element of 
travel will also become a factor, as they need to be able to 
provide such inspections all over the world. 

This measure would not explicitly forbid the use of non-
exclusives but would specify under what circumstances 
flag States can use other technical personnel i.e. if work is 
precisely described (not statutory); if such staff have 
proven qualification and training for the work; if the work 
is supervised and the report is signed off by a flag State 
inspector, plus such technical personnel is free from any 
commercial, financial or other interests in the ship subject 
to inspection. 

This will be specified in relation to the existing 
requirement for MS to maintain and update a Quality 
Management System for their flag State related parts 
certified. 

This measures will have less impact than PM9a on MS 
using such non-exclusive staff and recognise the possible 
difficulty in attracting technical expertise, and instead 
focus on the quality of the work performed rather than the 
status of the person performing it. 

This measure would introduce a requirement which would 
specify the number of flag State inspections, 
commensurate with the size and type of fleet e.g. by 
establishing a ratio between the minimum number of flag 
State inspectors and ship and/or flag State inspectors and 
RO or a percentage of flag State inspections that should be 
performed on the flagged fleet every year – to achieve a 

127 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

PM9b: Frame when non-
statutory staff can be 
used and for what 
inspections 

PM10: Introduce specific 
requirement regarding 
inspections, 
commensurate with the 
size and type of fleet  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy measure 

Short description 

Link to a specific 
objective 

higher level of harmonisation with regard to inspection 
and control.  

PM10 would be done in full consultation with MS and 
industry, via comitology. There is a very wide difference 
in the extent to which FS inspections are actually done and 
there is therefore a need to gain experience first. For the 
assessment, it is assumed that 25% of the MS flagged fleet 
would be inspected per year, in line with the current EU 
level average, so that the entire fleet would be inspected 
over a four year period. 

The impact is expected to be higher for those MS that do 
not do any flag State inspections. On the other hand the 
requirement to do flag State inspections is already 
mandatory in the III-Code. Without more precise 
requirements the current situation may lead in time to 
unfair competitive advantage for flag States not doing any 
flag State inspections or very few. 

PM11a: Require flag 
States to do the 
International Safety 
Management (ISM) audit 
and issue ISM 
Certificates (Statutory), 
combined with a number 
of flag States inspections 
to be performed  

The approach for PM11a, while not specified in the III-
Code, is a more general requirement that a flag State only 
issues international certificates to a ship after it has 
determined that the ship meets all applicable standards. 
That is normally done by surveying/inspecting the ship. 
Current Article 4.1 includes a requirement to assess, where 
possible, a vessel flagging-in before issuing the 
certificates, but the requirement is not firm or specific and 
some MS may do so, others may not or not to the same 
extent. 

SO2: Ensure adequate 
inspections and 
monitoring/oversight 

PM11a introduces the requirement that MS shall perform 
statutory surveys and issue the first certificates when the 
vessel is registered under their flag for the first time 
(thereafter ROs will continue to survey the vessels in so 
far as MS use RO’s) in relation to survey/audit for the 
International Safety Management Code (ISM) only, which 
is a reduced scope of work as compared to doing all 
statutory surveys. 

This measure would also introduce a requirement which 
would specify the number of flag State inspections, 
commensurate with the size and type of fleet. This would 
be done in full consultation with MS and industry, via 
comitology. For the assessment, it is assumed that 10% of 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy measure 

Short description 

Link to a specific 
objective 

PM11b: Require full 
statutory survey by flag 
States when ‘high risk’ 
ships wish to register 
under a MS flag 

SO2: Ensure adequate 
inspections and 
monitoring/oversight  

the MS flagged fleet would be inspected per year, so that 
the entire fleet would be inspected over a ten year period.  

PO11b introduces the requirement on MS to perform the 
first survey and certification only for those vessels that 
have the status of ‘high risk ship’ (according to the PSC 
system THETIS) which will mean a reduction in the 
number of ships to be surveyed relative to PM11a. PM11b 
would however not be limited to ISM only but concern all 
statutory surveys. 

It will focus on ships that would be targeted in PSC as 
considered more risky based on the THETIS system risk 
factors. This means a more focussed approach on those 
ships that may pose a higher risk. 

MS will be required to have appropriate technical capacity 
and resources which could nevertheless also be used for 
PM7 (the RO oversight programme). 

129 

 
 
 
 
 
 
ANNEX 14: OTHER RELEVANT LEGISLATION 

Besides  the  III-Code  and  the  key  Directives  mentioned  in  section  1  (synergies  with  other  EU  policy 
instruments), there are other key regulatory obligations for flag States listed below: 

  Directive 2009/16/EC on port State control 

  Directive 2009/18/EC on maritime accident investigation 

  Directive 2009/15/EC on common rules and standards for ship inspection and survey organisations 

and for the relevant activities of maritime administrations 

  Regulation  (EC)  No  391/2009  on  common  rules  and  standards  for  ship  inspection  and  survey 

organisations (Recognised organisations) 

