The ship registry is the register in which the principal data relating to vessels are officially kept. The details of the system were first set out in our legislation by the Ship Registry Regulation. The decisive weight of vessels in commerce made it necessary for the provisions on maritime law and maritime trade to be regulated in detail within the Turkish Commercial Code No. 6102. Since the vessel is the essential element of maritime law and of maritime trade, the Code has also defined the merchant vessel separately:
Turkish Commercial Code Art. 391(2)
"Every vessel allocated to the purpose of obtaining economic benefit on water, or actually used for such a purpose, shall be deemed a "merchant vessel", by whomsoever and in whose name or on whose account it may be used."
Vessels engaged in commercial activity must be entered in the registry. Nor is this obligation confined to merchant vessels; all vessels bearing certain characteristics must be registered, whatever their purpose of use. The reason why registration is made compulsory is that the registry does not merely show the statutory allegiance of the vessel but also serves the creation and establishment of rights in rem over it.
(Right in rem: rights which confer direct dominion over a movable or an immovable and which may be asserted against everyone. Turkish Language Association)
In this briefing note we address the link between maritime trade and the registry, the functions the registry performs, the National Ship Registry, the Turkish International Ship Registry, the registry for vessels under construction and the procedure for registration in these registries.
Functions of the Ship Registry
Beyond being an instrument of control as regards the nationality of the vessel, the ship registry also produces multifaceted consequences in the field of private law. Entries concerning rights in rem are as a rule declaratory in character; by contrast, the role of the registry in the creation of mortgages and rights of usufruct, and in the acquisition of ownership by prescription, is constitutive.
As with the trade registry and the land registry, the ship registry is subject to the principle of publicity. Keeping the entries open to everyone facilitates individual scrutiny. A presumption is also attached to the registry entries to the effect that the right of ownership, the powers arising from a ship mortgage and the right of usufruct belong to the persons shown in the registry.
Perhaps the weightiest function of the registry is that it provides public reliance. As with the land registry, the ship registry generates this reliance. That all the entries and particulars written in the registry are deemed correct as regards a person who acquires, by a legal transaction, ownership, usufruct or a mortgage over a vessel, or another right over a mortgage, is a direct consequence of the principle of public reliance.
The Link Between Maritime Trade and the Ship Registry
Transport forms the backbone of both domestic and international trade, and today approximately 90% of international trade is conducted by sea. The basic components of that trade are vessels, the cargo carried, shipowners and the States which the vessel represents by flying their flag. As on land, intensive supervisory mechanisms operate at sea as well; ship registries, as one of the pillars of that mechanism, occupy a critical place in securing commercial safety.
The registry may be described in short as the identity of the vessel. Just as a person without an identity document cannot leave the country by lawful means, a vessel entered in no registry cannot take part in commercial activity in international waters. The registry may be characterised as the passport required for a vessel to carry cargo and to make headway in national and international waters. According to the approach in the literature, a vessel belonging to no State, or carrying the flag of more than one State, cannot be reconciled with legal certainty. The reason is that the flag flying at the vessel’s mast is regarded, wherever in the world the vessel may be, as an extension of that State’s land territory; the acts and transactions carried out are likewise shaped according to that flag and that State.
As noted above, trade is a field that requires supervision, and for it to function soundly transport must also be trouble-free, lawful and open to inspection. That companies or merchants pursuing their commercial activity should encounter no difficulty at the carriage stage, and that the cargo should reach its destination on time and undamaged, depends upon access to the essential information concerning the vessel performing the carriage. For the person who has the cargo carried by sea, that is to say the shipper, the registry entry of the vessel is therefore of great importance. For where a contract is concluded with a vessel entered in no registry, the legal protection of the shipper is weakened if the cargo fails to reach its destination, and the likelihood of a loss of rights increases markedly.
