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Liberian Ship Registry

The Liberian Bureau of Maritime Affairs (BMA) is an autonomous agency within the Executive Branch charged with enforcing maritime law and other international conventions and administering the world's second-largest international ship registry which generates significant revenues for government. Apart from handling some national elements of the maritime regime - such as small craft registry and local regulations - the BMA has historically been primarily a political organization that represents the GOL in the international maritime sector, primarily the International Maritime Organization (IMO).

Liberia's ship registry, with over 2,978 Liberian-flagged vessels as of December 2008, is the second-largest in the world. In 1999, the GOL appointed the Liberia International Ship and Corporate Registry, LLC (LISCR) to manage the registry, including the collection of taxes, fees, charges and other amounts due to the GOL. LISCR is a purpose-made limited liability company registered in Delaware and based in Virginia. The legal basis for LISCR's appointment is an Act of the Liberian Legislature, an unusual measure intended to provide security to the LISCR investors who are, as per the statute, exclusively U.S. nationals.

After LISCR's appointment, the BMA largely lost touch with the management and affairs of the ship registry. Moreover, weak professional capacity at the BMA and poor overall governance during the initial years of the appointment encouraged LISCR to take increasing authority for other BMA responsibilities in order to reduce the risks to the registry. By 2006, LISCR, LLC played a primary role in dealing with ship-owners worldwide and, apart from involvement of an accredited diplomat to the IMO in London, was seen as the face of Liberia in the international maritime community.

After World War Two the ship registering program was protected from Liberian mainstream corruption by being headquartered on Park Avenue, New York City, and spreading to Reston, Virginia. The maritime program, which was conceived for Liberia by an American government, generates enough money - roughly $24 million a year - to make it worthwhile to be president of Liberia even if there were no other economic activities in the country.

Liberia began the ship registry program 1948 under President William V.S. Tubman, with the help of former Secretary of State Edward Stettinius. The group established the Registered Agent Office in New York City to register ships and corporations under the Liberian flag. On 11 March 1949, the first commercial vessel, the WORLD PEACE, owned by interests controlled by Mr. Stavros Niarchos, and under charter to Getty Oil Co., was registered under the Liberian Registry. After the death of Mr. Stettinius in 1950, the ownership of Liberian Services and its affiliates passed to the International Bank of Washington, DC. This company, known as IB, developed through the efforts of General George Olmsted, and the registry was contracted out to the American firm International Trust Company. Over the following four decades, the easy registration system made Liberia the number one registry in the world. The Liberian Registry, coupled with a bank in Monrovia, Liberia, operated by The International Trust Company of Liberia, grew to approximately 75 million gross tons in the mid 1970s. Liberia's government was the earliest to contract out its administration of a shipping registry to a private company.

During the war, Liberia depended heavily on the maritime funds, accounting for some 70% of government revenue. Due to the war in Liberia in the 1990s, Liberia fell to second place -- after Panama -- after Panama and Honduras began "open registry" programs.After the the civil war of 1990, International Registries, Inc., (as Liberian Services had become) entered into an agreement with the Republic of the Marshall Islands, to develop a new maritime and corporate program. International Registries, Inc. (IRI) was formed in 1990 as the parent corporation for its affiliates, and in 1993 IRI became a privately held company owned and operated by its senior employees. After he took over the government Charles Taylor signed a new contract for the program with Liberian International Ship & Corporate Registry (LISCR), and the program remained one of the few legal sources of income for the regime.

Liberia's Maritime program has been a source of pride, and controversy. The Liberian ship registry is the second largest in the world and a major source of revenue for the GOL (expected revenues of USD13 million in the 2007-08 budget represent roughly six percent of total government revenue). As the only stable and substantial source of revenue during the 1990s, the registry was often squeezed by government officials for revenues to fund the country's conflicts or for personal gain. The program was managed by the International Trust Company (ITC) until 1999 when President Charles Taylor's government awarded the contract to manage the maritime program to the Liberia Shipping and Corporate Registry (LISCR) based in Vienna, Virginia. Revenues from LISCR now flow directly to the Ministry of Finance without passing through the Bureau of Maritime Affairs (BMA).

Aside from the flow of revenues to the central budget, however, Liberians have benefited relatively little from the maritime sector. Ships that fly Liberia's "flag of convenience" are expected to employ Liberian nationals but the Liberian Seafarers and Port Workers Union of Liberia notes that the provision is rarely enforced. A generation of potential Liberian seafarers has been lost since the collapse of the Merchant Marine Academy in 1992.

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Page last modified: 07-10-2013 19:05:55 ZULU