  Commission Implementing Directive 2014/111/EU  amending  Directive 2009/15/EC  with  regard 
to  the  adoption  by  the  International  maritime  Organisation  (IMO)  of  certain  codes  and  related 
amendments to certain conventions and protocols 

  Commission  Implementing  Regulation  (EU)  No  1355/2014  amending  Regulation  (EC)  No 
391/2009 with regard to the adoption by the International maritime Organisation (IMO) of certain 
codes and related amendments to certain conventions and protocols 

  Directive (EU) 2017/2110 on a system of inspections for the safe operation of ro-ro passenger ships 
and high-speed passenger craft in regular service and amending Directive 2009/16/EC and repealing 
Council Directive 1999/35/EC 

  Regulation (EC) No 1406/2002 establishing a European Maritime Safety Agency 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 15: EFFECTIVENESS OF THE DIFFERENT POLICY OPTIONS 

Key: Impacts expected 

 

 

O 

   

 

Strongly negative 

Negative  No or negligible 

Positive 

Strongly positive 

Unclear 

impact 

PO1 

PO2 

PO3 

PO4 

Specific policy objective 1: Align the Flag State Directive with new international rules 

Expected 
improvement in 
clarity and 
functioning of the 
internal market 

Positive effect in removing 
any ambiguity for flag States 
authorities having regard to 
the alignment of the Flag 
State Directive with the III-
Code, including the IMO 
Audit. Positive effect on the 
functioning of the internal 
market through improved 
clarity.  

for 

Positive effect in removing 
any  ambiguity 
flag 
States  authorities  having 
regard  to  the  alignment  of 
the  Flag  State  Directive 
with 
III-Code, 
including  the  IMO  Audit. 
the 
Positive  effect  on 
functioning  of  the  internal 
market  through  improved 
clarity.  

the 

Positive effect in removing 
any ambiguity for flag States 
authorities having regard to 
the alignment of the Flag 
State Directive with the III-
Code, including the IMO 
Audit. Positive effect on the 
functioning of the internal 
market through improved 
clarity.  

Positive effect in removing 
any ambiguity for flag States 
authorities having regard to 
the alignment of the Flag 
State Directive with the III-
Code, including the IMO 
Audit. Positive effect on the 
functioning of the internal 
market through improved 
clarity.  

Specific policy objective 2 – Ensure adequate inspections and monitoring/oversight 

Changes in the 
number of fatalities 
and injuries 
involving EU 
Member States 
flagged vessels 

impact  on 

Positive 
the 
number  of  lives  saved  and 
injuries  avoided,  although 
not  quantified,  through  the 
EU  Oversight  programme  of 
flagged fleet and RO’s.  

impact  on 

Positive 
the 
number  of  lives  saved  and 
injuries  avoided,  although 
not  quantified,  through  the 
EU  Oversight  programme 
of flagged fleet and RO’s. 

impact  on 

Positive 
the 
number  of  lives  saved  and 
injuries  avoided,  although 
not  quantified,  through  the 
EU  Oversight  programme  of 
flagged fleet and RO’s. 

impact  on 

Positive 
the 
number  of  lives  saved  and 
injuries  avoided,  although 
not  quantified,  through  the 
EU Oversight programme of 
flagged fleet and RO’s. 

Positive 

impact  on 

the 

Positive 

impact  on 

the 

Positive 

impact  on 

the 

131 

 
 
 
 
 
 
Key: Impacts expected 

 

 

O 

   

 

Strongly negative 

Negative  No or negligible 

Positive 

Strongly positive 

Unclear 

impact 

PO1 

Changes in the 
number of tonnes of 
bunker fuel lost at 
sea involving EU 
Member States 
flagged vessel 

programme 

impact  on 

Positive 
the 
environment,  although  not 
quantified,  through  the  EU 
Oversight 
of 
flagged  fleet  and  RO’s.  This 
is expected to have a positive 
the  quality  of 
impact  on 
marine 
and 
water 
biodiversity. 

PO2 

PO3 

PO4 

number  of  lives  saved  and 
injuries  avoided  (69  lives 
saved  and  810 
injuries 
avoided) during 2025-2050 
relative  to  the  baseline  by 
means 
specific 
of 
requirements 
regarding 
inspections,  commensurate 
with  the  size  and  type  of 
fleet.  

number  of  lives  saved  and 
injuries  avoided  (11  lives 
saved 
injuries 
and  180 
avoided)  during  2025-2050 
relative  to  the  baseline  by 
means 
International 
Safety  Management  (ISM) 
audit,  combined  with  a 
number  of  FS  inspections  to 
be performed.  

of 

number  of  lives  saved  and 
injuries  avoided  (16  injuries 
avoided)  during  2025-2050 
relative  to  the  baseline  by 
statutory 
means  of 
survey  by  FS  when  ‘high 
risk’  ships  wish  to  register 
under a MS flag.  

full 

impact  on 

Positive 
the 
environment,  although  not 
quantified, through the EU 
Oversight  programme  of 
flagged fleet and RO’s.  

impact  on 

Positive 
the 
environment,  although  not 
quantified,  through  the  EU 
Oversight  programme  of 
flagged fleet and RO’s.  