From the standpoint of determining legal relationships and of transactional security, the registry has been defined in the Turkish literature in the following terms: "The ship registry is a register dedicated to the recording of vessels." Statutes generally contain provisions directed at giving publicity to legal transactions that are of economic importance and that concern third parties. In the case of immovables this publicity is provided through the land registry, in the case of merchants through the trade registry, and in the case of vessels through the ship registry. Turkish maritime commercial law contains three separate registries: the National Ship Registry, the Registry Specific to Vessels Under Construction and the Turkish International Registry.
The National Ship Registry and the Registration Procedure
The registry to which vessels used in maritime trade belong is called the national registry; the picture is the same for every State with a coastline. That allegiance is determined according to the law of the country to which the owner of the vessel, the ship operating contractor charged with operating a vessel of which he is not the owner, the shipowner who uses his vessel in maritime trade, or the person who takes over the vessel within the framework of a legal relationship other than these capacities, is subject. The National Ship Registry (MGS) created in Türkiye on the basis of the Turkish Commercial Code falls within this framework.
The National Ship Registry is regulated in Articles 954 et seq. of the Turkish Commercial Code and is referred to in the text of the Code by the expression "ship registry". Those provisions deal in detail with such matters as the manner in which the registries are kept, the documents required for registration and deletion from the registry. There are entered in the registry merchant vessels holding the right to fly the Turkish flag pursuant to Turkish Commercial Code Art. 940, together with the vessels enumerated in subparagraphs (a) and (c) of the second paragraph of Turkish Commercial Code Art. 935.
Turkish Commercial Code Art. 935(2), subparagraph (a)
"Its Parts entitled "Vessel", "Master", "Maritime Claims" and "Special Provisions Concerning Enforced Execution", its Chapters entitled "Collision" and "Salvage", its provisions on the limitation of liability for maritime claims, and its Article 1062 concerning the liability of the shipowner arising from the fault of the crew, shall apply to vessels dedicated solely to the purposes of recreation, sport, education, instruction and science, such as yachts and seafarer training vessels,"
Turkish Commercial Code Art. 935(2), subparagraph (c)
"The second paragraph of Article 944 and Articles 945, 947, 948 and 949 concerning the flag certificate, Articles 955, 956, 973 and 991 concerning the registry, Article 1013 concerning the statutory mortgage, and Articles 1054 to 1058 concerning rights over vessels under construction, shall also apply, to the extent compatible with their nature, to vessels being built in Türkiye in the name of a foreign State or of its nationals"
In addition to those enumerated in that paragraph, pursuant to Art. 957 the owner of every merchant vessel of 18 gross tons or more is obliged to apply for registration. As a rule the registration is carried out by the registry directorate to which the port of registry is attached. Where, by contrast, the voyages of the vessel are managed from a foreign port, from an inland city or directly from the vessel itself, the owner may have the vessel registered in the registry of any place he chooses.
The National Ship Registries prepare the ground for transactions such as the creation of pledges and attachment. By examining the registry, third parties are able to see in advance the matters operating in their favour and against them in the legal relationship they are about to enter into. The registry also confers on the State concerned a power of examination and supervision in respect of the assessment, accrual and collection of taxes, duties and charges; the cases of exception and exemption relating to these items are likewise established by reference to the registry. Alongside these, the determination of the right of vessels to fly a flag, the establishment of the port of registry and the ascertainment of tonnages may also be counted among the functions the registries perform.
Registration in the National Ship Registry is laid down in Article 959 of the Turkish Commercial Code:
Turkish Commercial Code Art. 959
"A vessel shall be entered in the ship registry only upon the request of the owner or of one of the owners. The request shall be made by petition."
The particulars that must appear in the petition are set out in Art. 960:
Turkish Commercial Code Art. 960
"The following matters shall be notified together with the request for registration:
a) The name of the vessel.
b) Its type and the principal material used in its construction.
c) The port of registry.
d) Where it is possible to establish them, the place where it was built and the year of its launching.
e) The official measurement results and the engine power.
f) The owner of the vessel;
1. If a natural person, his name and surname, Turkish identity number, trade name if any, and the trade registry directorate in which he is registered together with the registry number.
