SSG No 10 - Shipgaz

taining the register would be only USD
35,000–50,000 per annum. The ministry
believes that within five years of the federal
law being passed, the income tax paid
by crews of the ships likely to be listed will
reach or exceed USD 20 million.
Many unsolved issues remaining
Despite the fact that the RIRS law reduces
the tax burden (property tax, profit tax and
transport tax) considerably, the process of
creating the second register has not been
very active because the mechanism for
its functioning has not yet been properly
thought through.
The majority of shipowners think that
the law requires a considerable amount
of supporting legislation to determine the
exact procedures of interaction with customs,
taxation and other control and direct
registration bodies. Some of the necessary
legislation has still to be passed, while some
was passed only recently.
Take, for instance, the issue of vessel
insurance, a vital aspect for shipowners. In
accordance with previous legislation Russian
shipping companies were not allowed
to insure their vessels abroad, but the maritime
insurance practices of Russian insurance
companies do not open for very large
amounts of compensation. That is why
mostly river-sea type vessels have been listed
during the first two years of the RIRS.
Moderate insurance cover is acceptable
for such vessels. Large shipowners prefer
to insure their vessels with foreign companies
that provide higher insurance cover.
The law allowing insurance of RIRS vessels
by any insurance company, in Russia
or abroad, was only passed in November
2007.
Not keen on registering
It was only in March 2008 that the Russian
Ministry of Finance set the long-promised
zero VAT rate on sales of newbuilt vessels
on the condition of their registration in the
RIRS. That is why, even with the introduction
of the second register, shipowners were
until recently not keen on registering their
vessels (especially new ones) under the Russian
flag. Of the 16 cargo vessels built last
year, only two were registered under the
Russian flag while the rest went for flags of
convenience.
We are now seeing signs of the situation
gradually changing. From October 2007
to January 2008 the RIRS registered four
large new vessels. Deliveries of a further
PäR-HENRIK SjöSTRöM
jOACHIM SjöSTRöM
The 7,365 DwT Sinegorsk, built in 1991.
27 vessels with a total DWT of 1.6 million
tons are planned for 2008. Of these vessels,
according to the data of the Ministry
of Transport, seven will be registered under
the Russian flag. Five of these are tankers
belonging to the Russian State Shipping
Company Sovcomflot, designed for operations
in the shelf conditions of the Far
North.
Breakthrough still a long way off
At present, approximately 200 vessels totalling
about 800,000 tons are listed in the
RIRS. According to the Russian Ministry
of Transport, at the beginning of 2008 Russia
controlled 1,471 vessels with a total
dead-weight capacity of 16.2 million tons,
and 63.9 per cent of that tonnage was operating
under foreign flags.
In the two years since the passing of the
SHIPPING AND SHIP MANAGEMENT
Due to legal issues on insurance of vessels, mostly river-sea type vessels have been listed
during the first two years of the RIRS.
Russian International Register of Ships
Act, it has become evident that until all
legal issues concerning the practical interaction
of the vessels and their owners with
the state are resolved, there will be no real
breakthrough in the transition of Russian
vessels to the Russian flag. Apparently the
second register will in the near future be
listing large cargo vessels built for coastal
transportation of oil and gas from the Arctic
region.
Alexey Klyavin, Director of the Department
of National Policy on Maritime and
River Transport with the Russian Ministry
of Transport, believes that attracting the
fleet to the second register will be a long
and capital-intensive process, as it is one
that even countries in the West have needed
between three and five years to complete.
artur gusseinov
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 71