For States, vessels are not merely commercial instruments but also national assets of high economic and strategic value. This character is not peculiar to the present day; since ancient times vessels have been regarded, beyond their military and commercial functions, as the visible sign of State sovereignty in ports and on the high seas. Indeed, in earlier periods the anchoring of a vessel belonging to a foreign State in the port of another country could be treated as a threat to sovereignty.
The value that States attach to vessels also produces favourable consequences for shipowners and for the development of maritime trade. A vessel that continuously calls at foreign ports encounters different procedures and principles in each country it visits, which increases the likelihood of difficulties arising in ports or in international waters. In such cases both the conventions concluded between States and the consulates and diplomatic missions in the country concerned offer mechanisms from which assistance may be sought in respect of problems arising in a foreign port. The nationality of a vessel is determined by the flag it flies; in international terminology this link is expressed through the concept of the flag State.
In Turkish law the subject is addressed along two separate axes: the acquisition of the right to fly the flag and the actual exercise of that right. Flying the Turkish flag on a vessel also means acquiring Turkish nationality for it. This right is granted exclusively to Turkish vessels, while flying the Turkish flag is prescribed as an obligation for every Turkish vessel. Below we examine the creation of the right, the procedure for its exercise, its loss and its treatment under the Turkish International Ship Registry in separate sections.
Acquisition of the Right to Fly the Turkish Flag
The source of the right is Article 940 of the Turkish Commercial Code No. 6102. The provision lays down the rule with the words "Every Turkish vessel shall fly the Turkish flag", while which vessels are to be regarded as Turkish is determined in detail according to the capacity of the owner.
Vessels Owned by Natural Persons
Vessels owned by natural persons are subject to two distinct assessments according to the number of owners. Where the vessel belongs to a single natural person, the condition sought is that the owner be Turkish. This requirement is laid down in the second paragraph of Turkish Commercial Code Art. 940.
Where there is more than one owner, it becomes material whether the ownership is held in co-ownership by shares or in joint ownership. In co-ownership by shares the criterion is determined by reference to the shares: where the co-owner holding the majority of the shares is a Turkish citizen, the Turkish flag may be flown on the vessel. In joint ownership, by contrast, no calculation of shares is made; here it is required that the majority of the owners be Turkish. If the majority of the co-owners possess this quality, the vessel is accepted as a Turkish vessel and obtains the right to fly the flag.
Vessels Owned by Legal Persons
In the case of vessels belonging to institutions, organisations, associations and foundations having legal personality and established under Turkish law, the decisive factor is the nationality of the persons who make up the governing body. If the majority of those sitting on that body hold Turkish citizenship, the vessel is accorded the status of a Turkish vessel and the right to fly the flag arises. The basis of this arrangement is Turkish Commercial Code Art. 940(4)(a).
For vessels belonging to Turkish commercial companies the conditions are more detailed. In addition to the company having been established within the framework of Turkish law, the majority of the persons in the management of the company must, as with foundations and associations, be Turkish citizens. Beyond this, it is required that the articles of association place the majority of votes with the Turkish shareholders. In joint stock companies and in limited partnerships whose capital is divided into shares, the majority of the shares must be registered shares and the transfer of such shares to a foreigner must be made subject to the consent of the company’s board of directors. Where these conditions are satisfied together, the vessel acquires the status of a Turkish vessel.
Finally, vessels owned by shipping partnerships regulated in Turkish Commercial Code Art. 1064 and entered in the Turkish Trade Registry are also included in the list. For such vessels to be regarded as Turkish vessels and to fly the Turkish flag, more than half of their shares must belong to Turkish citizens.
Conditions Under Which a Foreign Vessel May Fly the Turkish Flag
Vessels meeting none of the above criteria, and therefore not regarded as Turkish vessels, are accepted as foreign vessels. Nevertheless, foreign vessels are afforded the possibility of flying the Turkish flag on certain conditions. Where the vessel has been left to Turkish citizens to be operated for a period of at least one year; where the owner’s consent has been obtained; where the provisions of Turkish legislation concerning the master and the crew are complied with; and where there is no rule in the foreign law to which the vessel is subject preventing this, permission to fly the flag may be granted by the Ministry of Transport and Infrastructure.
The obligations of the owner do not come to an end upon the grant of permission. The holder of the permission must prove every two years that the conditions sought continue to be met. Furthermore, Turkish Commercial Code Art. 941 provides that foreign vessels acquiring the right to fly the Turkish flag in this manner are to be entered in a special registry. The text of the provision is as follows:
Turkish Commercial Code Art. 941 — II- Exceptions
"(1) Where a Turkish vessel has been left, for a period of at least one year, to be operated in their own name by persons who, were it to belong to them, would lose the right to fly the Turkish flag, the Ministry of Transport, Maritime Affairs and Communications may, upon the request of the owner, permit the vessel to fly a foreign flag for the duration of the transfer, provided that the laws of that country make this possible. Unless this permission comes to an end or is withdrawn for statutory reasons, the vessel may not fly the Turkish flag.
(2) Where a vessel that is not a Turkish vessel has been left, for a period of at least one year, to be operated in their own name by persons who may fly the Turkish flag on it, the Ministry of Transport, Maritime Affairs and Communications may permit the vessel to fly the Turkish flag, on condition that the owner’s consent has been obtained, that the provisions of Turkish legislation concerning masters and ships’ officers are complied with, and that there is no provision in the foreign law preventing this. However, the person obtaining the permission is obliged to prove, every two years, that the conditions required for the permission continue to exist.