2. If a commercial company, the type of the company, its trade name and the trade registry directorate in which it is registered together with the registry number.
3. If one of the other legal persons, its name and its centre.
4. If a shipping partnership, where it has the capacity of merchant, its trade name together with the names and surnames of the co-owning shipowners, their Turkish identity numbers if any, the amount of the vessel shares, and the name and surname and Turkish identity number of the ship manager, if any.
g) The cause of acquisition.
h) The grounds constituting the basis of the right to fly the Turkish flag.
i) In the case set out in the third paragraph of Article 955, the name, surname, Turkish identity number and address of the representative."
Following the drawing up of a petition containing all the particulars enumerated above and the completion of the documents required by Art. 961, the ship registry is kept in such places as the Ministry of Transport, Maritime Affairs and Communications may consider appropriate. The details relating to this heading are addressed in a separate study on "The Turkish Vessel and the Right to Fly the Turkish Flag".
The Turkish International Ship Registry and Registration
The Turkish International Ship Registry Act (TUGSK) entered our legislation by Act No. 4490 of 16 December 1999. At the time the bill was prepared, the reason why such an international registry was needed was explained under the heading "general grounds" in the following terms:
"That 91% of Türkiye’s foreign trade is carried out by sea and that the vessels operated by Turkish shipowners hold an important share of the carriage market on the world’s seas; that, however, the high cost of the modern investments required in order to meet port State inspections and the minimum technical elements sought by survey organisations has caused shipowners to turn to cheap labour and productivity to fall; and that an international ship registry should be established in Türkiye in order to prevent our fleet from shrinking on account of the demand for convenient registries, and in order to have foreign shipowners operate under our country’s flag, thereby securing their taxation in our country and an inflow of foreign currency"
As can be seen, TUGS was added to maritime trade and to our legislation in line with the need that arose as the sphere of dominance of maritime trade in Türkiye expanded.
By means of the method of establishing an international registry, certain States that are not regarded as particularly strong in terms of economic scale and the size of their merchant fleet are increasing the number of vessels flying their flag. The rise in that number is of considerable importance for States; both facility in imports and exports arises and, through the taxation of every vessel flying their flag, resources are provided to the economy. The general character of TUGS may be summarised in this way. Looking at practice, it is apparent that countries engaged in maritime trade have halted the contraction of their fleets by means of secondary registries, and that States aware of the volume of maritime trade have taken their measures in this way.
A further factor that played a part in the process of adopting TUGSK was that the provision in the repealed Turkish Commercial Code Art. 824, which allowed a foreign vessel to fly the Turkish flag for a maximum of two years, was set aside on account of the condition of non-terminability laid down in Articles 7 and 8 of the Financial Leasing Act (FFK).
To summarise briefly: having regard to Türkiye’s geopolitical position and the volume of its port activity, shipping is a sector that makes a significant contribution to the economy. The purpose in adopting TUGSK is not merely to protect the Turkish merchant fleet but also to strengthen the economy by bringing foreign-flagged vessels into the fleet. In the Turkish economy, which is founded on the principle of the free market, keeping vessels under the Turkish flag and drawing them away from the fleets of countries that appear more advantageous in financial terms is possible only through the advantages to be accorded to Turkish vessels and yachts.
Registration in the Turkish International Ship Registry is regulated in Article 5 of the Act No. 4490 on the Turkish International Ship Registry and on the Amendment of Decree-Law No. 491. Accordingly, vessels and yachts owned by Turkish nationals resident in Türkiye, by foreign persons whose domicile is in Türkiye and by companies established under Turkish law may be entered in this registry. The Act has also determined the types of vessel that may be entered in TUGS: passenger vessels used for commercial purposes, deep-sea fishing vessels, special-purpose and specially built vessels, and yachts likewise operated for commercial purposes. The matter is defined in this way in TUGSK Art. 2(a) and TUGSY Art. 4(5)(a). A detailed assessment of the registry entries of vessels in the international sphere is to be found in the study entitled "The Registration of Vessels and Yachts in Third Countries".
