Russian Seamen On Ships Under The Flag Of Convenience: Advantage Or Disadvantage?

Abstract

The modern merchant marine fleet does not fly the Flag of its owner or crew's country in most cases. 72 % of the world's fleet, by deadweight, sail under the so-called Flag of convenience. The use of a flag of convenience is inextricably linked with the reform of legal systems in business in the twentieth century. Flag of Convenience is now the dominant form of maritime business organization, beginning as a tool for American shipowners to move away from prohibitions. The salary costs of the ship's crew occupy a significant share in the composition of the vessel's operating expenses. In absolute terms, they can occupy the 2nd–3rd place among all shipboard expenses, after marine fuel. High taxes and other payroll charges typical for developed countries significantly increase this cost item if a vessel is registered in the traditional register of such a country. These tax costs, high legal protection of seafarers' rights in developed countries, together with the principle of freedom of the high seas, created conditions for a massive outflow of ships from traditional registers to offshore jurisdictions – under flags of convenience. At present, Russia is one of the three leading suppliers of professional seafarers for the world fleet. The paper examines the reasons for using Flag of convenience, the formation of the Soviet and Russian segment of maritime professions and estimates the potential income of the households of professional seafarers in the Russian Federation.

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Publication Date

31 March 2022

eBook ISBN

978-1-80296-124-9

Publisher

European Publisher

Volume

125

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-

Edition Number

1st Edition

Pages

1-1329

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Kondratyev, S. I., & Deruzhinskiy, G. V. (2022). Russian Seamen On Ships Under The Flag Of Convenience: Advantage Or Disadvantage?. In & I. Savchenko (Ed.), Freedom and Responsibility in Pivotal Times, vol 125. European Proceedings of Social and Behavioural Sciences (pp. 526-536). European Publisher. https://doi.org/10.15405/epsbs.2022.03.63