British Flag States

The Red Ensign Group (REG) is a group of British shipping registers, which are operated by: the UK; the Crown Dependencies (CDs) – Isle of Man, Guernsey and Jersey; and the UK Overseas Territories (UK OTs) – Anguilla, Bermuda, British Virgin Islands; Cayman Islands, Falkland Islands, Gibraltar; Montserrat, St Helena, Turks & Caicos Islands.

Any vessel on these registers is a ‘British ship’, and is entitled to fly the British Merchant Shipping flag the ‘Red Ensign’ – or a version of it defaced with the appropriate national colour. The registers are divided into two categories:

  • Category 1 – For vessels of unlimited tonnage and type, which includes Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Isle of Man and the UK.
  • Category 2 – In general, for commercial vessels of up to 150 gross registered tonnage (GRT); and vessels that are not operated commercially of up to 400 GRT. These rules are subject to some variation between registers. Category 2 Flag States include Anguilla, Falkland Islands, Guernsey, Jersey, Montserrat, St. Helena and the Turks & Caicos Islands. This depends on each flag state. While the general rule is the 150 limitation for commercial and 400 for please, Jersey for example allows yacht both commercial and pleasure up to 399GT. Guernsey on the other only accepts commercial and pleasure yachts up to 150.

As the Flag State and signatory to the International Conventions, the UK is responsible for representing the interests of the REG in international forums such as the International Maritime Organisation (IMO) and the International Labour Organisation (ILO).

The UK as the Flag State under international law for these ships has devolved to the CDs and UK OTs:

  • The authority and power to deal with all IMO flag-state matters; and
  • The implementation of the duties, obligations and responsibilities of a flag state under international conventions that have been extended to individual CDs and UK OTs, relating to the performance and safety of ships registered within these administrations, including Port State Control. These functions are devolved within the structure of the government of the flag-state.

All Statutory Certificates for British ships registered within the CDs and UK OTs, including endorsements relating to seafarers’ certification, are therefore issued under the responsibility of the UK.

The REG includes jurisdictions currently within the EU but outside the EU VAT area, such as Gibraltar, as well as non-EU jurisdictions that fall inside the EU VAT area, such as the Isle of Man. There can be significant tax and crew employment advantages, depending on the jurisdiction chosen.

The allocation of a vessel to a specific register will have an effect on safety regulations, crewing or discipline on board; the right to diplomatic protection and consular assistance, naval protection by the flag state or the right to fly the national flag. Other private law considerations are crucial for the protection of the title of the registered owner and preserving priorities between persons holding security interests over the vessel at sea.

English maritime law
The UK is the world’s leading centre for the provision of legal services to the international maritime community and English law is applied to shipping disputes far more widely than the law of any other country. English law is a familiar, popular and workable system of law, well known to practitioners, captains, brokers, bankers, builders, classification societies and generally to service providers within the yachting industry.

Whether a yacht is used as a private pleasure vessel or operated for commercial charter purposes, international and domestic law requires compliance with all safety and pollution prevention requirements set by the body of legislation that would apply to a vessel of her size. However, the design constrains of large yachts, the particular environment in which they are used and the manner in which they are commercially operated make the full application of IMO Conventions impractical.

Yacht Codes of practice
The UK Maritime and Coastguard Agency (MCA), on behalf of all REG members, has developed codes of practice to establish standards of safety and pollution prevention appropriate to the size and use of vessels in commercial usage for sport and pleasure – the Codes of Practice for Small Commercial Vessels (SCV) and ‘Red Ensign Group Yacht Code’, which consolidated the previous Large Yacht Code (LY3) and the Passenger Yacht Code (PYC) into a single regulatory framework for yachts as of 1 January 2019.

‘Part A’ of the new REG Yacht Code contains an updated version of LY3 and will continue to be applicable to yachts that are 24 metres and over in load line length, are in commercial use for sport or pleasure, do not carry cargo and do not carry more than 12 passengers. ‘Part B’ contains the latest version of the PYC applicable to pleasure yachts of any size, in private use or engaged in trade, which carry more than 12 but not more than 36 passengers and which do not carry cargo.

The REG Yacht Code has a ‘retrospective application clause’. This means that there are sections within the Code that will be applied not just to new vessels, but to existing vessels also that are currently certificated under the existing Large Yacht Code or Passenger Yacht Code, from the first annual survey after 1 January 2019.

The purpose of these codes is not to lower IMO safety standards but to adapt them to this special sector of the shipping industry. This substitution of alternative standards to those set at international level by Conventions with the force of law in the UK is expressly allowed by the text of the safety Conventions, which permit state administrations to set ‘equivalents’, provided that the administration concerned is satisfied that they are as satisfactory as those required by the Conventions. Highlighted in the Code are the necessary steps required to adapt to the IMO’s new four-yearly adoption and amendment cycle for its Conventions to which the Codes form equivalences.

Transfer of registration
The REG permits a British yacht registration to be transferred from one port to another without any additional requirements other than those satisfied when the vessel was first British registered. So a Gibraltar-flagged vessel could be transferred onto the Cayman Islands’ register by simply filing application with the respective ship registries. This offers a number of significant advantages.

A transfer of port will avoid any requirement for a tonnage measurement survey by the new flag state administration. It will allow a vessel to be transferred subject to any existing registered mortgage, thereby preserving mortgage priority and avoiding the cost and expense of entering into a new mortgage. It will also avoid any possibility of a security gap between the closure of one register and registration under another.

A change of port may assist an owner of a commercial yacht who wishes to reflag a vessel within the REG to take advantage of the variation in registration and survey fees, or a difference in the manner in which the REG Yacht Code is applied between one flag state and another. It would also allow for a straightforward transfer should the tax status of the vessel change.

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