The Registry for Vessels Under Construction
As its name indicates, this registry is the register in which vessels whose construction has not yet been completed and which have not yet become seaworthy are entered. Taking as a basis the economic value borne by these craft even though their construction is unfinished, the legislator saw a legal interest in their being recorded as well, and established a separate registry system serving that purpose alone.
The registry for vessels under construction is also known in practice as the "building registry". Since the definition of "vessel" made in Turkish Commercial Code Art. 931 covers seaworthy craft, the absence of a field of legal protection and regulation in respect of vessels still under construction would create a gap giving rise to danger. The importance borne by the building registry stems from this.
A further point to be noted is that building registries are likewise subject to the general rules applicable to the ship registry. This registry is among the official registries open to the public; the legal liability arising from its keeping therefore rests with the State. Building registries are also kept by the ship registry directorates.
Among the advantages afforded by the building registry, the following two possibilities stand out: that, where credit is needed during the construction process, the vessel under construction may be accepted as security for that credit by way of registration without any need to transfer possession, that is to say without the construction being interrupted; and, likewise, that preliminary and executory attachment may be applied without halting the construction.
The registry specific to vessels under construction is defined in Turkish Commercial Code Art. 986. As is apparent from the definition, registration in this registry may be made only upon the request of the owner. The vessel under construction is registered by the registry directorate to which the place of construction is attached. The form and content of the request for registration are set out in Art. 987 and Art. 988:
Turkish Commercial Code Arts. 987 – 988
"1. Request for registration
a) Form ARTICLE 987-
(1) A vessel under construction shall be entered in the registry specific to vessels under construction upon the petition of its owner or of the shipyard owner who wishes to have his statutory mortgage right registered.
(2) A creditor who has obtained a decision of preliminary or executory attachment may also request the entry of the vessel under construction in the registry by means of a letter from the enforcement officer.
b) Content ARTICLE 988-
(1) The following matters shall be notified together with the request for registration:
a) The type of the vessel under construction together with its name or number, or any mark serving to distinguish it.
b) The place of construction and the shipyard at which the vessel is being built.
c) Its owner.
(2) The existence of the conditions deemed necessary in the second paragraph of Article 1054 for the creation of a ship mortgage over the vessel under construction shall be proved by a document to be issued by the competent ship measurement body."
Detailed information on the other transactions relating to these registries, which we have explained under separate headings, is to be found in the separate study on "The Registration, Deletion and Rectification of Ownership of Vessels in the Registry".
Independent Legal Assessment
In practice the ship registry is often seen as a purely administrative formality; yet the registry entry is the legal basis of almost every transaction relating to a vessel, from its financing and the taking of security over it to its sale and enforced execution. That entries concerning rights in rem have declaratory effect, while in mortgage and usufruct they have constitutive effect, ties the question of which right is acquired at which moment directly to the registry data.
Which registry is to be chosen is a commercial decision as much as a technical one. Since the conditions and the tax regime of the National Ship Registry and of the Turkish International Ship Registry differ, the type of the vessel, its purpose of use and the operating structure must be assessed together before the decision is taken. In a given file the following headings should be given priority:
- Establishing the position of the vessel in relation to the 18 gross ton threshold and whether registration is compulsory or optional
- Showing clearly in the registration petition the ground on which the right to fly the Turkish flag is based
- Analysing the choice between the National Ship Registry and TUGS together with its financial and operational consequences
- Correctly determining the competent registry directorate where the port of registry differs from the place from which the voyages are managed
- Where a vessel under construction is to be financed, conducting the entry in the building registry and the application for the statutory mortgage simultaneously
- Keeping pledges, attachments and annotations up to date in the registry so that they may be asserted against third parties
Independent Legal provides advisory services and conducts litigation in the field of maritime commercial law in respect of ship registry transactions, changes of flag, ship finance and disputes arising from the registry.