HANSA 05-2017

Schifffahrt | Shipping
Europe at risk of losing ground
INTERNATIONAL MARITIME JOURNAL
FORUM
SCHIFFFAHRT
FINANZIERUNG
The traditional shipping centres in in the EU are still a heavyweight in the
maritime world, but competition is catching up. Regulators have to review
EU policy as emerging shipping hot spots gain appeal for international owners and operators
While in general the EU offers a competitive
framework for shipping,
some specific policies are less competitive
compared to other leading shipping centres.
Monitor Deloitte, commissioned by
the European Community Shipowners’
Association, has compared the EU to Singapore,
Hong Kong, Dubai, Shanghai, and
Vancouver. The analysts have devised a set
of policy recommendations on how to improve
Europe as a shipping location.
In November 2016, EU28 and Norway
owned 36.5% of the gross world tonnage,
whereas 46.2% were operated from
the same countries. However, compared to
the international growth centres, the EU is
experiencing a slower growth in terms of
the tonnage operated and owned. In recent
years, the EU has just been able to keep up
an annual growth rate equal to the world
average, while the most important international
shipping centres outside the EU have
had strong annual growth rates.
To what extent do European policies
support the long-term global competitiveness
or are they in fact contributing to the
relocation of companies activities as well
as further de-flagging outside Europe? Monitor
Deloitte found a number of important
gaps where the EU offers less attractive
or consistent policies.
Taxation and fiscal incentives
The ease of relocation of activities in combination
with the aggressive fiscal incentives
that other international centres offer suggest
that effective taxation is a »sine qua non
condition« to maintain a sizeable market
share. The current regime facilitated
by the Community Guidelines
on State aid to maritime transport
(2004/C 13/03, SAGs) provides for a relatively
competitive European shipping sector.
But Monitor Deloitte’s analysis reveals
that the EU framework is less competitive
with regard to several elements, including
eligibility criteria relating to the flag requirement
and the current ring-fencing
put in place by the European Commission.
The requirement of a flag link in the tonnage
tax regime is restricting the operational
freedom of owners and operators in the EU,
even though the SAGs contain a pragmatic
degree of flexibility regarding the use of EU
flags. In general, the choice of a flag is determined
by the standards practiced by the administration
as well as by costs and bureaucracy.
EU flags might not always provide the
most attractive commercial framework, and
requirements could lead to increased operating
costs or lack of market access.
Furthermore, the economic value of belonging
to a quality EU register for shipowners
has been eroded by the high level
of international harmonisation. Hence, by
insisting on a flag link eligibility requirement
for the special fiscal treatment, the
EU will lose attractiveness.
Economic and political factors
A significant gap has been identified, relating
to the application and legal status of
the SAGs. While in their current form they
provide a good framework, the freedom
of member states to tailor the framework
to their needs is restricted. The EU and
national interpretation of the SAGs is
based on legal grounds, but lacks flexibility,
whereas international centres
are often much more pragmatic
and business-friendly. This problem
is reinforced by the fact that
the SAGs are easily amenda-
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30 HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 5