New Restrictions on "Flags of Convenience"
The UAE coast-line has faced numerous events causing pollution in the last three years. In particular, vessels of certain Flag States, known internationally as "Flags of Convenience", have been alleged to regularly breach international laws on safety and the requirements of the International Maritime Organisation (IMO). In order to protect the local environment, and with reference to international reports and statistics, the UAE Cabinet called a meeting on 26 June 2001 to deliver Governmental Decree No. 23/2001 as a means of putting measures in place to decrease the risk of pollution from vessels, particularly tankers and other vessels carrying oil.

The Governmental Decree in question was published for the first time in the newspaper "Akhbar Al Arab" on Tuesday 26 June 2001 and we await a fuller version to be later published in the UAE Official Gazette. As preliminary comments, we can point out the following:-

1. Vessels of the following Flag States are not allowed to enter UAE Ports nor sail within UAE territorial waters or economic zone unless they have a valid Classification Certificate delivered by a UAE Ministry of Communications approved classification society. Such Flag States are:-

i. Albania
ii. Belize
iii. Honduras
iv. Georgia
v. St. Vincent & the Grenadines
vi. Mauritius
vii. Cambodia
viii. Maldives
ix. Bolivia
x. Comoros Islands

2. The Governmental Decree states that once the UAE Ministry of Communications receives further reports or statistics from international organisations showing that any other Flag State has a bad record for vessel safety, such Flag State may also be added to the list at the discretion of the Ministry.

3. With regard to vessels that are not in class but from the above-mentioned Flag States and are already working in UAE territorial waters with a navigational licence delivered by the UAE Ministry of Communications Marine Affairs Section, the same can work until the expiry of the current contract. Once expired, such contracts will not be further renewed.

4. The Governmental Decree states that the concerned authorities must arrest any vessel that fails to fulfil the requirements of the Decree. Again, the Governmental Decree does not state whether this is an arrest pursuant to Articles 115 - 117 of the UAE Maritime Law 1981, or whether this is simply a "detention" by the authorities of the various ports of the UAE (i.e. a form of "port state control").

5. The authorities are also to close all companies that represent the prohibited flags in the UAE and prohibit the setting up of similar companies. As far as we are aware, the Comoros Islands have representation in Ajman, and Belize and Honduras were formerly, but are no longer, represented in the UAE.

6. Any vessels breaching the above provisions may be sold in auction. However, any buyer purchasing the auctioned vessel must scrap the vessel and deposit during the auction procedure a bank guarantee which will only become payable upon such time that it is proved the vessel was actually scrapped. This is presumably to avoid the ongoing problem of vessels being purchased via judicial auctions and re-used for the same purpose as before in the Gulf oil trade.

7. The Governmental Decree is in our view useful to protect the environment of the UAE and to preserve its natural resources. The fact that the ten flag states will now be required to have valid Classification Certificates still allows vessels from such flag states to operate in the UAE, provided they have reached sufficient standards (i.e. in class). However, whilst there are clear criteria for choosing such flag states, we wonder whether the UAE authorities would not have been better off extending classification requirements to all vessels, or at least limiting the class requirement to all vessels wishing to carry oil into or out of UAE waters, rather than to pick on some flag states as opposed to others.