The European Commission's proposal for the establishment of the EUROS register of shipping has since 1989 appeared sporadically in various community documents despite being consistently struck down by the maritime nations.

The intention behind the 1989 proposal was for the EUROS to be an additional register that would supplement and exist alongside national registers although the tangible benefits that would accrue to owners as a result of this scheme were rather unclear.

Among the main arguments brought in favour of the EUROS register were the offering of favourable tax conditions in order to make it attractive to ship owners to fly the EUROS flag and in order to counter the problem of 'out flagging' to registers of third countries, the avoidance of severe loss of employment for Community nationals as a result of the transfer of ships to third country registers and ensuring compliance with and enforcement of maritime convention standards.

Despite further mention of EUROS in Council Regulation (EEC) No 3577/92 on maritime cabotage, the proposal was withdrawn by the Commission in 1997 following strong opposition by the Council.

Further attempts to resuscitate this proposal appeared in the European Parliament resolution on improving safety at sea in response to the Prestige incident of September 23, 2003 and in the November 23, 2005 announcement on the third set of legislative proposals relating to maritime safety. The Green Paper on Maritime Affairs provides the most recent tentative questioning of the viability of this proposal.

This proposal has potentially serious effects on the industry as a whole and on Malta with its strong maritime interests in particular. It is crucial to address whether the various concerns invoked as catalysts for the proposal will be resolved by the establishment of a European register of shipping.

The eradication of sub-standard tonnage is without doubt the main thrust and concern behind the proposal. A second facet would be that of ensuring the implementation of and compliance with international and EU standards relating to safety and anti pollution measures at sea by Flag States and of ensuring a high level of safety for the European fleet.

With regard to the first argument, we would respectfully suggest that the introduction of a single European flag would certainly not guarantee this aim to be achieved since the possibility of registering vessels outside the Union in less regulated jurisdictions would remain as an alternative to unscrupulous owners.

In addition, developments since the original 1989 proposal have to an extent addressed the concerns prevailing at the time. These include the adoption by the Commission of Guidelines on State Aid to Maritime Transport and the harmonisation of co-operation between member state national registers namely Council Regulation (EEC) No 613/91 on the transfer of ships from one register to another within the Community aiming at facilitating the administrative procedures of transferring ships between the registers of member states and at ensuring a high level of ship safety in compliance with international standards.

Importantly the principle of compliance with rules laid down in international maritime safety conventions, already featured in Council Directive 94/57/EC on common rules and standards for ship inspection and survey organisations is set to be further strengthened by the introduction of minimum criteria via current proposals forming part of the Erika III package.

The EU regulatory framework today which all member states are obliged to follow is therefore very different and much more rigorous to what it was in 1989 when the EUROS was first proposed.

On the other hand the aims of the Green Paper correctly include the encouragement of the development of the shipping and maritime traditions of Member States which would cover the generation of employment and generate a rise in the gross domestic product and economic development of coastal and island nations. Malta should therefore welcome with open arms the importance which the Commission has placed on the need for European island nations and coastal states to promote and encourage the growth of maritime activities.

Ship registration is a maritime activity par excellance. Thus member states should be encouraged to develop the growth of their respective flags in line with European directives on safety. That is precisely what Malta has done. We are very proud that between the Malta Maritime Authority which regulates the activity and the private practitioners who strive to attract the business and maintain it, we offer a first class product which has enabled the Malta flag to be the eighth largest flag in the world. We should be and are very proud of it.

Consequently we believe that the re-launching of a proposal for the introduction of a European ship register and creation of a European Flag would have very serious effects on the ability of member states including Malta, to have their individual shipping registers and this cannot but be viewed as being diametrically opposed to the achievement and preservation of the aim of developing shipping and maritime traditions of member states.

• Part three of this series will be carried on April 5.

• Dr Vassallo is an associate and Dr Fenech is a partner at Fenech and Fenech Advocates.

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