(3) The vessels referred to in the second paragraph shall be entered in a special registry to be kept by the Ministry of Transport, Maritime Affairs and Communications."
The registration of Turkish vessels before foreign registries is a separate subject of study; the registration of vessels and yachts in third countries constitutes a topic in its own right in practice.
Exercise of the Right to Fly the Turkish Flag
Although the wording is similar, the acquisition of the right to fly the flag and the exercise of that right are not the same thing. The ability of a Turkish vessel that has obtained the right actually to fly its flag depends upon completion of the procedure laid down in Turkish Commercial Code Art. 943.
The existence of the right is established by the document known as the ship registry certificate. Even if the vessel has acquired the right to fly the flag, it cannot actually exercise that right until this document has been obtained. The same article also makes it compulsory for a copy of the certificate approved by the registry directorate, or a flag certificate, to be kept on board throughout the voyage.
The Code lays down certain exceptions to this rule. Vessels which are not regarded as merchant vessels but which are subject to the Code in respect of the provisions indicated in Turkish Commercial Code Art. 953(2)(a) may exercise the right to fly the flag without a certificate. Vessels dedicated to recreation, sport, education, instruction and scientific purposes, together with seafarer training vessels and yachts, may be counted within this scope. In addition, pursuant to Turkish Commercial Code Art. 945, vessels of less than 18 gross tons may fly the flag without obtaining either a ship registry certificate or a flag certificate.
In some cases it is also possible to make do with a flag certificate alone. For example, where the obtaining of the ship registry certificate is likely to be delayed, a flag certificate may on its own be sufficient (Turkish Commercial Code Art. 345). Where the requirements of commercial life come to the fore, it may likewise be necessary for the right to be exercised on the basis of a flag certificate for as long as the ship registry certificate cannot be obtained.
The right to fly the flag may also be acquired while the vessel is outside Türkiye. In such a case the flag certificate issued by the Turkish consulate at the place where the vessel is situated takes the place of the ship registry certificate. Certificates are valid for one year from the date of their issue; however, where the voyage is extended for reasons of force majeure, the period of validity of the document is likewise extended. Turkish Commercial Code Art. 940 provides that vessels built in Türkiye but not holding the right to fly the Turkish flag may be issued with a valid certificate by the Ministry of Transport and Infrastructure so that they may make the voyage as far as the place of delivery.
Loss of the Right to Fly the Turkish Flag
The loss of the right is dealt with in Turkish Commercial Code Art. 942(1)(c)-1. The rule is simple: when the conditions on which the flying of the flag rests cease to exist, the right also lapses. This situation must be notified to the Ministry of Transport and Infrastructure without delay from the moment the right is lost.
Upon such notification the relevant unit may permit the Turkish flag to continue to be flown for a further six months after the loss of the right. This transitional possibility is laid down in Turkish Commercial Code Art. 942(1)(c)-2. Changes that may arise where, following the acquisition of the right to fly the flag, entry is made in the Turkish National Ship Registry or in the Turkish International Ship Registry must be assessed separately under the heading of the registration, deletion and rectification of ownership of vessels in the registry.
The Right to Fly the Flag Under the Turkish International Ship Registry Act
The Turkish International Ship Registry was created under the Turkish International Ship Registry Act No. 4490. The purpose behind bringing the Act and the registry organisation into force is to prevent vessels of our country from turning to the registries of the countries known as flags of convenience.
Flag of convenience States act with the motive of deriving revenue from every vessel entered in their registries and grant registered vessels wide-ranging financial facilities and privileges. Faced with this competition, the establishment in Türkiye of a ship registry structure supported by various privileges likewise became necessary. The authority to fly the flag has also been recognised in respect of vessels falling within the scope of Act No. 4490 governing that registry. The difference is that under this system the right arises together with the act of registration; it produces no legal consequence until the entry has been completed.
Independent Legal Assessment
The flag is not a symbolic detail concerning the appearance of a vessel but a legal link determining the applicable law, the supervisory authority and the mechanisms to be resorted to in the event of a dispute. For this reason, in sales of vessels and in financing and chartering transactions, the analysis of nationality must be carried out at the very outset of the transaction. In the case of legal person owners in particular, a change in the shareholding structure or in the governing body may frequently result in the conditions for flying the flag being lost without this being noticed.
Secondly, the distinction between the acquisition of the right and its exercise must not be overlooked. Flying the flag before the documentation has been completed may lead to the vessel encountering difficulties in inspections and to commercial plans being disrupted.
In practice it is appropriate to pay particular attention to the following points:
- Correctly determining the majority criterion sought according to whether the owner is a natural person or a legal person
- Ensuring that, in joint stock companies and limited partnerships whose capital is divided into shares, the requirements of registered shares and of transfer being subject to consent have been written into the articles of association
- Establishing by documentary evidence, for foreign vessels, the conditions of the one-year period of operation, the owner’s consent and the absence of any impediment in the foreign law
- Scheduling and monitoring the obligation of proof renewed every two years
- Ensuring throughout the voyage that the requirement to keep the ship registry certificate or the flag certificate on board is complied with
- Making the notification without delay where the conditions for flying the flag are lost, and planning for the six-month transitional period
Independent Legal provides advisory services and conducts litigation in matters of vessel nationality, registry and flag procedures and in disputes arising from maritime trade.