impact  on 

Positive 
the 
environment,  although  not 
quantified,  through  the  EU 
Oversight  programme  of 
flagged fleet and RO’s.  

impact  on 

Positive 
the 
environment  (1,418  tonnes 
of bunker fuel lost avoided 
between  2025  and  2050, 
relative to the baseline) by 
means 
specific 
of 
regarding 
requirements 
inspections,  commensurate 
with  the  size  and  type  of 

132 

fuel 

impact  on 

Positive 
the 
environment  (321  tonnes  of 
lost  avoided 
bunker 
between  2025  and  2050, 
relative  to  the  baseline)  by 
means 
International 
Safety  Management  (ISM) 
audit,  combined  with  a 
number  of  FS  inspections  to 

of 

fuel 

impact  on 

Positive 
the 
environment  (31  tonnes  of 
lost  avoided 
bunker 
between  2025  and  2050, 
relative  to  the  baseline)  by 
means  of 
statutory 
survey  by  FS  when  ‘high 
risk’  ships  wish  to  register 
under  a  MS  flag.  This  is 

full 

 
 
 
 
 
 
Key: Impacts expected 

 

 

O 

   

 

Strongly negative 

Negative  No or negligible 

Positive 

Strongly positive 

Unclear 

impact 

PO1 

PO2 

PO3 

PO4 

fleet.  This  is  expected  to 
have  a  positive  impact  on 
the quality of marine water 
and biodiversity. 

is 
performed.  This 
be 
expected  to  have  a  positive 
impact  on  the  quality  of 
marine 
and 
biodiversity. 

water 

expected  to  have  a  positive 
impact  on  the  quality  of 
marine 
and 
biodiversity. 

water 

Specific policy objective 3: Ensure a higher uptake of digital solutions  

Enforcement costs 
savings for flag State 
authorities due to the 
uptake of digital 
solutions 

Positive impact on 
enforcement costs for flag 
State authorities. Cost saving 
estimated at EUR 47.7 to 
50.8 million, expressed as 
present value over the period 
2025-2050 relative to the 
baseline. 

Positive impact on 
enforcement costs for flag 
State authorities. Cost 
saving estimated at EUR 
48.8 to 52.9 million, 
expressed as present value 
over the period 2025-2050 
relative to the baseline. 

Positive impact on 
enforcement costs for flag 
State authorities. Cost saving 
estimated at EUR 48 to 51.3 
million, expressed as present 
value over the period 2025-
2050 relative to the baseline. 

Positive impact on 
enforcement costs for flag 
State authorities. Cost saving 
estimated at EUR 47.7 to 
50.8 million, expressed as 
present value over the period 
2025-2050 relative to the 
baseline. 

Adjustment costs 
savings for ship 
operators due to the 
uptake of digital 
solutions 

Positive impact on 
adjustment costs for ship 
operators. Cost saving 
estimated at EUR 0.4 to 0.9 
million, expressed as present 
value over the period 2025-
2050 relative to the baseline. 

Positive impact on 
adjustment costs for ship 
operators. Cost saving 
estimated at EUR 0.6 to 
1.2 million, expressed as 
present value over the 
period 2025-2050 relative 
to the baseline. 

Positive impact on 
adjustment costs for ship 
operators. Cost saving 
estimated at EUR 0.5 to 1 
million, expressed as present 
value over the period 2025-
2050 relative to the baseline. 

Positive impact on 
adjustment costs for ship 
operators. Cost saving 
estimated at EUR 0.4 to 0.9 
million, expressed as present 
value over the period 2025-
2050 relative to the baseline. 

133 

 
 
 
 
 
 
Key: Impacts expected 

 

 

O 

   

 

Strongly negative 

Negative  No or negligible 

Positive 

Strongly positive 

Unclear 

impact 

PO1 

PO2 

PO3 

PO4 

Specific policy objective 4: Ensure a harmonised approach in the understanding, reporting and measuring performance of flag State fleets and duties 

Increased 
compliance and 
convergence in the 
application of the 
rules between MS 
flagged fleets 

Positive impact by better 
understanding of the rules and 
more harmonised approach so 
that in the end it should not 
matter, from a safety point of 
view, under which EU MS 
flag a ship sails. They should 
all be subjected to the same 
control and ensure 
compliance, leading to quality 
shipping.  

Positive impact by better 
understanding of the rules 
and more harmonised 
approach so that in the end 
it should not matter, from a 
safety point of view, under 
which EU MS flag a ship 
sails. They should all be 
subjected to the same 
control and ensure 
compliance, leading to 
quality shipping.  

Positive impact by better 
understanding of the rules 
and more harmonised 
approach so that in the end it 
should not matter, from a 
safety point of view, under 
which EU MS flag a ship 
sails. They should all be 
subjected to the same control 
and ensure compliance, 
leading to quality shipping.  

Positive impact by better 
understanding of the rules 
and more harmonised 
approach so that in the end it 
should not matter, from a 
safety point of view, under 
which EU MS flag a ship 
sails. They should all be 
subjected to the same control 
and ensure compliance, 
leading to quality shipping.  

134