CSC: New in­cen­tives and pric­ing to boost flag

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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