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  • 2008 April 21

    Alexey Klyavin: “Russian International Register of Vessels"

    PortNews IAA publishes the report of Alexey Klyavin, Director of the Department for the State Policy of Sea and River Transport of the RF Ministry of Transport, made at the conference ‘Russian International Register of Vessels: practice, problems and perspectives’ held April 16, 2008, in St. Petersburg:

    “State policy focused on revival of Russian maritime fleet and on improvement of its competitiveness at the global market of maritime transport services.

    “Considering the increasing competition of global economy including transport sphere and the requirements of World Trade Organization, General Agreement on Trade in Services as well as Organization for Economic Organization and Development, the period of direct protectionist measures on the background of almost complete liberalization of trade and shipping is over. The efforts of the majority of countries are focused on improvement of national transport’s competitiveness moving from ‘containment of rivals’ to ‘fight for the lead’.

    Stronger control over transportation of Russian goods and larger share of Russian shipping companies will contribute to market shaping in favor of national goods through introduction of privileges in international trading by the simplest instruments like cost of goods, reasonable level of shipping rates, terms of delivery, reliability and quality of delivery. Thus, it is obvious that the revival of Russia’s maritime fleet and improvement of its competitiveness as well as active support of national shipping industry are interlinked issues.

    At a meeting of the State Council and Maitime Board of the RF Government in Murmansk in May 2007, RF President said it is necessary to improve the competitiveness of Russian maritime transport through coordinated development of all the components of the industry. He also noted that maritime transport accounts for almost 90% of all international transportation in the work while in Russia it accounts for 60% of foreign trade turnover.

    The President also said “we should ensure stage-by-stage transition of vessels to the flag of Russia through doing this work without any delay”.

    To achieve the result considering intensified state support we think that the revival of Russian maritime fleet and improvement of its competitiveness should be based on the following parameters:
    - tax regulations for Russian ship owners should support competitive rates for cargo transportation at the global market of transport services;
    Probably it will require additional legislative and organizational decisions to improve the Register’s efficiency including, in particular, further decrease of tax load for shipping companies. (For example, in Germany ship owners aregranted a 50-percent reduction of tax for corporate income from transportation of foreign trade cargo by the vessels flying German flag. Beside, such vessels are exempt from fuel tax).
    - coordinated and prompt cooperation of federal executive authorities in solving the issues of maritime industry and in development of corresponding regulations.
    - compliance with all the requirements of international conventions related to safe navigation and technical state of vessels;
    - fleet modernization as it is generally admitted that a vessel should not be older than 12-15 years old to be competitive;
    - improvement of personnel training consider intensification of shipping as a whole and the increase of dangerous cargo transportation in particular.

    For the purpose of the Federal Law “On Amendments to Some Legislative Acts of the Russian Federation as to Creation of Russian International Register of Ships” No.168-FZ, signed by the Government of Russian Federation on 20 December 2005, a number of decrees were adopted by the RF Government including the decree on tariff privileges (No 448 dated June 16, 2007); on amendments into the decree on cargo transportation and tugging of coastal trade vessels flying the foreign flag (No 893 dated December 17, 2007). The draft order of the RF Ministry of Transport on approval of a provision regulating the procedure for granting the permits for cargo transportation and tugging of coastal trade vessels flying the foreign flag and those registered with the Russian International Register of Vessels is currently under consideration. There is a new law introducing amendments into the law regulating insurance aspects.

    As of today, the list of vessels registered with Russian International Register of Vessels numbers 197 vessels with total deadweight of up to 900,000 tonnes. At the initial stage of the Register’s functioning, it registered mainly sea-and-river going vessels, while there is a tendency of registering large-capacity sea-going vessels like the vessels of Murmansk Shipping Company, Novorossijsk Shipping Company, Sovcomflot, which registered its newly built large-capacity arctic tanker Vasili Dinkov and plans to register 4 more tankers laid down at Admiralty Shipyards.

    So we think the main task is not to return the old vessels to the flag of Russia but to attract the newbuildings so that the vessels flying Russian flag were a quality and reliability standard for the customers. It will take certain time to achieve considerable results in attracting of such vessels to the flag of Russia. The experience of foreign countries demonstrates it may take at least 3- 5 years.

    The process of actual registration revealed certain problems which we try to solve through joining our efforts with shipowners in order to make the Register more efficient.

    To summarize the above I would like to note that achievement of goals set up when creating Russian International Register of Vessels is an integrated task implementation of which will not only contribute to improvement of Russian fleet’s competitiveness but will have a multiplicative effect as well.
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