CSC: New incentives and pricing to boost flag
New incentives and a pricing policy are being introduced as part of a wider National Shipping Strategy that will create advanced dynamics and help Cyprus “stay in the game” of world maritime industry, according to Thomas Kazakos, Director General of the Cyprus Shipping Chamber.
Having overcome the financial crisis in 2013, that has also helped revise the banking sector’s relationship with the shipping sector, Kazakos believes that the circumstances are favourable for Cyprus to exploit new opportunities.
Based on the findings of a study on the “Future of Shipping in Cyprus”, commissioned by the Ministry of Transport, “a positive momentum has been created towards the further enhancement of the service capabilities and capacity of the Cyprus Maritime Administration,” he said.
Cyprus has set a new course by expanding and developing the shipping sector and the flag even further, with the aim of remaining highly competitive.
“The key to responding to the new shipping environment and challenges is to remain attractive and to introduce intelligent measures that will give a competitive edge,” Kazakos said.
New incentives and a pricing policy will be introduced, while according to the findings of the recent study, a number of proposals have been put forward by the Chamber, with the sole purpose of enhancing even further the image and shipping infrastructure of Cyprus as a top-ranking shipping centre.
“By introducing specific measures based on the findings of the study, Cyprus will be able to maintain and develop even further a flexible, quality, user friendly and lessbureaucratic shipping environment that will encourage existing and future clients to register more ships and establish their base of operation in Cyprus,” Kazakos added.
Looking ahead, the CSC’s chief executive said that “the resumption of the negotiations for the solution of the Cyprus problem has created a positive climate, a development for which the Cyprus Shipping Chamber believes it should be promptly and constructively exploited.
“We are hopeful that the announcement of low-level ‘Confidence Building Measures’ from both communities will pave the way for the introduction of further high-policy Confidence Building Measures, such as the full lifting of the Turkish embargo on Cyprus ships, as a mutually acceptable solution will have positive benefits for the Cyprus Ship Registry and Cyprus shipping as a whole, not to mention the benefits for the EU and Turkey.
Furthermore, the recent discovery of offshore natural gas reserves near the coast of Cyprus creates even greater prospects for Cyprus shipping which will play a key role in gas and oil transportation by sea.
Now more than ever before, Cyprus needs a modern and even more efficient Maritime Administration to deal with shipping. Such a policy will also fit in well with the “EU Integrated Maritime Policy” and the spirit of the “Limassol Declaration” which was successfully concluded during the Cyprus EU Presidency in 2012.
“Through such measures, Cyprus will be able to create a positive i mpetus towards the medium and long-term development of its shipping industry without additional spending,” Kazakos said.
The Cyprus Registry currently ranks as the tenth largest merchant fleet worldwide and the third largest in the European Union with 1,000 ocean going vessels of a gross tonnage exceeding 20 mln.
Considering that Cyprus is, in effect, the only “EU approved Open Registry”, the new “Tonnage Tax” system gives Cyprus a competitive advantage over other EU maritime nations.
The new “Tonnage Tax” system contains most of the favourable features found in tonnage tax systems of other traditional EU maritime countries. It extends the favourable benefits applicable to owners of Cyprus flag vessels and shipmanagers, to owners of foreign flag vessels and charterers. What really makes the new incentives even more appealing is that any EU or even non-EU ship operator may benefit from this very competitive shipping taxation system and also be able to have a quality EU flag on their ships. Furthermore, by setting up therefore, a shipping company tax resident in Cyprus and having an EU flag ship either owned, managed or chartered, then the whole set of shipping companies based in third countries (non-EU flag ships) can also enter the new Cyprus competitive tonnage tax regime. In addition, there is no income tax on the wages of officers and crew employed on Cyprus flag ships.
From an implementation point of view, the Cyprus Maritime Administration is continually being strengthened with specialised personnel at the Shipping Department. A network of inspectors has been set up at the most important ports around the world which has contributed substantially to the increase of inspections of Cyprus-flag ships. Thus, the control mechanisms of the Department of Merchant Shipping have been improved with a direct impact on the number of detentions of Cyprus ships around the globe, in particular with regard to detentions for serious deficiencies.
Furthermore, taking into account the escalation of piracy, the Cyprus government and the Cyprus Shipping Chamber introduced a pioneering piece of legislation which governs the use of armed guards onboard Cyprus flag ships, which has been officially approved by parliament and is fully in force since 2012. Cyprus ship operators now have a fully legitimate tool to deter attacks and defend their cargoes and crews against Piracy.