Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i

Bill establishes administrator for registry

By Bernadette H. Carreon

KOROR, Palau (Palau Horizon), May 24, 2009) – The Senate approved on third and final reading the proposed measure which creates an open ship registry.

The new measure will impose tonnage taxes and fees for ship registrations.

This measure is one step to generate new revenues for the country.

The 107-page measure also establishes a ship registry administrator to oversee Palau’s ship registry.

The administrator will also be responsible for the promulgation of rules and regulations, hiring a Commissioner of Maritime Affairs deputy commissioners and special agents.

The Administrator will also have numerous other responsibilities, including collecting records, issuing licenses and collecting registration fees, suspending and revoking registrations pursuant to procedural requirements, issuing radio licenses, inspecting vessels and implementing rules for navigation and safety.

Under the Bill, any sea-going vessel not operating exclusively in Palau’s waters may be registered on Palau’s registry, provided that a "qualified person" owns it.

A "qualified person" is defined as a Palauan citizen, a corporation wholly owned by Palauan citizens, the National Government, or any person or corporation that the Minister of Industries, Infrastructure and Commerce determines is a qualified person. All vessels on Palau’s registry will have a home port of Malakal Harbor in the State of Koror except for fishing vessels, which will have a home part of Ngardmau Dock.

Under this Act, the government of Palau will be responsible for regulating ships on its registry, but vessel owners will bear the burden of maintaining their vessels to meet international standards of seaworthiness (Owners bear the costs of all required marine inspections, including safety inspections.

The Administrator may revoke the registration if a ship is found to have committed certain enumerated crimes.

These crimes are: storing or transportation of illegal drugs, human trafficking, involvement in war or armed conflict, support of civil unrest, terrorism, or other activities contrary to the laws of Palau or any international agreements to which Palau is a party.

The Administrator will set fees by regulation. The Bill recognizes that the appropriate costs will fluctuate based on world market conditions, and the Administrator is advised to set rates based on current market conditions. The Administrator will also establish annual tonnage taxes.

The measure is aimed at "encouraging and fostering the growth and development of the foreign and domestic commerce; to promote and protect the national defense and security of the Republic of Palau (hereinafter sometimes referred to as "the Republic"); to preserve and protect the marine environment; and to regulate a uniform national program of marine safety, inspection and documentation," the bill said.

The measure will cover vessels engaged in foreign trade and not exclusively owned by natural persons who are citizens or nationals of the Republic; all matters affecting the internal order and economy of vessels registered under the laws of the Republic engaged in foreign trade and domestic commerce, including labor relations, shall be governed by the measure.

  1. storage and transportation of illegal drugs;
  2. people smuggling, trafficking in persons or unlawful carriage of refugees;
  3. involvement in any war or armed conflict;
  4. supporting civil unrest in any State or territory;
  5. terrorism or activities in support of terrorism; and
  6. any other activity which would be contrary to the laws of the Republic of Palau or any international convention to which Palau is a party;

and the Registrar shall immediately cancel the registration of any ship which he or she has reasonable grounds to believe has been contrary to the provisions of the laws of the Republic of Palau or any international convention to which Palau is a party.

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